Newsletter

#87 – Reverse-engineering CX, Customer-employee NPS, CCXP exam questions, your personal promise to customers

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Let’s reverse-engineer customer experience. How about asking your employees what you should improve for customers? Welcome to the 87th edition of my customer strategy newsletter. The five topics this week are:

  1. Reverse engineer customer experience improvements
  2. How about implementing Customer-Employee NPS?
  3. Latest blog posts
  4. Notable items from other sites – Sample CCXP exam questions, personal promise to customers
  5. Looking forward

Reverse engineer customer experience improvements

As you may have seen in my blog post about customer-centric business strategy (see below), I have become intensely irritated by my observation that most companies seem far more interested in measuring satisfaction than improving it. The core work of customer experience people should be the implementation of improvements. Measurements should support this work, but they are not what customer experience leadership is about. Today, most of the work done by customer experience professionals is about measurement and reporting. While individual business and functional teams may get relevant information and work on their own improvements, this leaves a huge gap: Cross-business, cross-functional improvement work simply does not happen at all.

I believe there is a better way. Let me go further: I believe there is a better way to approach customer experience improvement work than any current methodology used by any company on the planet. My thinking on this is driven by a sales course I took in 1996. It was given by the husband-and-wife team of Mary and Michael Molloy and the book that accompanied it is called The Buck Stops Here. The principle was that you set up the sales process from the end, then worked backwards to put everything in place that you need to win. And only what you need.

Applying the principle to company-wide customer experience work would look like this:

  1. Start by getting the sponsorship, funding, and people you need to implement one to three effective improvement projects. Perhaps you would agree with your CEO and HR that the company’s development program for its best people would include such projects and that they would each last six months, with people committed half-time. If you can’t get the sponsorship and resources, well, at least you will have learned something and you can avoid bothering customers with research that won’t be used for anything. And if you are the CX leader, you will understand that you don’t have sponsorship for your work and you can look for a new job.
  2. Get agreement on how the one to three projects will be selected. Perhaps you will need to form a Customer Experience Council to make the decision and to monitor progress.
  3. Use the council to gain agreement on what data and information is needed to submit a project for approval. The council can also decide on a focus area. If you are a B2C eCommerce business, an example of a focus area might be understanding your repeat customers’ views about your company in more detail, and implementing improvements they suggest. Or perhaps you would like to get employee views about what cross-company improvements should be made for customers.
  4. Let’s suppose you have decided that the next six-month effort will be dedicated to implementing employees’ CX improvement ideas. Set up and carry out all of the necessary research. Kill off all other research you may be doing with customers and which will lead to nothing for the next six months, since you just decided you do not need it.
  5. Tell your people and your customers what you are doing.

The message to your teams would be simple: our customer-centric improvement work will be driven by specific research that will always result in improvement projects. There will be no customer research done simply to measure people. You have operational metrics for that, and don’t need to bother customers with it.

What do you think?

(I feel a book coming on.)

How about implementing Customer-Employee NPS?

Continuing one of the points made above, while customers are the best source of improvement suggestions, there is no reason they should be the only source. Why not ask your employees? On top of costing far less than customer research, you will get them engaged in improvement work and are likely to get enthusiastic volunteers.

Employees may have insights in areas that would not naturally occur to customers. One example that springs to mind happened shortly after HP set up a centralized pre-sales group in Bucharest, Romania. When the new operation started up, it would be fair to say that the people were quite passive, just doing what was asked. Sales people and resellers asked them to provide price quotations to customers, and they did that work well. Then the team supporting the Benelux noticed something. As negotiation cycles continued, sales people removed things from orders to meet a customer price point. Notably, offers for servers and storage that started with round-the-clock support services were often reduced to a cheaper business-hours-only proposal.

The Benelux team in Bucharest decided to systematically give the customers two proposals: one exactly as requested, and one with the service levels they believed the customers really needed, at a higher price. The initiative was a great success, with about half the customers taking the more appropriate service proposal at the higher price. For customers who accepted, it completely eliminated the situations where they would call during a weekend to be told that their contract did not cover the repair. A customer would never have thought of this double-proposal idea.

Using Net Promoter System methodology, a ceNPS feedback request would go to all of your employees and look like this:

  • How likely are our customers to recommend our company?
  • Why?
  • What should we improve for customers and how?

Please let me know what you think. If I could have come up with a word that started with ‘A’ for the name, I would have called it ‘aceNPS‘, which would have been nice.

Our latest blog posts

Older posts are still available on the blog page.

image
The nature of customer-centric strategy and why your team needs one (Intense 3-minute read)

I have been broadening my writing horizons somewhat over the last few weeks. Among others, I have contributed thoughts on customer strategy to discussion on LinkedIn, Quora and the members-only…
image Nudging customers to do what they should (2-minute read)

In their book Nudge, Richard Thaler and Cass Sunstein explain that people are poor at choosing among options, and can quite easily be ‘nudged’ or pushed gently to make a…
image The plural of ‘anecdote’ is ’emotion’ – You can use this for good or for evil

Some time ago I wrote a short article suggesting that the plural of the word ‘anecdote’ is not ‘science’. My point was that just because a lot of people have said something does not make it true. Let’s take this further and talk about anecdotes and emotions.

Notable customer experience items from other sites

Shep Hyken – Your personal promise to your customers

Shep always has some nice cartoons in his blog posts. His main content is about healthcare this time, though the message has far wider implications. Shep uses Dr. Neil Baum’s ten personal promises to his patients as an example for us all. I have to say that caring for elderly relatives means that I come into increasing contact with different parts of the (excellent) Swiss healthcare system. I think most doctors and clinics could benefit from a set of promises like these. It’s about a four-minute read here.

Omnitouch/Daniel Ord – 10 sample questions for the CCXP exam

I am a member of the Customer Experience Professionals Association (CXPA). The association offers one of the few recognized customer experience exams, which results in Certified Customer Experience Professional accreditation. There are six areas involved. Daniel Ord has posted sample questions in two of the areas. The set I suggest looking at first is about customer experience strategy. Test your knowledge here.

Looking forward

Two big things will be happening over the next seven weeks. As soon as the American Customer Satisfaction Index people publish their report for retail, I will be able to complete the data analysis work for my annual study of the relationship between employee and customer satisfaction. And I am also pleased to say that I will be speaking at the CustomerGauge Monetize! event in Amsterdam. I will probably be on stage on March 13th, and expect to stay over to the 14th. I hope to meet some readers there. The event website is here.

January book sales are going well. Thank you. 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. 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.

#86 – New NPS training course, how I landed in CX, the customer experience factory, customer advisory boards

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A new NPS ‘All hands’ training course is available. How I landed in CX. Welcome to the 86th edition of my customer strategy newsletter. The five topics this week are:

  1. Richard Owen and team launch new ‘all-employee’ NPS course
  2. How I ‘landed’ in Customer Experience
  3. Latest blog posts
  4. Notable items from other sites – Customer Advisory Boards and a CX Factory
  5. Looking forward

Richard Owen and team launch new ‘all employee’ NPS course

I am a big fan of training, and an even bigger fan of what is often called ‘all-hands’ training that targets an entire company. When we implemented NPS across HP we designed our own training course. We did not make it mandatory, but it was by far the most-taken voluntary course. On top of the knowledge I believe the establishment of a common vocabulary is important. When people use a particular word, they should have a common idea of what it means. Company-wide training courses provide this.

