NPS

#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)

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.

 

ACSI-NPS 800

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

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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… the question I asked two years ago is whether it would be better than nothing to design a method of converting an ACSI score into an NPS number. The graph above shows the mathematical relationship between the two numbers. There is some research that supports this approach. And of course, any results are only as good as the sources of the data.

Temkin and ACSI data

Bruce Temkin publishes NPS benchmarks. You have to pay to have the full database. However, the summary by industry is free. The American Customer Satisfaction Index people publish satisfaction benchmarks for hundreds of large US companies that sell to consumers. Access is free, and they also summarize the data by industry sector. So, I took both sets of industry results from 2015 to 2018 and mapped them against each other. It gives the graph at the top of this article. You can see the equation of the trend line too.

Research results that support this approach

The ACSI number is a composite metric based on the answers to three questions in the ACSI survey. A Net Promoter Score is based on the answer a single question, “How likely are you to recommend X to a colleague or friend?” Keiningham, Cooil, Andreassen and Aksoy wrote a paper critical of NPS back in 2007. You can find it here. Among other arguments they show that both ACSI and NPS have similar ability to predict a company’s revenue trends. (Reichheld has never said otherwise. His claim has always been that the recommendation question is the best single-question revenue predictor for most industries.) Since their revenue prediction ability seems to be similar it therefore seems reasonable to expect a conversion equation to be at least somewhat accurate.

Examples

Chick-fil-A has a 2017 ACSI score of 87. Applying the y = 1.4781x – 84.59 equation means they have an approximate NPS of 44. Facebook has an ACSI score of 67. That translates to an approximate NPS of 14.

Conclusion

Is this useful? If you think at least the principle is useful, I would welcome any knowledge you may have about public sources of competitive benchmark NPS data. One important point here is that we need competitive benchmarks, meaning a set of NPS results for multiple companies that has been developed using a single method for all companies covered. This excludes self-announced results for a single company. At the moment, the only defect I see in my current method is that Temkin and ACSI cover an overlapping but different set of companies in each industry.

Please let me know what you think.

Maurice

#94 – Happy Birthday to us!

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Happy second book birthday. Reverse engineering customer strategy. Welcome to the 94th edition of my customer strategy newsletter. The five topics this week are:

  1. Our books came out two years ago – Happy Birthday to us!
  2. Is it possible to reverse engineer customer strategy for speed?
  3. Latest blog posts
  4. Notable items from other sites – Joshua Rossman podcast, Borderick / Micro Focus
  5. Looking forward

Our books came out two years ago – Happy Birthday to us!

Peter’s son and therefore my nephew Donovan created this animated GIF to help with the celebrations.

It has been a highly satisfying two years for both of us. The books continue to sell well and your feedback has allowed us to update them to improve clarity and add new information over time. And of course people continue to spot the occasional typo, though it has been almost three months since the last typo report. Thank you for your support over this time, and thank you for the kind reviews on Amazon. If you have any of the books and have not written a review, please help us by doing so, no matter what you thought of what you read.

So, are we going to write another book or two? Well… maybe. I have written about 20,000 words on the concepts behind reverse engineering customer experience strategy development to speed it all up. I am not sure my thinking is coherent enough yet, so have been somewhat slow to write the remaining 20 to 30,000 words. Discussions with some of you are helping things along. See below.

Is it possible to reverse engineer customer strategy for speed?

I continue to be frustrated by the number of customer experience programs I see that make no difference whatsoever. This happens primarily because of focus on metrics rather than improvement projects. In the last week I have come across yet another company that sends out loads of customer surveys and does absolutely nothing with the results, not even calling back the Detractors.

If your company does not care enough to plan on people and money for customer experience improvements… well… you should probably find another job.

To take the discussion a bit further I have created a flow chart and used it as the basis for a blog. I also posted it on Medium and LinkedIn. I have already received feedback that it is somewhat simplistic, and I have to say I take that as a compliment. Anyway, the link to the blog post at the top of the blog list below, so you can make up your own mind.

Our latest blog posts

Older posts are still available on the blog page.

