#106 – OCX Cognition, Rob Markey in HBR, Unified Data Analytics

Welcome to the 106th Customer Strategy newsletter. I can finally talk about why I have not had the time to send any newsletters since the end of November. The reason is simple: I have had the privilege of working together with Richard Owen, former CEO of Satmetrix, co-inventors of NPS. Richard launched OCX Cognition last week. As you might expect, the main work my brother and I have been involved in is writing. I am using the title ‘Editor in Chief – Content’. I have to say that I have not entirely completed my work on the content strategy. Your suggestions will be most welcome. More below. The subjects this week are:

  1. The New NPS Manifesto, as proposed by Richard Owen and the OCX team
  2. The first ‘Insights’ content is live on OCX Cognition
  3. Latest blog posts – CX Strategy
  4. Notable items from other sites – Rob Markey in HBR, Thematic on Unified Data Analytics
  5. Looking forward

The New NPS Manifesto – Modernizing CX and NPS for financial success

Richard Owen has been pretty silent ever since NICE and Satmerix merged. It is not at all like him to be silent. He and a few other people have been working in stealth mode for two years. The veil was lifted on this work last week, revealing quite a humbling story and a new approach to CX work, now called NPS Outcome Engineering.

The humbling story I refer to is quite simple. Richard reflected on the more than one thousand enterprise customer experience implementations he and his team have been involved in over the last 15+ years. I found the conclusion quite startling: If we consider CX success as the delivery of growth or improved financial results then over 95% of these implementations have failed. I suppose it has to be said that in most cases, improved financial results were never an explicit objective. They were more of an implicit belief that never became reality. In any case, that is simply an unacceptable result.

It took time to identify the main problems with the implementations and more time to trace the issues back to three root causes. And of course, even more time was needed to propose practical solutions to issues that nobody seems to have been able to resolve consistently.

I could keep going but I think it will be more effective if you just go to the new OCX Cognition home page to look at the videos explaining this. There is also a presentation you can download. The material is primarily targeted at those who want to achieve financial results from the work, meaning senior executives, CMOs and senior CX leaders. I hope you enjoy it. If you have comments and suggestions that you would like me to relay to Richard and the team, please write to me at maurice.fitzgerald@ocxcognition.com. If you want to make comments that you would prefer me to keep to myself, please send them to mfg@customerstrategy.net.

The Manifesto content is here. I suggest starting with the videos.

The first ‘Insights’ content is live on OCX Cognition

Continuing on the same subject, I have been concentrating on the Insights page on the new website. You will probably recognize our writing style in the majority of what is up there for the launch and new content will arrive regularly. Within the existing structure you will see more innovative material on analytics and on the financial impact of CX. Richard and I are both students of behavioral economics and you will continue to see such content in the ‘Cognition’ section. I consider that content to be essential to effective communication.

The first piece I wrote in the financial section puts forward a proposal for an accounting standard for Customer Lifetime Value. Note that I wrote it back in November, long before Rob Markey’s HBR article and podcast on the same general subject. My new thinking came from reflections about my years working on mergers and acquisitions. At that time I received formal training at Kellogg in the area and learned how to correctly value a company. Once I had that thought, it was just a short step to working out how to value a customer over their entire lifetime. See what you think. I am working on a spreadsheet that will support the methodology. That particular article is here. Note that you have to register to read it and please tick the checkbox asking you whether you want to receive regular updates. The updates will include a newsletter when we get to that point.

My other current favorites are probably those in the Cognition section, particularly the one about poor Heidi’s experience.