Richard Owen was CEO of Satmetrix up to their merger with NICE. He and his company, OwenCX, have now launched a new NPS course. I have taken it, and you will see that you can too, without charge for individual use. Here is what they say about it:

Owen CX’s NPS Training for all employees was designed from the ground up to engage, educate and align every member of the organization, no matter what their functional role is. Based on the same foundations as the certification program, it takes the core concepts and explains them in a fast paced and clear fashion, without talking down to the participant or baffling them with jargon.  For larger companies, the training can also be customized with video messages from their leadership and localized with multiple language subtitles.

The outcome you can expect from All Employee Training is every member of the organization with a common understanding of the program and how they can positively affect it.

The link to access the free trial is: here

It’s all online, and I liked it. Why not give it a try? Note that I have no commercial arrangement of any kind with Richard Owen or OwenCX.

How I ‘landed’ in Customer Experience  

Many customer experience leaders have entertaining stories about how they wound up in their jobs. I had the job in two different companies and got it by chance both times.

At Blue Bell Apparel, the parent company of Wrangler Jeans, I was the ‘Quality and Engineering’ manager for France, the Benelux and Italy from 1981 to 1983. As we were innovating by bringing stonewashing to the market, I decided to do something nobody had done before. I went to the most important customers in Paris and asked them what they thought and what they would like us to improve. The results were totally different to what my boss and I expected, and surprised relevant people across the company. That is how I learned that the only way you can know what customers want is by asking them.

The second time was of course at HP. It was in about 2007, I think. My job title was Director of Strategic Initiatives and I was the Chief of Staff for the Enterprise Business in EMEA, and for the overall HP EMEA leadership team. A leadership team member to who was in charge of the customer experience team reported left the company. I approached the head of the company in EMEA and said, “Here is how quality and customer experience work is managed today. Here is how I think it should be managed. These are just suggestions for when you appoint the new leader.” His reply: “OK, you are in charge.” Oops. That was in addition to the work I already had at the time.

What an experience! I never looked back.

Our latest blog posts

Older posts are still available on the blog page.

image The plural of ‘anecdote’ is ’emotion’ – You can use this for good or for evil

In their book ‘Nudge’, Richard Thaler and Cass Sunstein explain that people are poor at choosing among options and can quite easily be ‘nudged’ or pushed gently to make a particular choice. They encourage ‘benevolent paternalism’, meaning nudging customers to make choices that are in their own best interest…
image The plural of ‘anecdote’ is ’emotion’ – You can use this for good or for evil

Some time ago I wrote a short article suggesting that the plural of the word ‘anecdote’ is not ‘science’. My point was that just because a lot of people have said something does not make it true. Let’s take this further and talk about anecdotes and emotions.
image Strategy: Ask new questions to get new answers – Part6 of 6: Internal realities, and conclusion

The final article in the series covers what is often the most difficult area: Can you actually get the sponsorship and resources for your new strategy? The questions I propose should at least help you find out. And once you have analyzed the six situation analysis areas, you need to assemble your top insights about how to achieve a breakthrough strategy, whether for customer experience or anything else.

Notable customer experience items from other sites

CX Journey (Anette Franz) – Questions to consider before forming a Customer Advisory Board

Nice article by Annette Franz on CABs. I am a fan of customer advisory boards and interviewed members of one of HP’s boards to find out what they wanted us to improve. The top suggestion was that they wanted to be able to spend more time with each other. Several said that the main benefit they got was the opportunity to learn from their peers in other companies. The second point they made was that our balance for the speaking and listening was wrong and that we should let them do more of the speaking. As Annette puts it “Keep in mind that a customer advisory board is all about customer listening.” Read her article here.

Bain – Firing up the Customer Experience Factory

I find the concept of customer ‘episodes’ to be a good one. If you think of them in terms of episodes in a TV series, you will be on the right track. Each episode contains a lot of scenes. The sum of our experiences with all of the episodes creates our brand image for the series as a whole. (My all-time favorites are Game of Thrones and Sherlock. My favorite for 2018 was La Casa de Papel. I suppose that is not really relevant.) If we take the example of a home insurance company, an episode might be an insurance claim after something bad has happened. The episode starts when the customer starts to work out how to contact the insurance company and ends when the claim is paid. There are lots of short transactions that happen in between, like phone calls or emails. In principle an episode is the shortest thing for which the Net Promoter System should be used. This Bain article shows how companies structure their improvement work by episode and use that to form what the Bain people call Improvement Factories. Read all about it here.

Looking forward

While not directly about customer experience, I would like to thank the four readers who sent me suggestions about how to engage with the Swiss TV people about a misleading program they finally put out this week on GMO cotton in India. The various points and tone you suggested have produced a useful engagement so far. The extent of the usefulness remains to be seen as they really need to retract a substantial part of what they said on Tuesday. The rest of the program was good, and I learned new things that add to the knowledge I gained about cotton during my seven years in the clothing industry.

December book sales were substantially better than the already-good sales in December 2017, so thank you for that holiday gift. 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. 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.

#85 – The art of persuasion, BA NPS manipulation, CX tips for 2019, 1-800-GOT-JUNK NPS podcast

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Happy New Year! Some thoughts about the art of persuasion in 2019, how British Airways manipulates NPS numbers. Welcome to the 85th edition of my customer strategy newsletter. The five topics this week are:

  1. How to motivate people to act in 2019
  2. British Airways color-coding NPS scale (Don’t do this)
  3. Latest blog posts
  4. Notable items from other sites – 19 CX tips for 2019, 1-800-GOT-JUNK NPS podcast
  5. Looking forward – Our books are great gifts for your teams, colleagues and friends

How to motivate people to act in 2019

People, including people in our own teams, often act in ways that we can’t understand. Put aside insanity as an explanation for a moment. (Though if you enjoyed The Psychopath Test as part of your holiday reading, you will understand that mental problems can sometimes be the explanation.) Let’s assume that a predictable mechanism exists and is being followed by those you can’t understand. What could that mechanism be?

Regular readers won’t be surprised by my suggestion that the explanation lies in what Nobel-winner Daniel Kahneman calls System 1 and System 2, meaning the two different ways our minds function. You may remember that System 1 is emotional, intuitive, and quick to react. System 2 is slower and more rational. Most importantly, if System 1 has reached a conclusion, System 2 may not engage at all.

Here is the thought I would like to offer you for 2019: To persuade people to do things, rely on System 1 and try to forget about System 2. The best way of engaging people’s emotions is through stories. In the case of customer experience, these stories should ideally be told by customers. Naturally, if you are a customer experience leader, you will want to select and manipulate the stories that are told so they match your strategy, your funded initiatives; the things you need to achieve. These should of course be based on a System 2 methodology that is scientific in its nature.

