Customer Satisfaction

Bain NPS emoticons

NPS (6) – Getting useful feedback about one of your products, services, or customer projects

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Unless your company only sells a single product or service, you need a separate process to gather feedback about each product or service you sell. While benchmark and relationship surveys cover a variety of people and job roles at the customer end, product and service feedback should come from the end users. To get reliable and credible information, you should ask for it when you are explicitly planning to use it. For a service contract that you are going to renegotiate (for example), get feedback from the end users before the negotiation starts and use it to present a more convincing case for renewal.

For products, tell the end users that you are starting a new design cycle, solicit their suggestions, and tell them which suggestions were most common and will be included in the next product or version. If you have customers who are references for your product, pay particular attention to what they say. Your most reliable feedback will come from customers who actively use the product or service. For this type of survey, I don’t think it matters whether they have purchased it recently or not. Indeed, an end user may have no idea when the purchase decision was made. If your survey is about something like software that has versions, you will need to ask the users what version they are using if you don’t already know. If so, make sure you tell the users how to determine the version number.

Project surveys

Assuming you want to improve the way you plan and deliver customer projects, a formal feedback process is good practice. I have never seen these done well and they are indeed tricky. I believe you should consider project surveys as the least reliable in your portfolio. The reasons are quite complex, and change somewhat between shorter (up to three months) and longer projects:

  • The people who will answer the survey are most often chosen when the project is complete (for shorter projects) or when a major milestone has been achieved. Since the project team normally chooses the people who should provide feedback, they have an understandable tendency to select only those who will give favorable answers. Ideally, this can be offset by agreeing the names or job titles of those who will respond in the project contract. Unfortunately, I have never seen this done, both because people want to use standard contracts, and because they do not want to “waste time negotiating details.”
  • Another possibility is to be clear, both in theory and in practice, that you are not going to measure the project team on the customer feedback. Emphasize that you will use the feedback to improve the processes and tools for all projects, as well as to plan the development of project team members. It is almost impossible to communicate this credibly. Are you really willing to discard customer feedback when putting project team members through their performance reviews? The only thing left is to have a person outside the project team agree the names of those who will provide feedback. This can be the executive sponsor for the customer, if you have one, or the sales leader assigned to the customer.
  • For longer projects, the members of the project team and the overall project manager may change over time. It is quite common to see a first team for a proof of concept, a second team for a pilot and a third team for a comprehensive rollout. In such situations, you should not have a single feedback process, but have at least one for each phase. Working purely by phase is deficient too, as lack of project management continuity across phases is a common customer complaint.

While remaining aware of the aforementioned defects, my recommendation is to track trends by manager of project managers. It seems reasonable to expect that a single project manager will introduce the same conscious or unconscious bias to all project surveys over time. Tracking at the manager level will smooth it out somewhat.

Projects involving Alliances

Most people think of alliances between companies as being two-way affairs. However, it commonly takes three or more companies to implement a customer project, and any research process must take that into account. If a customer receives a survey from only one of the companies involved in implementing a project, they are likely to be surprised. An example may help here.

When I was managing certain software alliances at Compaq, I got a surprise. I had Lotus as one of the services alliances I led at a worldwide level. Lotus had been acquired by IBM about 18 months previously. IBM encouraged them to continue to act as though they were independent. One consequence of this was their love of Compaq. 55% of all the Lotus Notes installations were being sold on Compaq ProLiant servers, and the proportion was increasing slowly, to the irritation of Lotus’s new masters. I was in their Cambridge Mass. HQ, trying to work out how to use services to grow our joint business. It turned out that neither Lotus nor Compaq wanted to be ‘Prime contractor’ for any Notes implementations. A simple two-way alliance was pointless.

Further discussion revealed that the largest Notes implementer on the planet was PricewaterhouseCoopers (PwC), and that this was particularly the case in EMEA. I met repeatedly with the head of the PwC Notes practice in Zurich, and we were successful in some three-way projects with Lotus. (Then HP tried and failed to acquire PwC, ruining the PwC/Compaq work, though this is not directly relevant here.) Two- and three-way alliances are quite common for customer projects. You need to agree a single approach to surveying the whole project and driving improvements together.

Training surveys

Since I have taken many training courses over the years, I have been surveyed many times. Surveys tend to be quite long and to involve rating the teachers. Oddly, I don’t recall ever being asked what any individual teacher could improve. I feel NPS can be used in a hierarchical way, starting with an overall course score, and the usual Why and Improve questions. This can be followed by the same three questions for each teacher. I do not believe you should ask about the course material, facilities, catering, accommodation and so on. If they matter, they will come up in the written comments. Unfortunately, trainers tend to want to train you on how to answer the surveys. They will typically show a slide that gives a sample score (always a 10), and sample comments, which are always positive. This is a misguided approach and means the trainers do not get many of the improvement suggestions they need.

 

Note that the Bain NPS emoticons at the top of this article are registered service marks and are used with permission.



Looking forward

The next article in this series will cover will be about how to handle transactional / episode research.

 

As is often the case, the above is a slightly-edited version of a chapter in one of our books; in this case Net Promoter – Implement the System All of our books are available in paperback and Kindle formats from Amazon stores worldwide, and from your better book retailers.

#98 – Choosing CX project names. Does your clock show the same time as your customer’s?

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Project names matter quite a lot. Does your clock show the same time as your customer’s clock? The five topics this week are:

  1. Pick powerful names for your improvement projects
  2. Turnaround time disconnects – When does the clock start to tick?
  3. Latest blog posts – New series on NPS continues
  4. Notable items from other sites – Text analytics in insurance, NPS benchmarks
  5. Looking forward

Pick powerful names for your improvement projects

I have written about how to ensure ongoing sponsorship for your work. Recent experience makes me want to reinforce one point in particular: the importance of the name of the project or projects. In a totally rational world project names should not matter, but we humans are not 100% rational.

Think of the following situation. You have done your customer research for your eCommerce company. One of the points that has come up frequently is that you say you will reimburse customers five days after they return goods they don’t want, but quite a few customers say it takes longer than that. You have spoken to the accounting people and they say the customers are wrong. You believe there is a disconnect somewhere, as quite a few departments are involved in some way. So you want to launch a project to investigate it and ensure customers stop complaining about the problem (if indeed there is one).

So you put together a project proposal. You decide you need someone from logistics, from the website team, from accounting and from quality control. Since the accounting people have already told you there is no problem to solve, well… you could have a problem. The project name can help a lot. Think about it. You could call the project ‘Investigation and resolution of perception disconnect about reimbursement timing.’ Boring! How about calling it ‘Keeping our promises – reimbursement of customer returns’. Would anyone dare say, “I don’t agree with the ‘Keeping our promises’ project. Let’s not do it.” Anyone who says that sounds like an idiot. Once you have a name like this the project is hard to refuse and will not get cut if some need to save corporate costs arises.