Our latest blog posts

I have indeed managed to blog a little bit. The posts on this list are a subset of a long series on how to develop and implement a customer experience strategy. Older posts are still available on the blog page.

image The main customer experience measurement and improvement systems – Part 4 – The Net Promoter System®

Fred Reichheld wrote his landmark article The One Number You Need to Grow and published it in the Harvard Business Review in December 2003. Over time, his work with Satmetrix and his colleagues at Bain developed into the Net Promter System.

image CX Strategy (8) – Measurement and improvement systems – Part 3 – Customer Effort Score

The Customer Effort Score is the metric described in the excellent book The Effortless Experience by Dixon, Toman and Delisi. The primary focus is service-center work and the associated metrics.…

image CX Strategy (7) – Measurement and improvement systems – Part 2 – CSAT / Customer Satisfaction

When you are asked to rate your ‘overall satisfaction’ with something, you have entered the Customer Satisfaction rating system. The most common way of doing this is to ask you…

CX Strategy (6) Measurement and improvement systems – Part 1 – Smiley Buttons

There are quite a number of customer experience measurement and improvement systems in use around the world. They are not all equal. This post is the first in a series…

image CX Strategy (5): Start with a Situation Analysis

Whether in business, the military, government or indeed non-profit organizations, the first step in generating a strategy is a comprehensive analysis of your current situation. This is primarily focused on…


Notable customer experience items from other sites

Rob Markey in HBR – The Loyalty Economy

As you should know, Rob is the co-author of The Ultimate Question 2.0, with Fred Reichheld. He has written an excellent HBR article about how companies should be valuing their customers. He makes a number of different points. One of them is about the way companies publish customer satisfaction scores. It is certainly true that companies have been mentioning their NPS numbers more and more often in their quarterly and annual reports. The issue is that there is no agreed standard for what the numbers mean. In the financial reports I have read myself, they just say “Our Net Promoter Score is 72, the best in our industry” or something very similar. There is no indication at all of where the number comes from. Perhaps it is a call center score and they are comparing it with other companies’ numbers that come from a different type of research.

In this HBR article, Rob suggests how companies should provide basic financial information about customer loyalty and how they should report NPS trends. Separately from the article, Rob has written to the Federal Accounting Standards Board (FASB) with a proposal for how companies should be required to represent NPS scores. So, be prepared for a great read here.

Thematic on Unified Data Analytics

Alyona Medelyan founded Thematic software in New Zealand and moved the company to the Bay Area a couple of years ago. Regular readers will know that I consider them leaders in text analytics. Theirs was the first software I tested that was able to recognize that two customer phrases in survey responses could use completely different words but still mean the same thing. Thematic software can recognize this without tagging or other human intervention and group them into a single theme. That is the most sophisticated level that Natural Language Processing software can currently reach.

Like some other companies, Thematic recognizes that NPS research gives you a really good view of the past and that other data is needed to get a better view of the present and then predict the future. They propose a rich model of customer data from a variety of sources. I still consider this model to be highly sophisticated, though more of a company’s own ERP and other operational data could also be useful. Alyona’s article is here.


Looking forward

Our books continue to sell well despite my lack of newsletters and blogs. November and December were both record months, though January and February have slowed down a little. Still very satisfying.

Most of my writing will now appear on the OCX Cognition website. While all articles there are anonymous, regular readers should be able to recognize articles in the writing style Peter and I manage to achieve together. Again, I encourage you to go there and sign up to receive the OCX Cognition newsletter. More about this quite soon.


Here are links to all of our books on Amazon.com. Kindle versions are available in all stores. Print versions may not be available from some Amazon sites that are dedicated to smaller countries. You can find the books, or at least order them in many bookstores. If you have already read any of our books, please write reviews on Amazon.

Customer Experience Strategy – Design & Implementation

Net Promoter – Implement the System

Customer-centric Cost Reduction

“So Happy Here”: The Absurdist but Essential Guide to Better Business (Color edition)

“So Happy Here”: The Absurdist but Essential Guide to Better Business (Black & White edition)

Please share this newsletter with your friends and colleagues and encourage them to sign up for it here. I have put links to past newsletters on the subscription page. Finally, please feel free to change or cancel your subscription using the link below.

You can also email me, Maurice FitzGerald, at mfg@customerstrategy.net.

To change your subscription, click here.