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…
image Here is why the European Commission fined Google $2.7B and $1.7B, and how it could all have been avoided

Quite a lot has been written about the $2.7 billion fine levied on Google in the case about comparison shopping sites and on the new find related to AdSense. Much of what has been written is simply wrong.…

Notable customer experience items from other sites

Net Promoter System podcast with McAfee’s Joshua Rossman

I can’t say I agree with everything Joshua says in this podcast. Maybe that is why I found it to be quite compelling listening. Joshua managed customer experience for eBay before moving to McAfee software. I have to say that some of what I heard in the podcast was probably necessary for Joshua to have a program that the senior leaders liked. I still find it far more complex than I think it needs to be.

See what you think here.

Dr James Borderick: The Micro Focus Experience Approach

What can I say? I continue to follow what members of my former Autonomy/HP/HPE and other teams are doing. Here are some short and sweet thoughts from Jamie while attending the Qualtrics event.

Read it here.

Looking forward

I suppose I need to decide whether to devote a lot of time to completing another book, this time about reverse engineering customer strategy design to speed up implementation. Your input 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. 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.

#93 – Complaints management, ‘NPS is dead’ blog, Amsterdam video

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Make it easy for customers to complain. Reactions to my ‘NPS is dead’ blog post. Welcome to the 93rd edition of my customer strategy newsletter. The five topics this week are:

  1. A complaints team is one of the first things you should implement
  2. Reactions to my ‘Is NPS Dead?’ blog post last week
  3. Latest blog posts
  4. Notable items from other sites – My Amsterdam video, Ian Golding
  5. Looking forward

A complaints team is one of the first things you should implement

One of the challenges faced by new customer experience leaders is how to establish short-term credibility. You may have been placed in your new job because of your compelling mid-term vision, or the vision of your senior leadership.

None of that will count for anything if you are not seen to me making progress during your first few months. One of the easier things to implement quickly, if you do not already have it, is a customer complaints process and potentially a customer complaints team.

It is a good idea to have a single customer complaints team for your entire organization. The phone and email contact details for complaints should be visible at the top level of your company website. “Log a complaint” is a reasonably clear heading. If this sounds too scary, consider putting that link on various intranet pages so that your own people can log customer complaints that they are not able to deal with on their own.

The person or people handling complaints should accept complaints from both internal and external sources. It is difficult for complaints team members to be effective if they are new to the company. The ideal profile is a relatively experienced company veteran who understands the organization and can get things done quickly. A single person could do this on a part-time basis in a small company. A team is needed for a large organization. When I managed this for HP, covering consumer and enterprise business, there were over 100 people in the complaints team in Europe alone. We had 350,000 employees in the whole company at the time. The range of work was quite extreme, even including representing the company in small claims courts when people went there to get satisfaction on a printer or PC problem.

The complaints team, and perhaps your full organization, should have the authority to spend a certain amount of money to resolve complaints immediately, without further approval. That amount should be something between $1,000 and $10,000. In HP, the Swiss complaints team could leave the office, go to a local electronics store, buy a product and drive it to the customer’s home near Zurich, if that was appropriate. Flowers and other small gifts are a good way of apologizing when you make mistakes or a product is defective. Think about this when you are trying to turn around detractors. Note in passing that most countries have rules prohibiting gifts to government employees, so your processes need to take this into account.

Complaints. A great way of engaging the whole organization. And a great way to get and publicize compelling customer stories that will motivate the entire company.

I would love to hear about your own experience in this area.

Reactions to my ‘Is NPS Dead?’ blog post last week

I sent the blog post to subscribers to this newsletter last week as I thought it might gain some attention. It certainly did. I posted it on our own site, on LinkedIn, on Medium and in the private forum of the Customer Experience Professionals Association. It is the second-most-read article I have ever posted on LinkedIn. I received a lot of private and public messages of support for what I wrote. The nature of these messages made me do multiple edits and additions to the article on all four sites. Newsletter subscribers will not have seen the updates unless you have visited one of the four sites.

I also received a small number of quite emotional messages suggesting that I have been brainwashed by Bain and others into accepting a totally useless concept unsupported by science. I did my best to respond politely to all such messages. The surprise to me was that most of the points made in these messages were the same as the ones I addressed in the article. I found that somewhat hard to deal with without getting angry. Yes, I realize that ‘communication is something that happens at the receiving end’ and the repetition of the same points may just mean that I did not express myself clearly enough the first time.