My thoughts are evolving about the subject and I can use your help. You will probably recognize all of this as an evolution of the blog I sent you recently. I am trying to come up with a single image that communicates what I am getting at here. What follows is a first attempt. The upper row represents System 1 thinking and the lower row System 2. I have deliberately made the font size smaller in the second row to indicate that it is less important as a motivator. If you have other ideas on how to communicate this, please let me know.

British Airways color-coding NPS scale (Don’t do this)  

In the last newsletter I covered a Hilton hotel employee’s attempt to manipulate NPS results by writing a note soliciting a 9 or 10 and leaving it in a guest’s room. It is just human nature to try to influence any score you are measured on. While your managers may hope that you will do this purely by improving your performance, other methods are possible too.

British Airways has now started to color-code their NPS scale when soliciting feedback. You should absolutely not do this, according to Reichheld and Markey. I have to say that providing explanations about the numbers on the NPS scale is one of the most common questions I have been asked over the last few years. The explanation is usually something like, “I don’t think customers understand what the numbers on the scale mean, so I feel I should add some additional explanation.” A couple of times it was positioned as a way of addressing the cultural differences in the way people answer feedback requests. “If those grumpy Australians could understand that a Passive / indifferent score is actually a 7 or an 8 they would score us higher.”

Doing this sort of thing biases your results, and I believe you would fail an NPS audit (should such a thing ever exist). Note in passing that you should never compare customer satisfaction results between countries. Your competition is local, and you should only do single-country competitive comparisons.

And yes, this is yet another instance of Goodhart’s law, as covered a couple of weeks back here.

Here is what the relevant part of the latest BA email feedback request looks like. Thanks to reader Loch Miwa for sending.

Our latest blog posts

Only one new entry in the last couple of weeks. Older posts are still available on the blog page.

image The plural of ‘anecdote’ is ’emotion’ – You can use this for good or for evil

Some time ago I wrote a short article suggesting that the plural of the word ‘anecdote’ is not ‘science’. My point was that just because a lot of people have said something does not make it true. Let’s take this further and talk about anecdotes and emotions.
image Strategy: Ask new questions to get new answers – Part6 of 6: Internal realities, and conclusion

The final article in the series covers what is often the most difficult area: Can you actually get the sponsorship and resources for your new strategy? The questions I propose should at least help you find out. And once you have analyzed the six situation analysis areas, you need to assemble your top insights about how to achieve a breakthrough strategy, whether for customer experience or anything else.
image Strategy: Ask new questions to get new answers – Parts 4 and 5: CX industry and external trends

This time the situation analysis process moves on to relevant trends in your industry and in the external environment. Accurate observations about these areas can give you a competitive advantage. As always, you need to ask new questions to get new answers.

Notable customer experience items from other sites

CustomerGauge – 19 tips for great B2B CX in 2019

Katerina Sinitskaia wrote this great set of tips on the CustomerGauge site. I would have liked her to indicate her personal top three. Seems like a good checklist for everyone in any case. You can find them here.

Bain NPS podcast – Interview with Brian Scudamore of 1-800-GOT-JUNK

With my B2B focus I was not sure I could learn anything when I started to listen to this Net Promoter System podcast. Rob Markey interviewed Brian Scudamore, who seems to be somewhat of a serial entrepreneur. His focus area is helping people with relatively ordinary tasks like moving house, painting a house, and some other household-related tasks. He seems to use students for at least some of the work. I found it all fascinating and relevant to all types of business from about the 20th minute onwards. I believe we can all learn something from Brian’s approach. Listen to it here.

Looking forward

It’s January and your teams, colleagues and friends need our books to get 2019 off to a great start!

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. 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.

#83 – Most-read articles update, manipulating NPS scores, funny videos, AI bias

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Last week’s ‘most-read articles’ list is already way out of date, and an example of bad research from a major company. Welcome to the 83rd edition of my customer strategy newsletter. The five topics this week are:

  1. Most-read articles update – Includes one I could not mention last week
  2. Don’t measure individuals on NPS – They will find a way to manipulate it
  3. Latest blog posts
  4. Notable items from other sites – Funny service videos, AI bias
  5. Looking forward – Our books are great gifts for your teams, colleagues and friends

Most-read articles update – Includes one I could not mention last week

Over the last week I have learned quite a lot more about what people (including you) apparently like to read. On Friday I wrote an article about the badly-written PwC customer experience research report that I mentioned here last week. It has already become by far my most popular article on LinkedIn this year, doubling the prior number one’s reads. The new article is here. Note that I wrote to the lead author of the report last week Wednesday suggesting he retract it until it can be improved. He did not reply, so I put my full critique on LinkedIn on Friday. It is more extensive than what I wrote here last week.

And an article I wrote two weeks ago that is not about customer experience just became my second-most-read post on LinkedIn. I criticized a different piece of research, this time on the ‘morning routines’ of ‘300 high achievers’. Their suggestion was of course that if we all copy such routines that we will be high achievers too. The defect in the research is that there was no control group. Perhaps the medium and low achievers among us have the same routines, or maybe something even more intense that we should therefore avoid. Who knows? My article is here.

However, the most-read thing I wrote last year did not appear on LinkedIn and was not on my own site either. It has had over 16,000 reads. It is on Quora, a site where people ask questions and get answers. (I suspect the majority of ‘answers’ are written by the people who ask the questions, or at least the first answer on the list.) Quora had a huge data breach two weeks ago, which is why I did not include my post in last week’s list. In this case, the question was “Why do business people fly the expensive business class if the goal of businesses is to minimize cost?” 

Here is what I wrote:

“When the CEO and/or other senior executives feel they are justified in flying in Gulfstreams at $46 million each, it is hard for them to take a position that everyone else should fly in coach/economy. One Gulfstream costs the same as 300,000 advance purchase Chicago-Atlanta return fares. I just looked for midweek flights a month from now, on Delta, from Midway to Atlanta, so am not making this up. I realize that some companies still do have Gulfstreams and a coach-only policy. The same companies also impose travel freezes for Chicago-Atlanta (for example) while continuing to own and operate Gulfstreams.”

300,000 is not a typo. Let me know what you think. This reinforces my general view that (sadly) people prefer negative messages over positive ones.

Don’t measure individuals on NPS – They will find a way to manipulate it  

A family member checked in to a Hilton Garden Inn this week. This message was in her room:

This is a typical example of what happens when you measure individuals on NPS. Compared to your reference period before you started the individual measurements, your NPS will improve, whether or not the service has actually improved. I am not picking on Hilton here as they are not worse than many others. Indeed, I have received a note from a car sales person asking me to phone first if I could not give him a 9 or a 10. His year-end bonus depended on the number of Promoter scores he received.

If you find yourself stuck with a system like this because (for example) your CEO thinks it is a great idea, do what the General Motors CX leader does and ignore the scores. Just read the answers to the ‘Why?’ and ‘What could we do better?’ questions.