Turnaround time disconnects – When does the clock start to tick?

What I wrote above is about the importance of project names. The example I used is one I have experienced personally at two companies. I first came across it when I worked for the Wrangler jeans parent company (Blue Bell Apparel, at the time). Customers occasionally told us we did not respect the delivery lead times we gave them, and we had the precise issue about reimbursements mentioned above. If, for example, we made a mistake with a delivery, the store would send the goods back and we would send them the correct products. If they had already paid, we had to reimburse them.

The first time I saw this a customer said they had returned goods that they had paid for and that we had taken several days longer than promised to reimburse them. Our accounting people said everything was done correctly. I told the customer that. The customer gave me the exact dates and times involved, which I have to say was quite kind of them. It was my first experience of a timer disconnect.

These disconnects arise when your customers’ timers start and stop at different times from yours. In the specific case of a customer returning product, their view of when the five days started was when the truck picked up the cartons of clothing. Their view of when the timer stopped was when the money was back in their bank account. It turned out that our view was different.

Our timer started when we had received the merchandise, opened the cartons and a quality control person had checked that the goods were undamaged. The accounting people then started their clock. They believed that we had committed a five-day TAT for the reimbursement and that they therefore had five days to process it. Our accounting people’s five days did not include weekends. The accounting timer stopped when they gave the transfer order to the bank. The bank took an average of three days to process the payment, not including weekends.

As far as the customer was concerned, we promised reimbursement in five days, but took an average of 12 days to actually do so. There was lots of what I call ‘white space’ in our processes where the timer was simply not running.

I hope you get the point. Your operational metrics for things that involve customers have to be measured from their perspective, not yours. In our specific case, we were not able to get the process down from 12 to five calendar days, so we had to change our promise to at least 12 days. We chose two weeks as our promise. Clarity is far more important than giving customers everything they might like to have, such as a real five-day TAT in this case. I hope you agree.

 

Our latest blog posts

I have been getting fantastic feedback on my Elon Musk / Tesla article both via LinkedIn and directly. Thank you! Two posts on this list are part of my extensive and deep series about the Net Promoter System. Older posts are still available on the blog page.

image NPS (5) – Relationship research with large B2B customers

A good relationship feedback process could be described as a non-anonymous mono-vendor benchmark survey. You usually only get detailed information about your own company. If you just have a small number of customers, you should go and talk to them all face-to-face. With larger numbers, you need to segment…
image NPS (4) – Competitive benchmarks and supplier surveys

Quite a few companies sell NPS benchmark data. Some will do custom surveys to your design. Done properly, benchmark survey trends are the best predictor of revenue and market share…
image Tesla, Elon Musk, and the new financial apartheid

A story about the extreme differences between those at the top and those whose lives must be sacrificed so that their leaders can receive excessive compensation packages. The blog starts like this:

José Luis Martínez* started work at as usual at Tesla’s Fremont plant on a January morning earlier this year. He was in his third year as a ‘maintenance technician’, ensuring…

Notable customer experience items from other sites

Edward Hu / Thematic – Four Ways Insurers Can Leverage AI Powered Text Analytics 

Edward has written an insightful article for the Thematic blog. The first of the four points includes a way that AI-powered analytics can identify themes that are mainly mentioned by clients when making fraudulent claims, for example. He also covers how the technology can help detect call center themes that should be added to self-help sites and two more points. It is about a three-minute read.

Read Edward’s blog here.

Retently – What is a good Net Promoter Score?

At the other end of the length scale, Grigore Raileanu has written an excellent piece for Retently. It provides some surprising numbers and it is well-referenced. Personally, I found the Tesla NPS of 97 extremely surprising, though I could find no defect in the way it was obtained. (Research on a large panel of electric vehicle owners.) I did some digging and could not find details of exactly how Retently obtained its own NPS benchmark numbers, though these are broadly in line with what you will see elsewhere.

Grigore makes great points about the differences by industry and by culture or geography. The only minor thing he wrote that I disagree with is that any benchmark number better than your last one is a good number. I suppose my disagreement is a bit technical: If your entire industry has gained five points and you gain two points, your number is bad, and you will lose market share.

Worth the ten-minute read here.

 

Looking forward

I will continue to try to publish two blogs per week over the coming month or two.

Here are links to all of our books on Amazon.com. Kindle versions are available in all stores. Print versions are available from the major stores only. And as of two weeks ago, 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.
Track relationships with an organization chart

NPS (5) – Relationship research with large B2B customers

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A good relationship feedback process could be described as a non-anonymous mono-vendor benchmark survey. You usually only get detailed information about your own company. If you just have a small number of customers, say less than a hundred, you should simply interview them all face-to-face. If you have a large number of customers, you should segment the customers in some way, using increasing depth for your most important customers. Deeper surveys do not mean asking more questions. The Net Promoter System format remains intact. When you interview your most important customers, you go into far greater depth on the ‘Why?’ and ‘What should we improve?’ questions. Clarifying the input right away will make it far easier to prepare a worthwhile improvement plan for the customer to approve.

It is certainly possible to add questions about competitors to your relationship survey, though it would dilute the focus on your own company’s improvement opportunities. In cases where your product and your competitor’s are mutually exclusive, meaning nobody would buy from both companies, adding questions about competition would give you an early indication about whether customers are thinking of changing. For example, “Why do you buy from us instead of [insert key competitor name]?

Resellers and other partners

Companies that help you to sell or implement your products and services are a special case. Since their job is to recommend your products and services, asking them the recommendation question is not appropriate. I recommend asking “Please rate your overall satisfaction as an Acme partner”, followed by the usual “Why?” and “What should we improve?” Since your partners have the choice of working with other suppliers, they are a good source of competitive information. I therefore suggest adding the following questions, using a reseller example, and supposing that the main competitors are called Alpha and Beta:

  • Do you sell products from Alpha or Beta?
  • What can we at Acme do to make it easier for you to recommend us over Alpha and Beta?

Future-facing relationship segmentation

I believe it is more useful to segment your research and improvement process by your future revenue expectations for a customer, rather than by what you achieve now. This means that customers who spend a lot on your type of product or service deserve a lot of attention, no matter who they spend it with. I suggest a two-year time horizon. The segmentation is used to determine the type of feedback process you will use. The top tier should be interviewed face-to-face, the second tier by phone or Skype and the lowest tier by email / web. The depth of your loop-closing and improvement commitments will also vary by tier.

Publish strategic relationship NPS numbers and trends by individual, not by company

Account-level NPS metrics can be counter-productive. If you mainly publish relationship NPS scores for each individual customer and perhaps a table that compares the scores, your metric will never be reliable. Account teams who do not look good on the list will do everything possible to manipulate the process so they do better the next time. To ensure reliability, publish the scores and trends by individual person in the customer relationship map. Your overall relationship with a customer is largely the sum of a number of individual relationships. These are what need to be monitored and improved, or referenced. Improvements should be agreed with each person. Even at the level of the individual, the trend is more important than the absolute number. The chart at the top of this article is a suggestion about how to show the relevant information quite simply.