The two main points that came back in the negative messages were:

  • ‘My favorite compound metric predicts revenue or market share better than NPS.’ Once again, nobody denies that many compound metrics are better predictors than NPS. They are all simply harder than NPS to communicate and implement.
  • ‘NPS has not been backed up by any academic research published in peer-reviewed journals.’ As that is not true, I added a paragraph and link to such research in the article and reinforced my messaging that contrarian positions published in peer-reviewed journals did not have science behind them and should not have been published. To say the least, I got additional emotional reactions to those statements.

Once again, I want to state that no metric tells you what you need to do. You have to ask customers why they gave you the score and what you should improve. The answers to these questions will often tell you things you cannot see in your operational metrics. This in turn gives you a basis for your improvement projects.

Thank you for your feedback on this so far.

 

Our latest blog posts

Older posts are still available on the blog page.

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…
image Here is why the European Commission fined Google $2.7B and $1.7B, and how it could all have been avoided

Quite a lot has been written about the $2.7 billion fine levied on Google in the case about comparison shopping sites and on the new find related to AdSense. Much of what has been written is simply wrong.…
image Answers to two questions from new Customer Experience leaders: Where do I start, and to whom should I report?

I attended and spoke at the CustomerGauge Monetize! event in central Amsterdam last week. It was fabulous event, held in a theatre that has been created in an old church. Here are the answers to the two most common questions I was asked during breaks…

Notable customer experience items from other sites

My presentation from Monetize! Amsterdam

As regular readers know, I was on stage in Amsterdam a few weeks ago and was voted top presenter overall at the event. The organizers filmed all presentations and a link to mine is below. I hope you find it entertaining. And of course, if you want me to do something like this for your team or event, please reach out.

My performance is here.

An interview with Ian Golding: The Strategy of CX

Why have just one video this week. Here is a second one. Ian is considered one of the top global CX gurus. From their site: “In this interview, Ian – who also leads the CX Professional Masterclass and CCXP Exam Workshop – outlines the work of CX professionals, how companies test their CX offering, how organizations can change and improve to become more customer-centric, and more.”

Watch the 11-minute video here.

Looking forward

I will cover the second anniversary of the publication of our books next time.

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 is dead - Long live NPS

Is the Net Promoter Score (NPS) dead?

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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. So… is the Net Promoter Score dead? Here are the views of two important people:

Mark Twain quoteAnd of course this well-known quote:

 

Cervantes internetFor reasons I won’t go into at the moment I have had to research what those who do not support NPS have been writing over the years. Here are some of the objections I know about and what I think of each. If you have others in mind, let me know and I will provide my perspective.

‘Compound metrics’ are better predictors of revenue and market share trends than NPS’

Yes, this is true in many cases. It is possible to design and implement more sophisticated measurements that are better predictors and a number of them exist. Reichheld and Markey have never claimed otherwise. Reichheld’s original contention was simply that the recommendation question was the best single-question predictor among those studied, for the majority of industries. The issue with compound metrics and the reason none have ever caught on is that they are extraordinarily difficult to explain. And because they are not common, every single communication about the results has to start with an explanation of how the metric works. Too boring. Audiences go to sleep, no matter what the value of the sophisticated metric is.

The recommendation question is not always the best or most predictive single question to ask

Yes, that is true and Reichheld says so in his 2003 HBR paper. Indeed, he refers extensively to Enterprise Rent-A-Car in his paper and the question they ultimately used and that turned out to be a great predictor for them was ‘Please rate your overall satisfaction with your rental’. When eBay implemented NPS their target customers were people making their living selling things on eBay. The found that when they asked the recommendation question they got answers like “No, I am never going to recommend to a friend that they should compete with me on eBay.” So they implemented “How likely are you to continue selling on eBay?’ and continue to use that question to this day.

Lots of other things affect growth more than NPS

That is certainly true in some industries. Overall, Bain and my own research suggest that NPS scores predict between 20% and 60% of revenue / market share trends, depending on the company. There are clearly industries where external factors drive 100% of the revenue and customer satisfaction will drive market share only. Take gold sales. Revenue depends on the price of gold. Market share will partly depend on how customers feel about you compared to your competitors. Where there are monopoly providers of essential resources like electricity, customer sat has no effect on revenue, as should be obvious. You can the relevant information from Reichheld and Markey here.