Our latest blog posts

The articles listed here are part of a new series on a specific aspect of strategy creation: the process of asking new questions so you can get new answers. Older posts are still available on the blog page.

image Strategy: Ask new questions to get new answers – Part6 of 6: Internal realities, and conclusion

The final article in the series covers what is often the most difficult area: Can you actually get the sponsorship and resources for your new strategy? The questions I propose should at least help you find out. And once you have analyzed the six situation analysis areas, you need to assemble your top insights about how to achieve a breakthrough strategy, whether for customer experience or anything else.
image Strategy: Ask new questions to get new answers – Parts 4 and 5: CX industry and external trends

This time the situation analysis process moves on to relevant trends in your industry and in the external environment. Accurate observations about these areas can give you a competitive advantage. As always, you need to ask new questions to get new answers.
image Strategy: Ask new questions to get new answers – Part 3: Competitors

There are two main categories of competitors: traditional and emerging. The emerging category includes companies you do not know about yet, but who may be about to take over your business. Here are some questions that will help you understand how you are doing compared to your competitors.

Notable customer experience items from other sites

Curated by Userlike – 16 great and really funny customer service videos

I love these and could not stop laughing. Enjoy them here.

You Are Not So Smart podcast – Machine Bias 

The actual title of this podcast is ‘How we transferred our biases into our machines and what we can do about it’. It is the best explanation of the topic that I have heard, and I consider it to be essential listening. The ‘You are not so smart’ podcasts can occasionally be tedious, but this one is definitely not. Learn more here.

Looking forward

It’s December and your teams, colleagues and friends need our books! Great end-of-year gifts, in my unbiased opinion.

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. 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.

#82 – Most-read articles, how not to do research, mandatory NPS for UK banks, cartoons

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The things I like to write and you like to read, and an example of bad research from a major company. Welcome to the 82nd edition of my customer strategy newsletter. The five topics this week are:

  1. Our most-read articles on our site and on LinkedIn
  2. What is your favorite color? (How not to do customer research)
  3. Latest blog posts
  4. Notable items from other sites – Mandatory NPS for UK banks, cartoons
  5. Looking forward

Our most-read articles on this site and on LinkedIn

I have been reflecting on the types of things I should write about. As you might expect, I would prefer to write things that you want to read. I think the best information I have about what you like to read (other than this newsletter with its ever-expanding distribution list) is the list of most-read pages on our website and the most-read articles I have posted on the main LinkedIn feed. Interestingly, to me at least, the lists are not the same.

Here are the top three from our site:

  1. The role and work of the Chief Customer Officer or customer experience leader.
  2. Measurement and improvement systems – Customer Effort Score
  3. New data: Does employee satisfaction drive customer satisfaction? Not really!

And here are the top three from LinkedIn:

  1. Journey mapping – The Main Customer Experience Measurement and Improvement Systems
  2. The Huddle and Inner Loop of the Net Promoter System® (5-minute read)
  3. Customer Experience ‘Watermelon Problems’

If you have not read some of these please have a look. And please let me know the main types of things you would like me to write about.

What is your favorite color? (How not to do customer research)  

Please bear with me for a moment. I am going somewhere with this. What follows is the general format used to gather data for a customer experience research paper published by a major global consulting firm. OK, I am going to exaggerate a little, just to make my point.

Please pick your favorite color from this list:

  • Red
  • Orange
  • Yellow
  • Light blue
  • Sky blue
  • Pale blue
  • Navy blue
  • Aquamarine
  • Purple
  • Sparkly glitter color

Here are the (fictional) research report headlines based on analyzing the answers:

In a shocking development that should change the way you think about color, global consumers prefer red, orange or yellow to any color of blue by a margin of over five to one. And for the first time ever, green has totally disappeared from global color preferences! Global fashion houses are in turmoil and those who have overstocked green items are expected to lose half their value on Wall Street.

This is why you should never base customer research on a closed list of choices that you have made up. The answers would be completely different if you simply asked people the open question, ‘What is your favorite color?’ and let them write it in a blank field.

I wish I were exaggerating, but I am not. Even reputable companies do closed-list research. Here is a new publication from PriceWaterhouseCoopers that claims to tell us what ‘really matters to American consumers’. The core questions, based on a closed list of 20 choices were ‘Q: When it comes to great overall customer experience, how important do you think each of the following will be in the future? Which of the following things are worth paying more for?’ Choices ranged from ‘Charitability’ to ‘Efficiency’, as you will see on page six of the report. Personally, my top answer would have been ‘That a company remembers me’ but that was not among the choices. Try to think of your top choice before looking at the graph with the list on page 6.

The report gets worse in that the headlines and takeaways do not seem to match the research. On page two they have an overview that says “What truly makes for a good experience? Speed. Convenience. Consistency. Friendliness.” Speed and consistency were not even among the possible choices on the list. The person writing the report seems to have made it up based on personal bias, or just on nothing at all. Disgraceful.

If you work at PwC or believe I have this wrong, please let me know.

Our latest blog posts

The articles listed here are part of a new series on a specific aspect of strategy creation: the process of asking new questions so you can get new answers. Older posts are still available on the blog page.

image Strategy: Ask new questions to get new answers – Parts 4 and 5: CX industry and external trends

This time the situation analysis process moves on to relevant trends in your industry and in the external environment. Accurate observations about these areas can give you a competitive advantage. As always, you need to ask new questions to get new answers.
image Strategy: Ask new questions to get new answers – Part 3: Competitors

There are two main categories of competitors: traditional and emerging. The emerging category includes companies you do not know about yet, but who may be about to take over your business. Here are some questions that will help you understand how you are doing compared to your competitors.
image Strategy: Ask new questions to get new answers – Part 2: Partners

The majority of companies have partners for at least some of their business. The three main categories of partners available to most businesses are resellers, implementation partners, and subcontractors. This article concentrates on the questions that should be asked and answered to get new insights about partner strategy.

Notable customer experience items from other sites

Ian Golding: The future of VOC measurement – don’t let organisations do it themselves!

Ian is one of the top CX people on the planet and has great success with his ‘Masterclass’. The full article is worth reading and the core news is that UK banks are now required to be measured on customers’ willingness to recommend them and they have to post the results in their bank branches. This healthy development was driven by reports from the UK Competition and Markets Authority (CMA) and Financial Conduct Authority (FCA) saying that UK banks do not compete enough with each other. Apparently only 3% of UK consumers change banks each year. The new regulation requires independent measurement of customer satisfaction and they are of course using the NPS recommendation question as the main score. GfK did the first study. Read Ian’s article here. Fascinating.

Marketoonist – Cartoon Powered Marketing 

I just came across this entertaining site. I suggest you start with the customer experience article not far from the top. Tom Fishburn is the artist and he licenses his work. You can find it  here.

Looking forward

It’s December and your teams, colleagues and friends need our books! Great end-of-year gifts, in my unbiased opinion.

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. 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.