Looking forward

The next article in this series will cover will be about how to get actionable feedback for individual products, services, and projects.

 

As is often the case, the above is a slightly-edited version of a chapter in one of our books; in this case Net Promoter – Implement the System All of our books are available in paperback and Kindle formats from Amazon stores worldwide, and from your better book retailers.

Competitive NPS benchmarks

NPS (4) – Competitive benchmarks and supplier surveys

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Quite a few companies sell NPS benchmark data. Some will do custom surveys to your design. Done properly, benchmark survey trends are the best predictor of revenue and market share trends for your company. Since benchmark surveys provide comparative data, they are actually the only credible predictors. All other survey types cover only your company. Feedback about your product may be improving, but if that for your main competitor’s product improves more, you will lose share. Unfortunately, most vendors only provide annual benchmark information as a standard offering, though Bain’s new Prism offering is an exception. If you are in an industry that does not change quickly, annual updates may be reasonable. For most businesses, and to keep customer experience as visible as financial results, you need benchmark data quarterly, at the very least.

The ‘Why’ matters more than the trends

The score trends for your company and competitors are useless without knowing why. If you buy benchmark reports that do not include reasons why, they are not worthwhile and you should change vendors. The reasons behind positive and negative relative trends need to be explained at the same time as the numbers. The best benchmark vendors also provide improvement suggestions that are customized for your company and your competitors.

Use rolling quarterly reports for benchmark surveys

It can be expensive to get statistically significant NPS volumes for all of your competitors every quarter. Using a rolling four-quarter average is fine. This means your Q1 report will also include the data from the prior Q2, Q3 and Q4. Drop the oldest quarter as soon as you have a new quarter of data. Your reports should show multiple rolling quarters so trends are easy to understand. The graph at the top of this article shows a good way of communicating quarterly rolling trends.

The good and bad of double-blind benchmark surveys

The best benchmark surveys are double-blind. This means the people answering the survey do not know who is funding it. Unfortunately, it also means that you have no way of knowing the names of those who have answered. The positive aspect of this is that neither you nor your competitors can try to influence them. On the negative side, you can’t follow up with anyone you would like to use as a reference or who has serious concerns.

When you receive benchmark data, it is ‘unweighted’. For some businesses, equality of respondents is a good thing. For most businesses equality of all respondents in a bad thing. While you should get data about the sizes of the companies and the job titles of people represented in a business-to-business (B2B) survey panel, I have never seen it used in practice. Customers with large budgets and small budgets are mixed together. Responses from people who are decision-influencers have the same weight as those from decision-makers and indeed from end users. Once you slice and dice the data, you quickly get into issues with the ‘law of small numbers’. By this I mean that you will see outliers that are just due to statistical variability in small samples. The subject is tricky, and I will cover it in another article.

I am not aware of any satisfaction benchmark that compares benchmark survey providers. The quality of the benchmark results depends on the relevance of the people who answer the questions. This is probably where you should spend most of your investigation time when selecting a new vendor. Ask to see the profiles of the panel members that will be used for your work. Ask for samples of the text input the vendor has received. They may only be willing to provide it for a different panel, used for a different industry from your own. The vendor should have no difficulty removing company names to make data anonymous.

Panel members usually receive points or other cash-equivalents that they can redeem for merchandise. I don’t believe anyone could make a living from being on many panels and taking surveys full-time, though you may have seen get-rich-quick schemes advertised on the internet that suggest it could be done.

Supplier surveys

In business-to-business situations, some customers regularly survey internal users of products and services and provide the resulting feedback to their suppliers. This is a form of benchmark survey in that each supplier is given a report that compares them to other suppliers. In some cases, you will see the names of the comparison companies and other cases they are just shown as ‘Company A’, ‘Company B’ and so on. Supplier surveys are my favorite type of B2B research, for a simple reason. Your customer is highly motivated to see you improve.

The first such process I was involved in was Vodafone’s Supplier Performance Management initiative. The person who set it up for Vodafone was subsequently headhunted by BP in Houston to do the same. The survey was run by the procurement department. They were measured on supplier performance improvement from year to year. They wanted us to present our improvement initiatives to them, and were very helpful in providing contacts at their end, and helping us with the work. Companies that operate their own supplier surveys usually decline to participate in other relationship surveys you may be running.

Correlation and regression analysis can be useful in benchmark studies

If you have limited written commentary and multiple questions have been asked in the benchmark survey, simple correlation analysis can be helpful. Here is a good example from the ICT industry. The Research Board is a Gartner-owned entity. Its members are about 260 CIOs and former CIOs from the Fortune Global 500. One of their annual projects is a supplier survey. Members rate each of their major IT and communications providers on many factors. An anonymized version of one of the results tables is shown in the table below. I used Excel to do simple correlation analysis between the overall scores and individual factors. I then used Excel’s conditional formatting to make it more readable. The correlation scores on the right suggest the weight of each question in the overall performance score.

Correlation, of course, is not the same as causality, and the written comments help. The main body of the table contains the scores, where 5.0 is the maximum possible. Account management comes out as the most important factor. Surprisingly and counter-intuitively, ‘understanding of my business’ is the least important item. Note in passing that vendor 14 has finished last in the survey for many years and is one of the most profitable companies on the planet. You don’t have to be loved to make lots of money. Having an effective monopoly in your area is another way of doing it. The Research Board survey does not include the recommendation question and each company covered only receives customer comments and improvement suggestions for their own company. Since there is no charge to the vendors for the report, it is fabulous value.

Research board benchmark results

Syndicated benchmark surveys may be the future

When I have shared benchmark survey results with my equivalents at other high-tech companies, I have been pleased to see that the NPS numbers and trends look similar in their surveys. This simply suggests that there are good NPS benchmark vendors covering high-tech. All customer experience leaders I have met have been highly irritated by competitors that publish non-benchmark scores, representing them as fair comparisons. This makes me feel that a good solution for many industries would be for the leading vendors to get together and agree to use a single benchmark provider as their reference. I believe it would be easy to get competitors to agree on the core NPS questions. Each would be free to pay the survey provider for additional questions if they so wished. Additional companies would be free to pay a fee to join the consortium. I suppose a challenge is that non-customer-experience executives from companies that do poorly would want to cut off the vendor, rather than address their issues. A first such offering exists. Bain and Qualtrics announced a joint syndicated benchmarking offering in March 2019. They call it Prism, and initial demand has been strong. Their announcement press release describes the service as ‘continuously updated’’.



Looking forward

The next article in this series will cover will be about how to understand your relationship and improvement opportunities with large B2B customers.

