Customer Satisfaction

BA NPS for blog header 800

NPS (20) – How not to do customer research – 20th article in the series on NPS

/ , , , / , , , , , , , /

While I am sure it is not their intent, the way British Airways surveys both its general and special customers is the worst I have ever seen from any company, from a customer perspective. Perhaps paradoxically, it is one of the richest possible from an internal British Airways perspective. It provides them with a rich set of reports and metrics. While it includes part of the Net Promoter System, it has far too many screens and questions. They have never contacted me about my issues or improvement suggestions. What follows is a critique that includes screen captures from their September 2016 Executive Club survey. Please bear in mind that I am not entirely negative about it all. I just feel it works from an old paradigm, is internally focused, and designed primarily to fit customer experience strategy and reporting software supplied by KPMG Nunwood.

Summary

While the covering email from Nunwood says the survey will take 15 minutes, there are 134 screens to go through, and it is hard to see how it could be done in 15 minutes. The survey invitation is signed by James Hiller, with no job title. A Google search indicates he manages the Executive Club. Nothing is said about what they have improved based on past surveys.

As distinct from a pure survey about the Executive Club itself, competitors are also covered, as are BA and competing airlines. The huge amount of data collected probably fits a comprehensive internal reporting structure, and provides no particular value to customers. It violates the fundamental principle of customer research in that it fails to provide more value than it extracts. Here is how it starts:

Cher Monsieur Fitzgerald,

Given that you are an Executive Club Member, we would welcome your views on your experiences with British Airways and we would like to understand how they have influenced the way you feel about us.

Whether positive, neutral, or negative, your feedback is welcome and highly valued, as it will help us to shape our products and services in the future, and understand what our most valuable customers need from us.

The survey will take about 15 minutes to complete.

Will I be able to provide the input I want to provide?

Before starting to work through the many screens, I decided what I wanted to say. I wanted to make three points:

  1. Transiting through Heathrow Terminal 5 for long-haul travel from Geneva is far more complex than transiting via Zurich, Munich, Frankfurt, Amsterdam and even Paris. This is because passengers have to go through a pointless duplicate security check inbound from the USA / Canada, and a pointless duplicate outbound check when arriving from countries that use the same security standards as the UK. While I did not know this at the time I filled out the survey, the UK Civil Aviation Authority requires this second check and does not accept screening done anywhere else. I suppose this may date from an era when it was too difficult to separate the ‘clean’ and ‘not quite so clean’ transit passengers from each other. Whatever the reasoning, it seems pointless today. The layout of Terminal 5 could easily be modified to create this separation should the law change. BA should apply the necessary pressure, in my opinion.
  2. It is next to impossible to use the Executive Club website to reserve some long-haul destinations using miles. Entire months have no availability. I am not talking about high-demand routes like Christmas in Australia. My latest experience with trying to reserve Australian flights in Business Class was for October, seven weeks in advance, and there were no flights on any date, either to Sydney or Melbourne. December and January show no availability either, which is less surprising. During a Christmas vacation, I looked at availability for South Africa the following Christmas. Nothing.
  3. I wanted the opportunity not just to complain, but also to make improvement suggestions. Among the suggestions, I wanted to be able to mention that BA should tell us what they are doing with the input, and should contact people who make suggestions.

The short answer is that I was indeed able to provide the input. The more complete answer is that I was forced to bury this critical information inside many unimportant and irrelevant (to me) answers. I am sure the 100+ irrelevant answers correspond to the way some staff inside British Airways are measured.

The start

I expected BA to provide a choice of languages for the survey, and they do. I suppose it is a bit surprising that Spanish is not among the languages. It is the second-most common first language in the world with about 400 million speakers, after Chinese, with 1.2 billion.

NPS questions

The recommendation question is next as shown below. Oddly the ‘overall satisfaction’ question is asked as well. After a question about emotions, the NPS “Why?” question is asked.

Logically, the following question should be about what BA should improve. That question is never asked about British Airways, though it is asked about the Executive Club, close to the end of the survey. When you do not ask for improvement suggestions, you tend not to get any from Promoters. Remember that Promoters are the customers who admire you most, and want you to succeed. They tend to provide the most valuable improvement suggestions.

BA executive club survey 1

Lots more questions

Questions about my feelings about the airline follow. I suppose these provide overall statistics and somebody is measured on the trend. It is hard to see how someone would work directly on improvements from the answers, as there is no opportunity to explain the input. The questions all use rating scales and include:

  • How likely would you be to travel with British Airways in the future?
  • To what extent do you consider British Airways a convenient option when choosing an airline to fly with?
  • Taking everything into consideration, overall how satisfied are you with British Airways?
  • How satisfied are you with the value for money British Airways offers?
  • How would you say you feel about British Airways?

Information about competitors

A useful section follows as shown below. After asking what airlines I have used for long- and short-haul travel in the last 12 months, the survey goes on to ask which airlines are my top choices for such travel. It then asks why the first-choice airline is in first place. I consider this section to be the only thing that is potentially useful beyond the basic NPS questions.