NPS is easy to game

Yes, that is true, and the same is true of every other metric like CSAT or Customer Effort Score. Here is a blog I wrote about how to cheat a couple of years ago. https://customerstrategy.net/gaming-survey-results/

Companies publish fantasy numbers as their NPS numbers in their annual reports

I wish that were not true, but it is. The only number they should publish is a double-blind competitive NPS benchmark score. Some companies choose to publish numbers that correspond to some positively-perceived subset of their business such as a support desk that only a minor proportion of their customers actually use. Again, the same self-measurement phenomenon could happen with CSAT or other metrics.

NPS is not a good predictor of revenue

While I will go into specific papers about the topic below, I want to make a few general points first. Not all NPS numbers are equal. The only scores that are consistent and reliable predictors of revenue and market share trends are double-blind competitive NPS benchmark trends. Double-blind means that the people answering the feedback requests do not know who is funding it. Ideally the people analyzing the feedback don’t know either, though this second ‘blinding’ may be tricky to achieve. If, for example, the only NPS numbers you have are feedback from a support desk survey, you should not expect it to predict revenue or market share at all unless yours is simply a support desk business. And of course if your numbers improve but your main competitor’s numbers trend is even better, you will lose market share. I emphasize share rather than revenue because some industries are in decline. If your score is better than your competitors’ scores you may simply decline more slowly in that industry.

We did deep research on this while I was at HP and I have posted the top-level results of the relationships we found between relative NPS trends and revenue in various places. Since then, Dr. James Borderick of Micro Focus has done even deeper research on the subject across more than 30 global software vendors and once again proven the strong relationship between NPS and market share trends. I don’t know exactly what level of detail he has been allowed to publish as his work does of course include some confidential company data.

An often-cited quote from Fred Reichheld about his own research

There is an often-cited quote from Fred Reichheld stating “A number of perspicacious readers have noted that the statistical evidence provided in my book The Ultimate Question is imperfect. It does not provide proof of a causal connection between NPS and growth. Nor are some of the timeframes ideal.”: This quote comes from one of his own blog posts (here) and has been used by a number of people to ‘prove’ that Fred felt his own research was defective. The quote is horribly out of context. Here is what he says immediately afterwards and which proves he believes his research was entirely legitimate. “When the manuscript was completed in mid-2005, that data, imperfect as it was, represented the best available information: 8 quarters of NPS and annual organic revenue growth rates for competitors in a dozen or so industries. Today, this database has grown enormously. Bain has conducted additional research in scores of industries around the world, gathering NPS data and apples-to-apples revenue-growth statistics for individual competitors. Bain teams consistently find that NPS explains the majority of variation in organic growth rates across an industry over many time periods. More importantly, we have found that individual customer responses to the ultimate question predict those customers’ subsequent behaviors across the multiple drivers of profitable growth: repurchase rates, margins, cross-sell, retention, referrals, etc. Many companies, including GE, Intuit, eBay, American Express, and others have seen similar results.”

Proof of the relationship between NPS trends and revenue / market share trends has never been published in a peer-reviewed journal

Not true at all. For example, here is one that Andrew Stephenson, Jana Fiserova, Geoff Pugh, and Chris Dimos had accepted for the British Academy of Management annual conference proceedings. It actually won best paper at their 2018 event. The data is from the UK-based multinational furniture retailer that has over $1B in annual revenue. It is quite a ‘deep’ read. To me, the essential point is their choice of using feedback gathered six months after purchase. This seems like a great way of getting a pure brand-level NPS number. I would like to invite you to take the time it takes to read it, if you are at all interested in the subject. You will see that the relationship between NPS and revenue is established in a quite compelling way. The paper is here. (This should open with a completed search for the name Stephenson, and you can download the paper directly from the search result.)

Keiningham et al. paper ‘A Longitudinal Examination of Net Promoter and Firm Revenue Growth’ – Journal of Marketing vol 71, July 2007

Let me try to be polite about this. It is a disgraceful failure of the peer review system that this article could have been published in the form it was published. Here is a link. While there are a number of issues, the main thing that should have disqualified it from publication is on page 43. During the second of the three years studied the price of a barrel of oil dropped 30%. This is a great example of an industry where you would not expect any customer experience metric to have predictive value for revenue. The only factor that matters is the price of oil. This is so blindingly obvious that I can only believe that it was included in a deliberate attempt to deceive readers. The other half of the same page proves the opposite, meaning a strong positive relationship between NPS trends and revenue / market share for banking. Without the gas station example, the overall conclusion of the paper does not stand up.