 

As is often the case, the above is a slightly-edited version of a chapter in one of our books; in this case Net Promoter – Implement the System All of our books are available in paperback and Kindle formats from Amazon stores worldwide, and from your better book retailers.

#97 – New Net Promoter System podcast, two CX books I read recently, bad experience with ‘Fruit’ company, Reicheld and Owen on WSJ article

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Bain Net Promoter System podcast with… me. Two good CX books I have just read. company sometimes goes rotten, and Fred Reichheld reflects on the WSJ article on NPS. The five topics this week are:

  1. My 10th Bain Net Promoter System podcast
  2. ‘The Human Brand’ and ‘Yellow Goldfish’ – Two CX books I enjoyed
  3. Latest blog posts – New series on NPS continues
  4. Notable items from other sites – ‘Fruit’ support, Reichheld and Owen on the WSJ article
  5. Looking forward

My 10th Bain Net Promoter System podcast

Readers who received my newsletter last week know that I was interviewed for a Wall Street Journal article on NPS. Rob Markey and I recorded a Net Promoter System podcast to discuss and reply to the article. I have to say that Rob was somewhat more emotional than he usually is during his podcasts. It was my tenth recording with him, and I think I had the most fun with this one.

We had an extensive discussion about the main new point that one of the journalists raised, which was the increasing use of unexplained NPS numbers in annual reports and earnings calls by S&P 500 companies. We feel it is a good thing that CEOs are able to talk about customer experience trends at the same time as they talk about financial performance. It is just an unfortunate fact of life that there is no recognized or required standard for such disclosures. Ideally, their customer experience numbers should come from recognized double-blind benchmark research providers. An alternative would be syndicated research using a standard methodology, such as the Prism methodology recently launched by Bain and Qualtrics.

Overall, we felt the WSJ article was a positive one, despite a negative headline. We used the podcast to reinforce various points about how you can ensure your metrics are considered to be trusted and reliable within your company.

If you have not subscribed to the podcast you can find it here.

Two customer experience books I have read recently

Yes, I try to constantly read books about business strategy, behavioral economics, and customer experience. I feel I still have a lot to learn, despite my age and experience. Here are a few words about two books I have read and enjoyed recently.

The Human Brand was written some time ago by Chris Malone and Susan T. Fiske. In an illustration of how much I still have to learn, the authors introduced me to a customer experience model that I had never heard of and that appears to be well-known. It is the ‘warmth and competency’ model. The central message of the book is that our attitudes towards people, products, and companies are determined by these two factors. I read warmth as being about our perceptions of empathy and positive intentions towards us. Competency is about the ability to execute as expected or promised.

The book is full of stories about companies and individuals that have done better or worse jobs of exhibiting these two attributes. The stories come from the mega-companies we know and scale right down to one about a dentist who insists on doing teeth-cleaning work himself because it is easier to have a conversation with a patient while that is going on than when he is extracting a tooth. I learned a lot and hope you will too. There is a website for the book here.

Yellow Goldfish was written by Stan Phelps and Rosaria Cirillo Louwman. I love the central theme: happiness! The overall message is that companies can ensure success by making customers happier than they were before their latest interaction or experience with a product or service. Stan and Rosaria represent happiness at the top of a Maslow-like motivation hierarchy, and suggest we measure the Happiness Contribution Factor, as represented in this illustration:

This is the ninth book in Stan’s Goldfish series, the only one that is in collaboration with Rosaria. Each book title mentions a different color. For Stan, a goldfish is a great symbol of something that is small and can make a big difference, despite its size. A goldfish metaphor also helps to communicate things like competition (the number of other goldfish in the pond) and the market (the quality of water in the pond). Yellow was chosen for communication about customer experience because it is a warm primary color and because (surprisingly) of the yellow color of the original ‘smiley face’ by American artist Harvey Ross Ball.

True to its metaphors, the book is filled with wonderful examples of small things people have done and behaviors they have adopted that have made major differences for customers, employees, and indeed for entire companies. A fun read! Rosaria has created a site for the book here.

 

Our latest blog posts

Two posts on this list are part of my extensive and deep series about the Net Promoter System. Articles I read about Elon Musk’s compensation package made me interrupt the series with a post on a different subject entirely. Older posts are still available on the blog page.

image Tesla, Elon Musk, and the new financial apartheid

A story about the extreme differences between those at the top and those whose lives must be sacrificed so that their leaders can receive excessive compensation packages. The blog starts like this:

José Luis Martínez* started work at as usual at Tesla’s Fremont plant on a January morning earlier this year. He was in his third year as a ‘maintenance technician’, ensuring…
image NPS (3) – Net Promoter System Framework, ensuring metric is trusted

The NPS metric is just one part of a much larger system. The Bain & Company Net Promoter System Framework has five elements, as shown in the diagram.
image NPS (2) – Basics and history of the Net Promoter Score and System

This series supposes the reader is already familiar with the basics of the Net Promoter System, and ideally has read The Ultimate Question 2.0 by Fred Reichheld and Rob Markey.…

Notable customer experience items from other sites

‘Fruit’ support screws up

My former colleague Dr. James Borderick recently had a rather negative support interaction with a company whose name he has disguised here, just calling it ‘fruit’. I know him as a passionate promoter of said company’s products and can understand his discretion. As he puts it, “My first support engagement in a while with a certain fruit company has led me to believe that a once NPS leader is not what it once was. Multiple failures along the support journey coupled with a very bad customer success manager interaction at the close have pushed me to write this article.”

Read his disappointing story here.

Richard Own and Fred Reichheld comment on the WSJ NPS article

Here are what will probably be my last mentions of the Wall Street Journal story on NPS. The original inventor, Fred Reichheld, responded on LinkedIn and included this noteworthy phrase, ‘Instead of NPS, perhaps I should have called the system “NLE,” for Net Lives Enriched. After all, that is what NPS really measures.’ Read his full response here.

Richard Owen was CEO of Satmetrix at the time NPS was invented and led the research that proved that Promoters generally do indeed talk to others about your product or service, and the related behaviors of Passives and Detractors. Richard’s thoughtful response includes useful content on the validity of NPS as a metric, among a variety of other topics. Worth a read here.

 

Looking forward

Not much on my calendar at the moment, so I will try to publish two blogs per week over the coming month or so.

Here are links to all of our books on Amazon.com. Kindle versions are available in all stores. Print versions are available from the major stores only. And as of two weeks ago, 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.
Bain Net Promoter System Framework

NPS (3) – Net Promoter System Framework, ensuring metric is trusted

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The NPS metric is just one part of a much larger system. The Bain & Company Net Promoter System Framework has five elements, as shown in the diagram at the top of this article. It comes from the Bain www.netpromotersystem.com website. The website describes the elements in some detail. This series of articles discusses how to implement each element. The material on some parts of the framework is more detailed than others, notably everything that is involved in ensuring NPS is a reliable and trusted metric in your organization.