#81 – Goodhart’s Law, eCommerce again, loyalty equals cost reduction, VOC program design

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Goodhart’s Law and being careful about metrics, eCommerce that competes with own retail stores. Welcome to the 81st edition of my customer strategy newsletter. The five topics this week are:

  1. Goodhart’s Law is 43 years old – We still need to be careful with metrics
  2. Web stores that compete with physical locations – My latest experience
  3. Latest blog posts
  4. Notable items from other sites – Fred Reichheld, Agi Marx
  5. Looking forward

Goodhart’s law is 43 years old – We still need to be careful with metrics

Charles Goodhart is a British economist. He remains disappointed that he is best known for something he wrote way back in 1975. His original words were not terribly inspiring:

Any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.

He was writing about UK monetary policy and the point he was making was that if a particular metric, such as the M2 Money Supply, became the sole focus of monetary supply it would be made to look better, no matter what the underlying reality.

Let me try to rephrase the ‘law’. Once a single metric becomes a major focus the people being measured will make sure it improves. A good example is what happened when a new emphasis was put on crime statistics in Chicago:

In the UK someone in the National Health Service decided to measure hospitals on emergency room arrivals being served in under four hours. A bizarre result was that patients were kept inside ambulances until staff were certain that they would be treated within four hours of being taken from the ambulance to inside the hospital, when the clock started to tick. Guess what? The metric improved.

The same thing will happen if you measure individuals on NPS or CSAT scores. The numbers will improve, even though the reality may be unaffected. I recently came in contact with a situation where call center agents who had to phone customers who gave low scores were measured on those same scores. A surprisingly high (though not surprising to me) number of customers supposedly claimed they had not understood the survey and asked to have their scores changed from the worst to the best number. Success???

The message here is that you should not measure individuals on NPS, CSAT or indeed any score that they can personally manipulate. Customer satisfaction metrics are best used as collectives scores for a team or an entire organization.

Web stores that compete with physical locations – My latest experience 

It is Black Friday as I write this. I have just had the opposite experience to the one I wrote about last week. The latest experience is not a good one. I have a loyalty card with the Fnac chain. For those unfamiliar with the brand, they sell books, CDs, DVD/Blu-Ray, photo equipment and electronics. For US readers, I would describe them as a combination of Barnes & Noble and Best Buy. Their weekly email update included a Black Friday deal with 18% off the 2018 9.7″ iPad. Since I have been looking for just that, I decided to pop into the Geneva retail store this morning. Surprise, they were marked ‘10% off’.

So I went to a sales person. His answer, “Oh we never know what those web people are going to do. It’s 10% off here.” Then I pointed out that the web site says I can order at 18% off and pick it up an hour later in this very store. Answer, “If they say so, I suppose you can do it, but I can’t give you 18% off directly.”

This is the exact counter-example to the one I gave last week. Your eCommerce operation cannot compete with your retail outlets. It makes customers like me think you are stupid and trying to trick us in some way. It is a well-known direct marketing phenomenon that you should not give people choices. Having different prices in-store and on the web is idiotic. It means neither price can be trusted to be the lower without checking.

Our latest blog posts

The top two on this are part of a new series on a specific aspect of strategy creation: the process of asking new questions so you can get new answers. Older posts are still available on the blog page.

image Strategy: Ask new questions to get new answers – Part 2: Partners

The majority of companies have partners for at least some of their business. The three main categories of partners available to most businesses are resellers, implementation partners, and subcontractors. This blog proposes how to understand your current status with partners and what you can do to improve.
image Strategy: Ask new questions to get new answers – Part 1: Customers

First in a series about the first and most important step in determining a new customer experience or business strategy: getting an accurate picture of where you are today and what could possibly be done to improve your business. The key point is that you need to ask new questions to get new answers and insights.
image Invisible gorillas prove you need automated text analytics. Seriously! (7-minute read and videos about inattentional blindness)

We are awful at observation. Our brains just don’t work all that well. Various psychological experiments lead to the inevitable conclusion that our brains work hard to fit whatever we perceive to the list of things we already know about…

Notable customer experience items from other sites

Fred Reichheld: The best way to cut costs is to make customers happier 

You may know Fred Reichheld as the co-inventor of the Net Promoter System and the Net Promoter Score. While he is not hugely active these days, he has just written a new article that introduces an interesting twist to his favorite theme of customer loyalty. Rather than talking about revenue growth he talks about loyal customers as a cost reduction opportunity. I particularly like his point on the potential for changing sales incentives to favor rewards for customers to stay with companies for at least 18 months. Lots of good ideas in this three-minute read here.

Agi Marx: Voice of the customer: Why you need it and how to start your VOC program 

Agi wrote this detailed blog for Thematic, where she is director of marketing. I find her insights about AI, text analytics and the importance of actionable insights quite compelling. A combination of art and science is needed to avoid simply identifying problems but not what you can do to resolve them. I think this blog provides good reading for any company that is setting up a Voice of the Customer program or trying to improve what they already have. It is about a ten-minute read and you can find it  here.

Looking forward

Thank you for the great feedback on the ‘ask new questions’ blog posts on customers and partners. The next one will be on competitors.

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. 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.

#80 – SAP & Qualtrics, eCommerce, Customer Success and more

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SAP acquires Qualtrics, eCommerce that complements retail stores. Welcome to the 80th edition of my customer strategy newsletter. The five topics this week are:

  1. SAP acquires Qualtrics – Some thoughts about the value of the deal
  2. Web stores need to complement physical locations – My latest experience
  3. Latest blog posts
  4. Notable items from other sites – Customer Success, strange customer stories
  5. Looking forward

SAP acquires Qualtrics – Some thoughts about the value of the deal

 

At the time I retired from HP we were using Qualtrics as our provider for double-blind benchmark research. We did not use their customer experience software, choosing mainly to develop our own and use feedback processes built into our CRM systems. So, while their software has a good reputation, I have no personal experience with it. I knew SAP well when I worked on the global alliance team at Compaq and have tried to follow their progress at a distance since then. Last week SAP announced they are acquiring Qualtrics. You can see details here.

To me at least, the obvious question is how Qualtrics, with expected revenue of $400 million in 2018 could possibly be worth $8 billion, even with a 40% growth rate that they expect to continue. SAP has borrowed the money to make the purchase, though their net income in 2017 was about $4.5 billion.

The most important point to bear in mind is that there is only one correct way to value an acquisition target: Discounted Cash Flow (DCF). If you think something else, like ‘earnings multiples’ is correct you are simply wrong. DCF uses all expected future earnings before taxes, depreciation, and amortization (EBITDA) forever to provide a value calculation. The variables that matter most are the growth rate and the interest rate (the discount rate) used. In general, the company being acquired projects much higher growth rates than the acquiring company believes to be realistic. This leads to a disagreement on the price.

The acquiring company resolves that disconnect by designing synergies into its integration strategy. The reason the majority of acquisitions fail is that the overall integration strategy is unrealistic. The lack of realism comes from underestimating the difficulties of cultural integration and overestimating the value of synergies or how easy they will be to achieve.

Culturally, German and US business cultures are about as far apart as it is possible to be. (Source: When Cultures Collide by Richard D. Lewis.) SAP has an American CEO, and that will help a little, but not much.