However, that was not enough for the authors. They added to the what I feel is the deception with an extensive comparison between NPS and ACSI as revenue predictors, proudly showing that ACSI was at least as good a predictor and thereby ‘proving’ that the recommendation question is not the best single-question revenue predictor. However, they knew that ACSI is not the response to a single question. It is a weighted average of the answers to three different questions so is a compound metric (see above). Keiningham knows about my objection and rejects it as it has not been published in a peer-reviewed journal. He does not deny the facts I set out.

Morgan and Rego paper ‘The Value of Different Customer Satisfaction and Loyalty Metrics in Predicting Business Performance’ – Marketing Science Sep-Oct 2006

In the abstract and full paper the authors write things like “metrics based on recommendation intentions (net promoters) and behavior (average number of recommendations) have little or no predictive value.” Unfortunately, this is another, perhaps even more disgraceful, failure of the peer-review process. Morgan and Rego did not study the recommendation question at all!  The paper should never have been published as written. They used the answers to two other questions and then state that they are equivalent to the recommendation question. Here is what is on page 429 of the article: “We utilize ACSI data concerning consumer responses to the questions “Have you discussed your experiences with [brand or company x] with anyone?” and “Have you formally or informally complained about your experiences with [brand or company x]?” I suppose they felt compelled to write something about NPS, had no data at all, and so invented something deliberately deceptive that supported the conclusion they wanted to make.

There are a number of other papers published in various magazines and journals that pick on particular aspects of NPS or specific industries. I have one that covers just two industries, one of which is PC manufacturing. Reichheld said they had found no relationship between IT manufacturing and the recommendation question in his HBR paper, so the ‘finding’ is hardly surprising. Note that for the HBR paper end users of IT were asked, rather than the corporate purchasing decision-makers, so it is really not a surprise that there was no relationship with revenue trends.

I suppose you can tell I feel strongly about some of these objections while considering others to be valid. If you have more that you would like me to examine, please feel free.

 

More of this sort of thinking in our books. They are all available in paperback and Kindle formats from Amazon stores worldwide.

 

 

#91 – Critical difference in B2B vs. B2C feedback, Speaking experience in Amsterdam

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Differences in the way B2B and B2C customers answer open questions. Speaking experience at CustomerGauge event in Amsterdam. Welcome to the 91st edition of my customer strategy newsletter. The five topics this week are:

  1. Unexpected (to me) difference between B2B and B2C customer feedback
  2. My recent speaking experience in Amsterdam
  3. Latest blog posts – Answers to CX leadership questions, employee/customer happiness
  4. Notable items from other sites – Annette Franz and Rosaria Cirillo Louwman
  5. Looking forward

Unexpected (to me) difference between B2B and B2C feedback

While working at HP my experience was that NPS Promoters write the longest answers to open questions. My operating assumption is that such customers like you and want you to continue to improve, so they do their best to help. Rob Markey confirms that this is what they see with Bain clients too. However, all of this is for business-to-business customers.

Since retiring from HP, I have been exposed to the situation at a number of B2C companies. I have seen data that shows the opposite pattern. Detractors write the most. In one large data set, Promoters used about 8 words to answer the ‘Why?’ question after the NPS rating, while Detractors used twice that, with Passives half way between. It may interest you to know that it made less than half a word difference for Promoters when people answered on their phones. Single-word responses from Promoters were quite common in all cases. “Great!”, for example. It would have been nice to know what exactly was great.

Since the data sets I have looked at are for companies without annual contracts I suspect this may just be true for companies that have a purely transactional relationship with their customers. Unfortunately, none of these data sets came from research that included the standard ‘What could we do better?’ question, so I don’t know whether the same would be true there.

Your views would be most welcome.

My recent speaking experience in Amsterdam

I spoke at the CustomerGauge Monetize! event in Amsterdam two weeks ago. What a great experience! The event was held in a theatre that has been created inside an old church. The lighting was great, and the general atmosphere was wonderful. Customer Experience work has advanced quite a lot in the last few years. It was great to see leaders from DHL, Electrolux, Salesforce and other companies present their achievements and concerns.

As is often the case, half of what I learned came from discussions during breaks and during the evening between the two days. Fascinating stuff. One of the blog posts in the list below covers my answers to the two most common questions I was asked during these informal interactions.