Leadership matters

Leadership is important. It is unlikely that the system can be implemented by consensus. Attempts to get everyone possible to agree to what needs to be done will lead to excessive complexity, and lack of clarity about the priorities. Personal leadership is required, and it can only be completely successful in the context of sustained commitment from senior leaders. The articles on each part of the framework will include examples of good practice. Real-world counter-examples are provided between framework discussions. There is somewhat of a theme in the counter-examples: excessive focus on metrics, rather than improvement. We will start by discussing how to ensure NPS is a ‘reliable, trusted currency/metric’, work down the framework, and finish by covering leadership commitment.

Reliable trusted metric – Introduction

The Net Promoter System relies on a metric that is easy to understand, and perhaps paradoxically, easy to misunderstand or even deliberately misuse. There are several different ways of generating a Net Promoter Score. Each has its own specific use. Each is reliable in a different way. It is quite common to see companies advance marketing statements like “Our NPS is 92, with a 30-point lead over our nearest competitor.” No explanation is typically provided about where the number comes from. I have investigated a number of such claims in detail. Typically, the two numbers being compared are from different types of surveys, and are not actually comparable.

This part of the blog series is about how to ensure both a reliable score and a trusted feedback-gathering process. The trust has internal and external aspects. Internally, your colleagues must believe that the feedback is indeed representative of the customer and competitor base it claims to represent. Externally, your feedback and improvement process must provide more value to customers than it extracts. If not, fewer customers will respond to your next feedback request, decreasing reliability.

Making it matter as much as financial metrics

You want NPS to be included in leadership team discussions and to have similar status to any other robust metric, such as your P&L. You need to be able to report your key research results with the same frequency and reliability. If your main financial discussions are quarterly, your main NPS reports should be quarterly too. Just as your P&L is compared to that of your competition, your NPS report should include competitive information as well. Competitive benchmark surveys will be the subject of my next article. And it is perhaps worth noting that as of May 2019, about 150 of the S&P 500 report NPS scores and trends in their quarterly financial reports.

NPS feedback needs to represent your customer population

Assuming you are not wasting your customers’ time and are going to act, you need to ensure your feedback is representative. The purpose of the whole system is to improve loyalty and encourage customers to promote you to others. You need to be clear which customers this means and to target them correctly in any feedback system. To pick an example, if you want to get feedback about your product, but only use data about people who contact you with problems, your feedback system is incomplete at best.

Let me pick an extreme example in another domain to illustrate this. For many years, homosexuality was on the formal US list of psychiatric illnesses. Research by psychiatrists showed that gay people had a truly amazing set of symptoms. The root cause of this classification problem was that the only homosexuals psychiatrists studied were people who had been referred to them because they had psychiatric illnesses. It took many years before this was understood and corrected.

Types of NPS research

The conventional types of feedback scores and input you need to understand and be able to use are benchmark and supplier surveys, relationship feedback, product / service / project feedback, transactional feedback and the feedback from your own employees, known as eNPS or Net Promoter for People. Each can help you to understand and predict different things. They should never be mixed together or compared to each other. Each needs to be reliable and trusted in its own way.

Introducing a new type of research: ‘ceNPS’

I will cover eNPS in a future article about ensuring you have an Employee / Team environment focused on loyalty. At that point, I will introduce a new type of research, which is called customer-employee NPS. The principle is that you ask your own employees how likely customers are to recommend your company, why, and what should be improved. This can be valuable in addition to customer research because employees are better positioned than customers to understand which improvements are easy to implement.



Looking forward

The next article in this series will cover in important aspect of ensuring you have a trusted and reliable metric: competitive benchmark research.

 

As is often the case, the above is a slightly-edited version of a chapter in one of our books; in this case Net Promoter – Implement the System All of our books are available in paperback and Kindle formats from Amazon stores worldwide, and from your better book retailers.

#96 – WSJ article on NPS, Temkin research now free, Journey Mapping, Improved version of original NPS research

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The Wall Street Journal writes about NPS. Free Temkin Group research. Welcome to the 96th edition of my customer strategy newsletter. The five topics this week are:

  1. WSJ article about NPS
  2. Almost all Temkin Group research is now free of charge!
  3. Latest blog posts – New series on NPS
  4. Notable items from other sites – Journey mapping
  5. Looking forward

Wall Street Journal article about the Net Promoter Score

Khadeeja Safdar and Inti Pacheco wrote an article about NPS that appeared last week. It has the rather odd title of The Dubious Management Fad Sweeping Corporate America. (Note that you will not be able to see the full article unless you are a subscriber. Since I had this problem, I chose to subscribe for three months for the equivalent of $1, which I can apparently cancel at any time.)

I was among the people interviewed by one of the two journalists behind the article. I spent about 45 minutes with Khadeeja Safdar on the phone. I also sent her some material about the subjects she raised during the call.

Despite the odd headline (which neither of the two journalists supplied, so I suppose it was written by an editor who did not actually read the article), I found the article quite positive about NPS. There are some relatively trivial inaccuracies.

In her call with me Khadeeja introduced me to the main new subject she brought to the discussion which is the increasing use of unattributed NPS numbers by CEOs in earning calls and annual reports. Mind you, unattributed does not mean they are not correct, just that the methodology has not been described when the numbers are provided. You would hope that they all come from double-blind benchmarking studies, but that is almost certainly not the case.

Personally, I think it is great that more and more top CEOs at least mention customer experience in their calls and messages.

I believe that at least one other point is worth noting. While various people have published papers suggesting that their favorite metric (always one that is a compound metric, therefore more complicated than NPS) has equal ability to predict market share trends, nobody has presented a metric with significantly better predictive ability. Khadeeja mentioned peer-reviewed papers critical of NPS. I have studied every such paper I can find in detail and have found none with any merit. One, for example, included a study of NPS versus revenue in Norwegian retail gas stations from 2000 to 2003, a period when the price of a barrel of oil went down by 30%. And some may know that gas stations in Norway are a state-owned monopoly, so it is not possible to study NPS versus market share.

I hope at least some of you will be able to read the full article. The data on the mentions of NPS in annual reports and earnings calls is quite surprising, at least to me. I learned quite a lot from the article.

Almost all Temkin Group research is now free of charge!

Great news! I have often said that the lack of public domain double-blind NPS benchmarks is a problem. That problem has now been solved. Bruce Temkin just announced that his historic research findings are now available free of charge. I immediately registered and was able to download the full 2018 NPS benchmarks report. It used to cost a minimum of $495.

Temkin Group was acquired by Qualtrics in October 2018. Qualtrics was in turn acquired by SAP in January 2019. Bruce stayed along for the ride and his team is now called the Qualtrics XM Institute.