Synergies fall into several categories:

  • Growth synergies that the companies bring to each other. More growth requires more sales people and partners. The existing sales people cannot possibly just sell the other company’s products. They already have full-time job, and software sales are specialized.
  • Cost synergies are reductions in people, buildings and payments to suppliers. If cost synergies have been built into the plan German labor laws mean they will disproportionately affect Qualtrics people as they are mainly located in places where workers are not protected.
  • Dis-synergies also exist, meaning customers or partners who will leave SAP or Qualtrics because they do not want to work with the other company.

Since such synergies are frequently insufficient to justify the acquisition price acquiring companies, driven by management hubris, jump into the fantasyland: the calculation of the supposed value of preventing a competitor acquiring the company. Such calculations are meaningless.

So… digging out my DCF spreadsheet from my M&A course at Kellogg… I can’t get to an $8 billion valuation without aggressive growth rates and at least some cost synergies. How realistic are such growth rates? It will take 18 to 24 months to find out…

Web stores need to complement physical locations – My latest experience 

 

Someone (I don’t remember who) recently told me that water was the most critical thing on the planet because without water you can’t make coffee. This came home to me yesterday morning when our ‘bean to cup’ Delonghi coffee machine stopped working. The machine is (or was) about six years old and has been great. I quickly found a repair manual online, took it apart and determined that one of the two heating elements was no longer working. We once had a similar Delonghi machine fail while under warranty. They took more than a month to repair it. I decided to go shopping online. The situation required fast action.

I started by looking at some comparison tests on consumer sites and this took my choice down to a few models. I then used a price comparison site to determine a budget. Several of the major Swiss brick-and-mortar stores also have eCommerce sites and they were on the comparison lists, sometimes with prices that were close to the lowest. However, the main ones had one attractive feature that made all the difference. Their websites (Fust, InterDiscount, and Media Markt were the ones I looked at) all provided the stock status in each of their physical stores as well as proposing to sell online, usually with free shipping.

My need to have a new machine working the same day was paramount. I checked stock status at nearby stores for the models that interested me. I unboxed the new machine at home an hour later. Delicious experience. All too many companies that have physical locations run their eCommerce sites separately, essentially creating internal competition with lots of opportunities for disconnects. Intelligent companies have sites that complement their physical operations, making life much easier for people with urgent needs like mine.

Our latest blog posts

The top one on this is the first in a new series on a specific aspect of strategy creation: the process of asking new questions so you can get new answers. Older posts are still available on the blog page.

image Strategy: Ask new questions to get new answers – Part 1: Customers

First in a series about the first and most important step in determining a new customer experience or business strategy: getting an accurate picture of where you are today and what could possibly be done to improve your business. The key point is that you need to ask new questions to get new answers and insights.
image Invisible gorillas prove you need automated text analytics. Seriously! (7-minute read and videos about inattentional blindness)

We are awful at observation. Our brains just don’t work all that well. Various psychological experiments lead to the inevitable conclusion that our brains work hard to fit whatever we perceive to the list of things we already know about…
image Tips for communicating the purpose of cost reduction (7-minute read)

I was talking to a former colleague yesterday. He described a recent meeting where he learned that major cost cutting still continues where we used to work. The discussion made me reflect on the horrible mistakes and best practices I have seen when cost reductions are communicated…

Notable customer experience items from other sites

Neil Davey: What are Customer Success Managers and why are they so important? 

Customer Success Managers started in software and have become important players in other businesses. I suppose they started in software because software businesses tend to have high margins and could afford to make the investment without being certain it would work. In HP’s $4B software business we implemented them in two sub-businesses first. The huge improvement in contract renewal rates meant that we quickly decided to implement them everywhere. Their role is to make sure customers get the return they expect on their investment. Their services are provided without charge and they do not carry sales quota, at least in what I would call a ‘pure model’. Neil’s article for MyCustomer goes into detail and I think you will find it an interesting five-minute read here.

Strange site – Apparently the customer is not always right

Some of these are far from politically correct. I think it is simply a site where customer service agents of different types simply post stories about what they consider to be bad or unreasonable customers. Some of these are funny, some sad, some frankly difficult to understand. See what you think here.

Looking forward

I will need to go through my list of partner-related questions for the second blog in the ‘Ask new questions to get new answers’ series. Other than that, not much going on in the coming days. Your ideas for articles are always welcome.

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. The thing that you can do to help us most is to write reviews of our books 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.

#79 – Implicit search, Skeptics Guide, bad service

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Implicit search, The Skeptics Guide to the Universe. Welcome to the 79th edition of my customer strategy newsletter. The five topics this week are:

  1. Could ‘implicit search’ revolutionize two-way customer feedback? 
  2. Just started reading The Skeptics Guide to the Universe
  3. Latest blog posts
  4. Notable items from other sites – An article and some statistics about bad service
  5. Looking forward

Could ‘implicit search’ revolutionize two-way customer feedback? 

Some time after HP acquired the Autonomy software company I was appointed as the only ‘legacy HP’ person on the Autonomy leadership team. Ian Black was one of my new colleagues and was quick to show me an impressive technical demonstration. This was how I learned about Implict Search.

The principle is quite simple, though non-obvious. We are used to searching explicitly for things. We type our search terms and get a list of answers. This demo was different. As I typed out a series of sentences in Microsoft Word, the IDOL add-in displayed relevant search results at the top of the screen. I did not have to do anything. The text I was writing simply ‘implied’ that I might be interested in the corresponding web pages.

Before drawing my conclusion, let me state my greatest personal disappointment in what we all (and yes, I am including you) do as customer experience professionals every day: In 99% of all cases, based on my own research, we ask customers for feedback and then never get back to them in any way. We don’t tell them what we have learned from their feedback, and we don’t tell them what we plan to improve. We are a disgrace to our profession!

This is where implicit search could come in. Suppose a customer is filling in a feedback form about why they like (or hate) your company and what should be improved. Imagine using implicit search to close the loop back with customers while they are still filling in the feedback form… For example, in all too many cases, software customers suggest that already-existing features should be added to the software. Implicit search could detect this and let the customer know how to find and use the feature. At the very least, we should be able to detect the subject matter of the complaint or suggestion and provide at least some immediate automatic loop-closing. What do you think?

Just started reading ‘The Skeptics Guide to the Universe’ 

Steve Novella, his brothers Jay and Bob, Cara Santa Maria, and Evan Bernstein have been publishing a weekly podcast for over ten years. Their mission is to promote science and critical thinking. I have been a fan from the time I discovered them about six years ago. Quite a lot of their style of thinking and communication has worked its way into our books and blogs. Now Steve has led the team in the writing and publication of the book of the same name, which appeared a month ago. I just received it and am only at page 48. I am already a Promoter! I definitely would recommend it.

Steve is a practicing neurologist. He goes into great detail about the ways our brains trick us, how to tell that this is happening, and what we can do about it. Above all, I find their devotion to the scientific method admirable. Customer Experience leaders, and indeed business leaders in general, can learn a lot from the team. There are a lot of simple but profound insights, such as their short explanations of common logical fallacies and of the difference between the unexplained and the unexplainable.