My main stage presentation was based on two different blogs that you may remember. The first is my ‘Valentine’s Day’ blog about the similarities in the relationships couples and companies have. The second is my recent work on using stories and emotions to communicate effectively. And I just received the preliminary results of the feedback request sent to all participants. My session was the top rated one on the first day. I have not seen the results for the second day, and don’t expect an overall ranking to be published. Anyway… Yay me! (And thank you to all the attendees.)

Congratulations to Camilla Scholten, Adam Dorrell, Sarah Frazier, Katerina Sinitskaia, Cvetilena Gocheva and the rest of the CustomerGauge team on a great event.

Our latest blog posts

Older posts are still available on the blog page.

image Answers to two questions from new Customer Experience leaders: Where do I start, and to whom should I report?

I attended and spoke at the CustomerGauge Monetize! event in central Amsterdam last week. It was fabulous event, held in a theatre that has been created in an old church. Here are the answers to the two most common questions I was asked during breaks…
image The best and worst of customer and employee satisfaction (Part two in a two-part series)

And here is today’s Fake News (though the quotes are real): “Our core values: … Put the customer first…” – Frontier Communications website… In reality there are many companies that customers hate though employees love them, and vice-versa. Here are the results of my research on the topic…
image Do happy employees bring you happy customers? (Answer: In general – No!)

“Everybody knows that happy employees make happy customers.” “Satisfied employees are the single most important driver of customer satisfaction.” In reality, I don’t believe employee satisfaction even makes the top three for most companies. There are exceptions. I recently completed my third annual study on the (non-) relationship between employee and customer satisfaction…

Notable customer experience items from other sites

Annette Franz – Putting the customer at the center of every conversation

While this memorable article just came up in my LinkedIn feed yesterday Annette actually wrote it on her ‘CX Journey’ site back in 2002. It includes a mention of my ‘favorite hate’ in customer experience work. As she puts it, “I think hearing requires a subsequent action or reaction. And in the customer conversation, that part is often missing.” Annette goes on to suggest that only 5% of companies tell customers what they have learned from their research and what they are going to improve.

I think Annette is an optimist. In my own experiments in which I provided a total of 150 B2C companies with feedback, just a single one wrote back to tell me what they had learned and what they were going to improve. (Just FYI, that company was British Airways, which may surprise you. It surprised me as I have probably sent them about 20 survey responses over the years. At least they closed the loop that one time.)

Read this classic blog post here.

Rosaria Cirillo Louwman / Wow Now

I was able to meet Rosaria for the second time on the afternoon before the CustomerGauge event in Amsterdam. I first met her a few years ago when I spoke at a Satmetrix event in London. It was great to catch up, especially to discuss Yellow Goldfish, the recently-published book she has written together with Stan Phelps.

Rosaria founded Wow Now back in 2013. Her focus is not customer satisfaction or customer experience. I think it would be safe to describe it as happiness, meaning happiness of everyone involved in customer interactions, especially the customers, of course. Her framework builds a new layer on top of the well-known Maslow motivation pyramid: Happiness. She describes her focus as ‘happiness driven growth’ and has invented the Happiness Contribution™ Factor.

Read more about Rosaria’s book, training courses and Wow Now here. And you should be able to find the link to download her Happiness-Driven Growth booklet quite easily.

Looking forward

April will bring the second birthday of our first three books. My co-author/brother’s son is preparing a special birthday animation that you will see a few weeks from now. Thank you for your support during these two years. We are happy with the way the book has been selling, and especially the way they continue to sell well, even two years later. The CX strategy and NPS books occasionally make it up into the top 2% of all Amazon book sales. The cost-reduction book does not do quite as well. I suspect we need another economic downturn to make it more relevant.

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.

#89 – Employee and customer sat, Consumer subscription service feedback

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Welcome to the 89th edition of my customer strategy newsletter. The five topics this week are:

  1. Relationship between employee and customer satisfaction
  2. The right time to ask for feedback on a consumer subscription service
  3. Latest blog posts
  4. Notable items from other sites – Willie Pietersen, Eric Smuda ex-Compaq, HP, Avis, Hertz
  5. Looking forward

Relationship between employee and customer satisfaction

The American Customer Satisfaction Index people released the final part of their 2018 customer satisfaction data earlier this week. I have been able to match the scores against Glassdoor employee satisfaction data for 398 large businesses that sell to US consumers. This is up from 345 last year and hopefully makes the data more reliable.