So, please go over to their website and have a look. You will find the research reports in the lower half of the home page. You can filter on ‘Metrics’ to find NPS benchmarks and loads of other interesting stuff. You must register to be able to download the reports. Enjoy them here.

Our latest blog posts

The posts at the top of this list are the first in a lengthy and deep series about the Net Promoter System. Older posts are still available on the blog page.

image NPS (2) – Basics and history of the Net Promoter Score and System

This series supposes the reader is already familiar with the basics of the Net Promoter System, and ideally has read The Ultimate Question 2.0 by Fred Reichheld and Rob Markey.…
image NPS (1) – Do you really need a customer experience measurement and improvement system?

This is the first in a series of blog posts about implementing the Net Promoter System. The Net Promoter System®[1] is the most widely adopted system for managing customer feedback…
image Useful if you have no NPS® benchmarks for your company – ACSI to NPS converter

As many of you know, public competitive NPS benchmarks are exceedingly rare. The only large-scale public customer satisfaction data I know of is the American Customer Satisfaction Index. So… here is how to convert ACSI scores to approximately accurate NPS numbers.

Notable customer experience items from other sites

Instrktiv / Ferry Vermeulen – Customer Journey Mapping

A nice article giving a list of ten things to bear in mind if you are going work on a customer journey map. I have to say he had me when he mentioned Daniel Kahneman’s ‘Peak End rule’. Regular readers will know that I don’t believe journey mapping should be applied indiscriminately. It is at its best when your customers have told you that you have one or more processes that need to be improved. Spend your time and effort there, rather than trying to map everything that exists in your company.

I hope you will find the article useful. You can find it here.

Jeff Sauro: Assessing the predictive ability of the Net Promoter Score in 14 industries

There is a slight risk of excessive NPS focus this week. Jeff has written a fabulous article that takes the basic research Fred Reichheld and friends did when coming up with the NPS concept and takes it further. No historic data was available when Fred did his landmark work. Jeff added further years of data. Among other things, he tries to answer the ‘chicken and egg’ question. And the result is that NPS is indeed a predictor.

If you are a customer experience professional, I believe this a page you need to read, bookmark, and share with your colleagues and friends. Get it here.

Looking forward

I have recorded a new Net Promoter System podcast with Rob Markey. I will give you more details when I know the release date.

Here are links to all of our books on Amazon.com. Kindle versions are available in all stores. Print versions are available from the major stores only. And as of two weeks ago, 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.
NPS rating question and scale

NPS (2) – Basics and history of the Net Promoter Score and System

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This series supposes the reader is already familiar with the basics of the Net Promoter System, and ideally has read The Ultimate Question 2.0 by Fred Reichheld and Rob Markey. There is quite a lot of mis-information about what they wrote. Some comes from people who have not read the book. Some comes from people who have read it, but had difficulty understanding some points. I have had the opportunity to clarify a few tricky points directly with the source. Let’s start with the metric, rather than the overall system. The image above shows the rating question and how the scoring works. That’s the easy part.

Open questions

After the rating question, the current standard is to use two open questions:

  1. Why?
  2. What could we do better?

Additional questions may be used for touchpoint surveys, also called ‘episode’,  ‘experience’ or ‘interaction surveys’. Bain recommends simply adding a second rating question, asking “To what extent has your latest interaction changed your willingness to recommend?”

Which direction for the scale?

Fred and Rob have used the scale in both directions, from zero to 10 and the opposite. There are views, supported by psychology experiments, that the order biases the results in one direction or the other. It does not matter which you use, as long as you are consistent. Personally, I have always used it as shown here, though I agreed to requests to reverse the scale from my HP colleagues in countries that write from right to left to reverse the scale.

What about using a different scale?

Some companies use a 1 to 5 scale, with 5 as the best score and the only Promoter score. 4 is for Passives and 1 to 3 for Detractors. This has two disadvantages. First, all too many people believe they should strive to be number 1, and therefore think that 1 is the top score, no matter how it is labeled. This is quite easy to spot if you also have an open text question and the answer seems opposite to the rating, though the respondent could be trying to be sarcastic. Second, there are cultures that just don’t want to give you the top score. On a scale from 0 to 10, the happiest people in these cultures may give you a 9, but on a 1 to 5 scale they give you a 4.

Again, all this does not matter much if you are consistent, only comparing yourself with others using the same scale. When HP moved from the short to the long scale for competitive benchmark surveys, Satmetrix advised that it would have a small positive effect on NPS scores for HP and for all competitors. That is indeed what happened.

Your ultimate question may not be the recommendation question

This may seem subtle: when Fred wrote the original Harvard Business Review paper[1], he found that the recommendation question trend was the best revenue predictor for most but not all industries. This matters. Your personal ‘Ultimate question’ should be whatever single question best predicts your revenue and market share trends relative to your competition. You should start by using the recommendation question in the absence of any contrary data. Even in industries where it was not the best question, it was close to the top.

I realize this statement is somewhat controversial. Fred and Rob have stated it publicly in Episode 82 of the Net Promoter System Podcast series[2]. Some of their early work, notably with Enterprise Rent-A-Car, did not use the recommendation question. There are limits to what you should use, to avoid confusion. First, you will cause confusion if you let each business and function in your company select their own question and all refer to it as NPS. You can only have a single question formulation in your company if you want to be able to communicate effectively. Second, don’t allow composite metrics made up from multiple questions to be represented as NPS. That is opposite to the whole principle of a single simple question.

Categories and behaviors

From the start, the Bain teams were able to observe and quantify behavior by response category. I suppose the most important observation is that a 5 is absolutely not a middle-of-the-road average score. People who give you a 5 (on the 0 to 10 scale) do not like you and may well speak negatively about you to others. The same applies to those who give you a 3 on a 1-to-5 scale. This is an important observation when thinking about how people use Customer Satisfaction (CSAT) scores on a five-point scale. CSAT practitioners consider people who give a 3 to be satisfied, and they are not. Their actions say otherwise.

Early research with Satmetrix

Bain asked Satmetrix to provide additional proof that NPS trends relative to competitors correspond to relative revenue growth, expressed as a percentage. This applied once again to most but not all industries studied. The main exceptions were industries that tend to have local monopolies, such as cable television companies. Fred found the relationship between NPS trends and relative growth to be particularly striking in the airline industry. In the HBR article referred to above, he says “… no airline has found a way to increase growth without improving its ratio of promoters to detractors.”

Don’t forget common sense

Accept for a moment that the recommendation question is the best one-question growth and share predictor for your company. Imagine you have seen multiple quarters of positive NPS trends relative to your competition. Growth ahead! What could possibly go wrong? Many things. Let’s suppose you run a software business that is entirely dependent on sales people that go to visit customers and that you have no intention of changing that. Each sales person has an average quota for the industry of about $2 million per year. You decide that you can’t afford to hire any additional sales people. Happier customers may make it easier for the existing sales people to make their quotas and will renew more of their existing annual contracts, but you will be throwing away the full growth opportunity if you don’t hire more sales people.