So, why not give it a try? Their latest podcast was recorded with a live audience in Cambridge, UK, though the team is based in the USA. You should be able to find their book on Amazon and from leading booksellers in the USA, Canada and UK so far. I don’t know the full list. They have found additional publishers and the range of countries covered is increasing. I suspect other languages will come quickly. Note that I have no relationship of any kind with the team. I just love their work.

 

                                

 

Our latest blog posts

The top one on this list was inspired by an early chapter in the SGU book mentioned above. Older posts are still available on the blog page.

image Invisible gorillas prove you need automated text analytics. Seriously! (7-minute read and videos about inattentional blindness)

We are awful at observation. Our brains just don’t work all that well. Various psychological experiments lead to the inevitable conclusion that our brains work hard to fit whatever we perceive to the list of things we already know about…
image Tips for communicating the purpose of cost reduction (7-minute read)

I was talking to a former colleague yesterday. He described a recent meeting where he learned that major cost cutting still continues where we used to work. The discussion made me reflect on the horrible mistakes and best practices I have seen when cost reductions are communicated…
image When should you ask for customer feedback? And should you survey customers at all? (5-minute read)

I have a sort of hobby: answering companies’ requests for my feedback and seeing whether they will write back to tell me what they have learned and what they are going to do to improve. They almost never do…

 

Notable customer experience items from other sites

SurveyMonkey – And the award for World’s Worst Customer Service goes to… 

OK, so this is completely unscientific; rather disappointing from SurveyMonkey and contrary to my usual way of thinking. However… however… the four anecdotes told here are indeed entertaining. Just remember, as the SGU people say, “The plural of anecdote is not science.” These companies do not score badly in any public CX ranking I am aware of.

Read the anecdotes here.

Statista – Companies which received the highest share of negative responses to their customer service in the United States in 2017

Since we are on the theme, here is something more scientific from a site you may appreciate. Statista provides (surprise!) statistics on a huge variety of topics. This particular graph covers a subset of US companies that customers do not seem to like much. Have fun exploring the data on this and other topics here.

 

Looking forward

Thank you for the kind feedback I received about the Net Promoter System podcast on healthcare that I recorded with Rob Markey and which was released last week. Other than that, I should have time to do more writing and blogging as the days get shorter and shorter here in the Northern Hemisphere.

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. The thing that you can do to help us most is to write reviews of our books 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.

#78 – My new NPS podcast on Healthcare, customer and employee satisfaction research, dropoff rates, Temkin/Qualtrics

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My new Net Promoter System podcast on healthcare with Rob Markey, customer vs. employee satisfaction research . Welcome to the 78th edition of my customer strategy newsletter. The five topics this week are:

  1. Starting my annual research on customer and employee satisfaction 
  2. My new Net Promoter System podcast with Rob Markey is available
  3. Latest blog posts
  4. Notable items from other sites – Survey completion rates, Temkin & Qualtrics
  5. Looking forward

Starting my annual research on customer and employee satisfaction 

Most of you know that I have published research on the relationship (or lack thereof) between customer and employee satisfaction in March this year and last. My process is to assemble employee satisfaction data from Glassdoor in October and November, and to add the American Customer Satisfaction Index data for each company the following March. The thought process is that changes in employee satisfaction should lead to changes in customer satisfaction. We would not expect the effect to be instantaneous.

Once I have three years of data I should be able to do my first investigations of the trends over that time. If a company has had three straight years of employee satisfaction improvement or decline, has that had any effect on customer satisfaction? And I expect to investigate market share trends for some industries.

I was going through some Glassdoor data today I was wondering whether employee satisfaction has declined at companies that have had major scandals of whatever kind. This is not the place to describe the nature of each scandal, but here is the 2017 to 2018 employee satisfaction trend for a few such companies:

  • Wells Fargo: No change from 2017, and the 2017 score was up slightly from 2016.
  • Facebook: The 2018 score is lower than the scores for 2017 and 2016, again slightly.
  • United Airlines: Employee satisfaction improved slightly.
  • Apple: No change.

Two remarks. First, I did not decide that these companies had notable scandals. I just did a Google search on ‘Corporate Scandals’. Second, employees don’t seem to care much about scandals that affect their employers.

It will be interesting to see how the customer satisfaction trends turn out.

My new Net Promoter System podcast with Rob Markey is available 

A few weeks ago I mentioned that I had recorded a new ‘Net Promoter System podcast’ with Rob Markey of Bain. It went live on the iTunes podcast feed just before I wrote these lines. The subject this time is customer experience measurement, or I suppose it is really patient experience measurement and improvement in the healthcare industry.

The podcast is the first in what I hope will be a series on specific industries. I feel strongly about healthcare because I believe it is the extreme example of an industry that measures things for its own benefit and does so in a way that does almost nothing for patients. I believe this is easy to understand.

If you have been hospitalized for any reason, think back on how the hospital asked you for feedback after the intervention. Let’s pick the semi-random example of a hip-replacement operation. It takes some time after the operation before you can understand how effective it was. So… when did the hospital ask you for feedback. It almost always seems to happen just as you are preparing to leave or are walking out the door. Did anyone (including the surgeon) ever come back six months later to ask you how functional your hip was, and whether you would recommend the operation to someone else? I thought not.

I write these lines, the iTunes podcast feed has pushed this one to my phone. It is not yet live on the Bain site. You can find all past Net Promoter System podcasts, including the eight I did with them, on iTunes and at http://www.netpromotersystem.com/resources/podcast.aspx.

 

Our latest blog posts

Older posts are still available on the blog page.

image Tips for communicating the purpose of cost reduction (7-minute read)

I was talking to a former colleague yesterday. He described a recent meeting where he learned that major cost cutting still continues where we used to work. The discussion made me reflect on the horrible mistakes and best practices I have seen when cost reductions are communicated…
image When should you ask for customer feedback? And should you survey customers at all? (5-minute read)

I have a sort of hobby: answering companies’ requests for my feedback and seeing whether they will write back to tell me what they have learned and what they are going to do to improve. They almost never do…
image Contra Revenue: Could it be your easiest way to improve profit margins? (5-minute read)

On the general subject of ‘customer-centric cost reduction’ I would like to discuss an area that many medium to large companies do not examine at all, and the rest do poorly. If you have never heard of Contra Revenue, please read on…

 

Notable customer experience items from other sites

SurveyMonkey – The effect of the number of questions on survey completion rates

Please read the title and what follows carefully. This is not about response rates, but about completion rates. There is a difference. The question the people from SurveyMonkey answer comprehensively is whether adding more questions causes a significant number of people who have started to respond to a feedback request to stop responding when they are part way through. The answer is that there is only a very small effect. To study the question, they looked at 2,000 randomly-selected surveys with one question, 2,000 with two questions and so on, up to 2,000 survey with 50 questions.

There is, however, some evidence elsewhere that the quality of responses goes way down as survey forms get longer. After a while customers may just pick random answers from a list in a bid to get finished quickly. People creating surveys also do silly things. An example would be a popup survey that appears immediately when you open a web page, and which asks you what you think about that web page. You may be prepared to answer any number of questions randomly in a bid to get to a comment box that lets you say that the feedback request should come after you have been able to actually use the site.