There are a few surprises, though the overall message has not changed: there is not much of a relationship between employee and customer satisfaction. Variations in employee satisfaction across the 398 businesses explain just 6.2% of the variations in customer satisfaction. This is up from last year’s number of 4.4%. There are industries and indeed a whole sector where there seems to be no relationship at all between the two. The big surprise is that the relationship for the retail trade has dropped significantly. This turns out to be an artefact of the ACSI including eCommerce sites in retail this year while they were separate last year.

At the moment I am doing extensive data validation. This is the third time I have carried out the study. I made minor mistakes each of the first two times and am in the process of ensuring I have at least not made the same mistakes again. I will then write a series of blog posts. The ones you should expect are:

  • Overall results, including an analysis of ‘high-touch’ and ‘low-touch’ businesses.
  • Lists of companies that employees hate but customers love, and vice-versa.
  • Lists of companies that both the employees and customers love, and of course the opposite view.

Based on the feedback I receive each year I suspect most of you believe my study is wrong. Indeed, I submitted it to one academic publication and one business publication the first year and it was rejected by both as not being credible. Nobody, and I mean absolutely nobody, has been able to present a scientific analysis that proves anything different. I look forward to the feedback this year.

The right time to ask for feedback on a consumer subscription service

I just answered a question about when you should ask customers for feedback about a ‘box subscription’ service. This is the type of service where you receive something different every month. Kiwico is an example, with their scientific toy kit subscription service, and I have seen subscriptions that give you a new book every month. Here is how I answered the question:

  1. If you have no people or budget to work on improvements that customers may suggest… well… you are better off not asking them for feedback at all. So, if you have no resources, the right time is never.
  2. You want to be able to work on improvements and tell the customers about them before their subscription deadline comes up. If all customers do not have the same renewal date, this really means working on a single improvement every quarter, then telling the customers when you have completed it. Once again, if you don’t have the resources needed, then please don’t ask for feedback.

Your input welcome.

 

Our latest blog posts

Nothing new this week as I have had my head down working on the employee-customer satisfaction research. Older posts are still available on the blog page.

image Valentine’s Day classic blog – How to stay married – to your customers of course!

It was Valentine’s Day a few years ago, and I was puzzled by the results of some HP customer experience research. The data source and volume were impeccable. However, the results were surprising. Then I remembered what day it was, and everything became clear…
What skills do you and your customer experience team need to be successful? (5-minute read)

While pure luck was a major factor, my use of Microsoft Project version 1.0 on my personal Mac certainly had a major positive influence on my promotion to the European HQ of Digital Equipment Corporation…
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 Customer Experience Professionals Association forum. Some clarity seems to be needed…

Notable customer experience items from other sites

Willie Pietersen – Five time-tested ideas for success

Many of you know that I consider Willie Pietersen to be the greatest strategy teacher on the planet. As a former CEO of some major companies, his advice is intensely practical. His latest blog post is no exception. The five concepts covered are easy to understand. They are:

  1. Our only sustainable competitive advantage is our ability to learn faster than our competitors
  2. Success means putting the customer at the center of business decisions
  3. Strategy is about achieving differentiation by making choices
  4. Leaders must be able to simplify a complex world
  5. To move people at the deepest level, you need compelling stories

Willie’s first strategy book is the only book I have ever read a second time immediately after finishing my first read. I did the same with this blog post. Read it here.

Bain NPS podcast – Interview with Eric Smuda, former CX leader at Compaq, HP, Avis, Hertz

A fascinating and insightful interview with Eric Smuda. My time in CX at HP started after Eric left and I never heard of him at Compaq. I wish I had. He is clear and insightful about what it takes to develop and implement a customer experience strategy. I learned a lot about the car rental business and found some of the stories fascinating. Like the one about the need to reposition cars around New York. Hertz uses a single car fleet. The weekday demand is at the airports. The largest single weekend demand is from people who live in Manhattan and want to get away for the weekend, starting on Friday evening. So Hertz drives huge numbers of cars from the airports into town. It is a constant stream as there is not much space for them in Manhattan. That’s just one story and there are many others. Listen to them here.

 

Looking forward

I will be speaking at the CustomerGauge Monetize! event in Amsterdam on March 13th and will stay over to enjoy the other speakers on the 14th. I look forward to meeting any readers who will be there. And of course I want to complete my blog posts on the relationship between customer and employee experience. I am sure you will find them interesting.

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)

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

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