To use a non-NPS example, warmer weather predicts improved ice cream sales. If you don’t have additional ice cream in stock, you won’t sell any more. A Net Promoter System that functions well and produces better scores is simply a business enabler. You still have to convert the opportunity it creates.

Analyzing text responses

Humans are unfortunately subject to all sorts of cognitive biases. These are problematic when it comes to the search for insights in customer responses to the open Why and Improve questions. Consciously or unconsciously, we all tend to see things we already believe or agree with more quickly than we recognize things we don’t particularly want to see. Unless you have only a small number of verbatim responses, software will be an invaluable aid to your search for new insights. There were no good solutions available when Fred and Rob wrote their book. That has changed, and I will cover how to evaluate survey analysis software. As it exists today, software can do an excellent job of initial screening and categorization, and humans should still control the final decisions.

The books

Fred Reichheld published The Ultimate Question in March 2006. Rob Markey co-wrote the ‘revised and expanded’ v2.0 of the book and published it in September 2011. As of May 2019, they do not yet plan to write v3.0. Nevertheless, their methodology has been improving since 2011. The updates are reasonably clear in certain Bain Net Promoter System Podcasts, specifically the ones where Rob Markey speaks on his own, or together with Fred. Rob and I also recorded the first of many podcasts together in July 2017 and clarified many of the improvements to the system.

To me, the single most important change is the addition of a third question to the prior standard set of two, “What would you like us to improve?” The reason it matters is that the old standard meant that Detractors gave clear suggestions for improvement, but Promoters did not get that opportunity. Promoters generally love you and want to help. They give longer and more helpful improvement suggestions than Detractors.

Learning check

Decide whether each of these statements is true or false. Answers are at the bottom of this article.

  1. The answers to “How likely are you to recommend [Company] to a friend?” were found to be the best predictors of future revenue trends among all the questions tested by Fred Reichheld in his 2003 Harvard Business Review article The One Number You Need to Grow.
  2. The answers to the “How likely are you to recommend [Company] to a friend?” were found to be the best growth predictors for all industries tested, in the same HBR article.
  3. The Net Promoter Score scale must start at zero and go to ten. All other scales are invalid.
  4. Reichheld’s research showed that customer behaviors really do change depending on their classification as Promoters, Passives or Detractors.
  5. The definitive reference source for the Net Promoter System is The Ultimate Question 2.0, and no other information on the design and implementation is available from Reichheld and Markey.

Looking forward

The next article in this series will cover the Bain Net Promoter System Framework.

 

As is often the case, the above is a slightly-edited version of a chapter in one of our books; in this case Net Promoter – Implement the System All of our books are available in paperback and Kindle formats from Amazon stores worldwide, and from your better book retailers.

[1] The “One Number You Need to Grow” HRB article can be found here:
https://hbr.org/2003/12/the-one-number-you-need-to-grow

[2] All podcasts are at http://www.netpromotersystem.com/resources/podcast.aspx

Learning check answers

  1. True.
  2. False. Other questions finished at the top of the list for a few industries. The recommendation question finished just behind in those cases.
  3. False. The scale can also go from ten to zero, or indeed one to five. It is important to be consistent, using a single scale for your company and keeping it the same from survey to survey.
  4. True.
  5. False. While The Ultimate Question 2.0 is a reference source, it has been updated extensively. The Bain updates to the system are covered in the Net Promoter System Podcasts. Satmetrix has independently developed what it calls NPS2.
News flash: Survey giver actually responds to survey taker!

NPS (1) – Do you really need a customer experience measurement and improvement system?

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This is the first in a series of blog posts about implementing the Net Promoter System.

The Net Promoter System®[1] is the most widely adopted system for managing customer feedback and improvement. It is used around the world and works well in all cultures and languages. Like most management systems, it has advantages and disadvantages. Its principal advantage is its simplicity. It is easy to understand and easy to communicate. Its disadvantages are two-fold: its lack of sophistication means it is tempting to find more intellectually pleasing solutions, and many implementers confuse the Net Promoter Score® and the Net Promoter System. Before going into detail on NPS®, let’s cover a few important points.

Current state of customer feedback systems on planet Earth

Like most readers, I receive requests to take surveys almost every day. Since I am interested in the topic, I fill out a lot of survey forms. I almost never hear anything from the people who sent the survey after that. What have they learned? What are they doing with my input. I took fifteen minutes to answer their questions, why can’t they take two minutes to keep me informed? Maybe they had no plans to do anything with the input other than report numbers to their management? Six months or a year later, I can observe that none of my improvement suggestions have been put into practice. I wind up feeling that my time has been wasted, and theirs too, since no action seems to have been taken.

My writing about customer experience strategy in general and the Net Promoter System in particular is about eliminating that waste, moving from survey processes to a mutual feedback and improvement process. The content of our books builds on my experience in implementing the Net Promoter System at HP, and helping others to do the same. While the system set out by Fred Reichheld and Rob Markey in The Ultimate Question 2.0[2] serves as the basis for all that follows, the system has been augmented in several ways that should speed up both implementation and results.

Do I actually need a feedback and improvement system?

Maybe you don’t absolutely need one. If you have a monopoly in your market and have government-imposed pricing, there may be nothing to gain in the short term. Why spend money if you already have all the income you can possibly get? Of course, your monopoly may not last. As well-known strategy guru Willie Pietersen told my class at Columbia Business School, “Somewhere in the world, somebody has just had an idea that will destroy your business.”

Cable TV companies discovered this to their cost when telcos started to compete with them. Most businesses are not monopolies and care about winning in their markets. They care about growth. According to Bain and Satmetrix, co-holders of the NPS service mark, NPS trends predict 20 to 60% of business growth trends, depending on the industry. Understanding how happy your customers are compared to your competitors is usually at least as important as comparing your sales coverage models and product features.

Make sure your customers are a company priority

Rather than reacting by saying “Of course we care about customers!” check your intranet, corporate annual reports, press releases and quarterly earnings statements. Do they actually mention customers? Check your CEO’s latest motivational email to all employees. Are customers mentioned in the top three priorities? Is cost reduction above customers on the priority list? Are things like “It is critical that we deliver the current quarter” at the top of the list? Checking the evidence is easy enough. It allows you to determine whether your company cares about customers from a strategic perspective. If customers are close to the top of the formal priority list in your company at the moment, get formal sponsorship for your NPS work and move ahead. More on how to get sponsorship this in another blog post. If customers are not on the list, you have some persuasion work to do first, and we will discuss how to do it.