The study is about ‘dropoff’ or ‘dropouts’. This is not at all the same as response rates, as the research only covers people who answered at least one question. If they did not answer any questions they are not included in the research. I have to say that I have tried to work out how to study the effect of the number of questions on response rates, and I can’t come up with a good scientific method. Suggestions welcome. Read it here.

Temkin Group acquired by Qualtrics

Bruce Temkin just announced that his company has been acquired by Qualtrics. They simultaneously announced the creation of the Qualtrics XM Institute which Bruce will lead. The institute will provide both customer experience benchmarks and thought leadership in a variety of areas. I admire the work Bruce has done up to now, including the creation of the Customer Experience Professionals Association. He publishes an annual NPS benchmark report as well as reports covering his own more complex metrics. Read all about the new setup here.

 

Looking forward

October has set a new book sales record for a month of October! Thank you. Of course there was only a single month of October available for comparison. But still… October last year was by far our record month at the time. Other than that, I am looking forward to hearing what you think of the new Net Promoter System podcast and which industries you would like us to cover, assuming the series moves forward.

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.

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.

#77 – The Ultimate Question? Invisible dragons, text analytics, response rates

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The ultimate question, the impossibility of proving something does not exist, text analytics, survey response rates and scores for hospitals, LinkedIn groups. Welcome to the 77th edition of my customer strategy newsletter. The five topics this week are:

  1. Is ‘willingness to recommend’ really ‘The Ultimate Question’?
  2. It’s impossible to prove that something does not matter to customers
  3. Latest blog posts
  4. Notable items from other sites – Text analytics
  5. Looking forward – I am now a LinkedIn Group Detractor

Is ‘willingness to recommend’ really ‘The Ultimate Question’? 

In their book The Ultimate Question 2.0 Reichheld and Markey refer to the research first covered by Fred Reichheld in his landmark HBR paper The One Number You Need to Grow. The research was about what single question best predicts revenue growth. Such a question is referred to as ‘The Ultimate Question’. While most people remember the answer as “How likely are you to recommend company X to a colleague or friend?” that is an incomplete picture.

Yes, the ‘Ultimate Question’ is indeed whatever single question best predicts revenue growth. And yes, the recommendation question is that question in most industries. It finished in first or second place in 11 of 14 industries among 40 questions tested. However, there are industries for which it did not finish on top. You can find full details by clicking on the link to the HBR article, and I want to mention that ‘overall satisfaction’ did not make it to the top for any industry.

So, what does this mean if you are starting to implement the Net Promoter System? It means that you are best off starting with the recommendation question as your Ultimate Question. If you ask an additional question and compare its predictive value to the recommendation question you may get a surprise. If the second question is shown scientifically to be a better predictor, then that is what you should use. At the risk of being pedantic, it is not impossible that overall satisfaction could still be the Ultimate Question for your company. However, please ensure that all departments in your company use the same question, or communication will be impossible.

Finally, some objectors to the recommendation question say, “I have come up with this composite metric that is a better predictor of market share.” That may well be the case. However, composite metrics, by definition, are not the answers to a single question.

It’s impossible to prove that something does not matter to customers 

I was recently asked “But how do you know for certain that customers don’t want this?” My answer was that I could not prove they didn’t want it. I could only suggest that the science-based research that I carried out suggested that customers did not care about it.

This type of discussion can be quite problematic for customer experience leaders who have strong-willed and outspoken senior leaders to deal with. The most difficult situations arise with managers who say they have built their entire careers in one way: “I trust nothing but my own instinct!!!” (If you are a customer experience leader and your manager does not trust science or scientists, you should probably look for a new job.)

The challenge is that from a scientific perspective it is impossible to prove the absence of anything. I can state that there is a completely invisible small blue dragon hovering between you and the screen on which you are reading this. It is totally impossible for you to prove that this is not so. It is of course extremely unlikely.

We see this communication challenge from time to time in customer experience. However, it is an increasing phenomenon in society as a whole. “Unless you can prove to me that GMOs (or perhaps Glyphosate, or vaccines) pose no risk at all on their own or in combination with any other chemical, they should not be allowed.” That’s a completely impossible task as absence of risk or of anything else can never be proven. Why is it so hard to persuade people to accept scientific consensus?

 

Our latest blog posts

Two of the three below are new original content. The third is an edited chapter from one of our books. Older posts are still available on the blog page.

image When should you ask for customer feedback? And should you survey customers at all? (5-minute read)

I have a sort of hobby: answering companies’ requests for my feedback and seeing whether they will write back to tell me what they have learned and what they are going to do to improve. They almost never do…
image Contra Revenue: Could it be your easiest way to improve profit margins? (5-minute read)

On the general subject of ‘customer-centric cost reduction’ I would like to discuss an area that many medium to large companies do not examine at all, and the rest do poorly. If you have never heard of Contra Revenue, please read on…
image Start-ups: Thoughts about implementing the Net Promoter System (3-minute read)

Let’s face it; most start-ups fail. Some fail because they think they are doing what customers want, but they are simply wrong. Some fail for other reasons. For start-ups, I think the Net Promoter System implementation challenge is about ‘Crossing the Chasm’…

Notable customer experience items from other sites

Thematic & Alyona Medelyan: Amazing article on text analytics

This is without doubt the best article I have read about text analytics ever. Regular readers will know that I consider it to be the top technical challenge we face in customer research. We tend to send customers long feedback requests with lots of rating questions simply because we don’t yet trust text analytics. Please read the article. It will take you about ten minutes and I guarantee you will learn something new. Read it here.

Business Broadway: The relationship between survey response rates and survey ratings 

It is always interesting to read well-structured research that produces opposite results to prior research. In this case, Bob Hayes wrote an article way back in 2012 that shows that the more people respond, the better the ratings. My own research at HP on NPS ratings and response rates showed the opposite, as people who really liked us seemed disproportionately likely to respond when we had low response rates. I wonder whether there is something specific to hospitals that mean that Bob’s results follow a similar but opposite logic. Could patients who were upset with their experience at a hospital be more likely to respond than those who were happy? Please let me know what you think. Read all about it here.

 

Looking forward

I have spent / lost quite a bit of time over the last three weeks trying to persuade LinkedIn to reverse the changes they have made to Group management. I had a teleconference with representatives of the product team last week and they committed to reverse one of the changes, though with no date attached. That’s really not good enough. The 102,000 members of the Customer Experience Management group that I manage need better. Since the changes were implemented user interaction with new posts has dropped off a cliff. As I write this there are a total of two comments on the last 50 articles that have been posted. The tools I used to use to stimulate conversations and limit the appearance of irrelevant stuff have almost all disappeared. Disappointing. This means that I have to change my NPS status for LinkedIn Groups from Promoter to Detractor. I definitely would not recommend them, including my own group.

On a more positive note, I am running a free one-hour webinar on NPS for the European arm of the Association of Field Service Managers this Thursday afternoon my time, so you should have heard about it if you are an AFSMI member.

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.

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.
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