Use operational data, not NPS, to run your company daily

All companies use operational data to ensure their processes are working as designed. The processes are in turn designed to maximize revenue, optimize cost, and respect defined service levels. Many operational metrics are delivered in real time. NPS has a time lag. Customer research and feedback needs to be used to adjust, prioritize and improve operational metrics. It is also particularly useful for the study of the relationship between cost and growth. For example, you may be able to show that pursuit of a particular cost metric has a measurable positive or negative effect on NPS, and therefore on future revenue.

In many cases, business processes that are cheap and simple are better for customers, as they may be faster and more efficient for them too. Operational data often has gaps or “white space”. This means your operational data may look good while the customer feedback may be bad. The most common example of this is the difference between the way customers measure delivery time for their orders compared to the way companies measure it. I will cover this in more detail another time. NPS should be used to supplement, correct and prioritize operational metrics, not as a substitute.

Avoid common mistakes

Customers are important to your company. Implementing a feedback system will improve their lives and your financial results. This series of articles will speed up your NPS work and will help you avoid many common implementation mistakes. You will benefit from understanding mistakes I have made and seen others make, and you will learn how they can be addressed or avoided.

Looking forward

My NPS blog series will cover the following subject areas:

  • Refresher on the history and main aspects of the Net Promoter System.
  • Ensuring NPS is a reliable, trusted metric.
  • Feedback, learning and improvement processes — the heart of the system.
  • Implementing a robust operational and analytic infrastructure.
  • An employee and team environment focused on loyalty.
  • Ensuring sustained leadership commitment.

Real-life examples of how to implement well and how to fail will be provided throughout the series.

 

As is often the case, the above is a slightly-edited version of a chapter in one of our books; in this case Net Promoter – Implement the System All of our books are available in paperback and Kindle formats from Amazon stores worldwide, and from your better book retailers.

[1] Net Promoter, Net Promoter System, Net Promoter Score, NPS and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.

[2] Fred Reichheld with Rob Markey: The Ultimate Question 2.0, Harvard Business Review Press, 2011, ISBN 978-1-4221-7335-0

 

#95 – Change equation – Are your metrics any good? – Great NPS podcast – Jeb’s Jobs technical support (funny)

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The Change Equation. Is your CX metric useful? A great new NPS podcast. A source for free-to-use images. Welcome to the 95th edition of my customer strategy newsletter. The five topics this week are:

  1. Change equation update
  2. How to understand whether your main customer satisfaction metric has any value
  3. Latest blog posts
  4. Notable items from other sites – NPS podcast with Razia Richter, Jeb’s Jobs
  5. Looking forward

Change equation update

I wrote about what I called the change equation in this newsletter about six months ago. I came across what I wrote again yesterday and realize my information was incomplete. Here is the full information. For change to happen, three elements are necessary:

  1. Dissatisfaction with the current state.
  2. A clear future vision.
  3. Practical first steps that are worth the cost and effort.

While the subject of this newsletter is customer-centric business strategy you should be able to see lots of useful examples all around you. In France, for example, the ‘Gilets Jaunes’ protests show a large number of people who are clearly dissatisfied with their current situation. However, the lack of central leadership for the movement means they have no clear future vision and of course no practical first steps towards that vision.

So it should be obvious that general dissatisfaction with the current state is not sufficient. The first thing you have to have is what I suppose should be called ‘specific dissatisfaction’. If you are a customer experience leader, or indeed lead any area of strategy, your list of things that need to be changed needs to be short and consistent. And to be consistent with myself, I would add that you need to be able to create dissatisfaction in your audience by telling stories, thereby creating emotions. (In another domain, think how great Greta Thunberg is at doing this.) Numbers, scores and trends just won’t create sufficient dissatisfaction on their own. If your data shows that you need to improve in a particular area, start the discussion with a story about an individual customer, ideally in their own words.

Remember the old Bobby McFerrin hit Don’t Worry, Be Happy. What you sometimes want to communicate is the opposite: Do Worry, Be Sad!

Finally, as noted the last time I mentioned the subject, the change equation is not my idea. Peter Mercury and Don Gordon promoted it strongly at DEC and Compaq and I believe it was their invention.

How to understand whether your main satisfaction metric has any value

As I come into contact with more and more companies selling to consumers I have been learning more about metrics and their interpretation. Since it is quite easy to game all measurement systems, I would like to suggest how you can tell whether your system has any value, meaning whether it measures what you think it measures. Let’s assume you are using NPS for this example, though you should be able to apply the same principle to any CX metric.

It should be obvious that customers who like you are more likely to become repeat customers than those that hate you. So when you look at your loyal customer list, meaning all those who have ordered more than once, Promoters should be better represented on the list than Passives or Detractors. If not, your current survey process is worthless. If you do not know which of your survey respondents have only bought once from you and which are more loyal customers, well, then you have a different sort of problem and are probably not yet ready to ask for feedback.

I hope this is reasonably clear. I will probably write more about the subject soon, possibly a full blog post with an example.

 

Our latest blog posts

Older posts are still available on the blog page.

image Useful if you have no NPS® benchmarks for your company – ACSI to NPS converter

As many of you know, public competitive NPS benchmarks are exceedingly rare. The only large-scale public customer satisfaction data I know of is the American Customer Satisfaction Index. So… here is how to convert ACSI scores to approximately accurate NPS numbers.
image Can we, should we reverse-engineer customer experience strategy for speed and effectiveness?

As regular readers will know, I have been quite frustrated by the focus customer experience professionals place on metrics. Your primary focus should be on designing and implementing improvement projects.
image Is the Net Promoter Score (NPS) dead?

The Net Promoter Score is dead! Or are the reports on NPS simply fake news? Well, the image at the top of the article shows what I found with a simple Google search. This article explores the main negative points made about the Net Promoter Score and suggests which ones are correct and which are misleading…

Notable customer experience items from other sites

Net Promoter System podcast with Razia Richter – When an operator becomes CcO

I thought this was one of the best episodes ever! Razia had a variety of senior positions at PetSmart before the CEO asked her to become Chief Customer Officer, a concept that was in its infancy at the time. I found several of her points particularly interesting. I suppose some of that was because she and I seem to agree on a lot of things. She placed a lot of emphasis on the need to communicate issues with personal customer stories rather than using dashboards full of numbers. And she gave a lot of useful advice about how to engage leadership team members in the improvement work.

I hope you will enjoy it here.

Comedy – Jeb’s Jobs – Technical support

This apparently dates from 2005 but I had not seen it before today. Poor Jeb is not having a good day. Will he ever be able to eat his sandwich?

Check it out here.

 

Looking forward

I was interviewed for customer experience articles for the Times business supplement and for the Wall Street Journal recently. The Times article appeared last week, though I have not been able to find an online version so far, so can’t provide a link. I will let you know when and if the WSJ article appears. It is about NPS.

Here are links to all of our books on Amazon.com. Kindle versions are available in all stores. Print versions are available from the major stores only. And as of two weeks ago, 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)

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