BA executive club survey 2

Oddly, they sort of throw this away by asking you to choose from a list of possible responses for not flying with BA. None of the preselected reasons was my main one, so I filled in the Other box. I feel they should have asked this as an open text question.

Then you are asked again about your overall satisfaction with BA. You can’t see the answers to prior questions and my second answer to the same question was one category lower than the first. Maybe because the survey was making my opinion more negative. The wording of the question was not exactly the same as the first one, though I don’t recognize them as different questions.

Lots of rating questions

A seven-point scale is then used to gather answers on flying touchpoints, emotions associated with BA and opinions about their communication. Finally, the section on the Executive Club starts, at last. Remember that the email invitation came from the head of the Executive Club, not the head of British Airways. Overall satisfaction and recommendation questions are followed by another extensive batch of seven-point rating scales Each rating question is presented individually, and you can review your answers to each section, possibly making changes.

Finally finally

A breath of hope is provided by the question “And finally, thinking about your experiences of any frequent flyer programmes, how could British Airways Executive Club be improved?” I mistakenly thought this was the last question. Unfortunately, I was then asked seven questions about demographic information that BA should already have in my Executive Club profile. This is one of the disadvantages of subcontracting surveys. The confidentiality agreement you have with your customers probably forbids you passing their details to a third party. However, the way BA has handled this with Nunwood is not optimal. Since they already had my name, there would be no reason not to provide them with a unique code, that would then allow BA to match my name and demographic details with their own database. The name on its own might be a duplicate.

Speculation and conclusion

I recommend a visit to the KPMG Nunwood website at www.nunwood.com. Their offers include customer experience strategy, journey mapping, NPS support and other comprehensive approaches to improvement. One of the approaches, the ‘Six Pillars’ explains their satisfaction surveys. The excessive number of questions satisfies the needs of the Six Pillars model, and fully exploits their Fizz reporting software.

I speculate that the survey and software are part of a larger consulting engagement with British Airways that requires a ‘slice and dice’ approach to data for distribution to a variety of internal departments. I feel this is an internally-focused way of proceeding. I would love to know what their response rates are, and speculate that they are under 10% overall. I suppose that higher-status members will be more likely to give feedback, and their input is critical, since they generate the most revenue for the company. I believe an interesting opportunity would be lower-status members who have higher status on other airlines. My recommendation for BA is an A/B split test, asking just the basic few NPS questions as a ‘pulse’ survey in between the main ones. I believe they would get better response rates and clearer actions to prioritize. Of course, they would lose the ‘slice-and-dice’ metrics they probably use to measure people. And finally, I have of course lost all my status and privileges with BA since retiring, so don’t know whether they have changed the way they survey Executive Club members since then. Please feel free to reply below if you have new information.

 

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.

 

Customer Lifetime Value

NPS (19) – How to calculate the lifetime value of a customer – 19th article in the series on NPS

/ , , , / , , , , , , /

While you can find many methods of doing the calculation on the web, there is only one correct answer. The value of a customer to your company is the total cash flow they generate for you over their entire lifetime. The single calculation method for this is Discounted Cash Flow; the Net Present Value of all cash flows out into the future. No other method is correct, though there are some acceptable approximations. The theory and experience of NPS practitioners is that the operating profit per customer is highest for Promoters and lowest for Detractors. Do not confuse revenue and operating profit. You can have customers that generate lots of revenue, but even more cost. They have negative lifetime cash flow, unless you can turn them around.

The main problem you will face

Unfortunately, most companies are not able to calculate profitability by customer. Financial reporting usually works by product line, not by customer. Asking your finance person to provide you an accurate cash flow from each of your top 100 customers individually will probably be a waste of time. Businesses that depend on large contracts are an exception, and you may well be able to calculate the cash flow from each contract.

Suggested method

In the absence of accurate standard reporting, a good starting point is to work with your finance person to calculate a ‘proxy P&L’ for each of your different customer categories. Unfortunately, there are accepted accounting standards for many things, but not for the precise methods used to calculate the lifetime value of a customer. Segmenting customers in a useful way is a critical step. The first distinction to be made is between customers who have an ongoing contractual relationship with your company, and those who buy things, but have no contractual relationship. The former category is easy to work with. Past contract renewal rates can be used to determine future expectations. Direct Marketing principles need to be applied to the latter category. Direct Marketers think in terms of ‘RFM’: Recency, Frequency, and Monetary value.

Other customer segmentations that are useful will depend on your business model. If you sell both direct and via resellers, lifetime value expectations will be different. They will also differ between very large customers who depend on your company to run their business, and others. If you have the data, NPS categories can be used to refine renewal rate expectations. Here are examples of what needs to be used in the calculation:

  • List prices.
  • Contra-revenue, meaning discounts you give from the list price. While large customers tend to attract higher ‘standard’ discounts, you will generally have easier discount negotiations with Promoters than with Detractors. Since contra-revenue is not part of any standard P&L, it is often forgotten.
  • Net revenue, meaning list price less contra-revenue.
  • Cost of Goods Sold. This includes costs of ‘free’ replacement items and additional merchandise that you may have to supply Detractors to help turn them around. If you have a dedicated escalations team, you can easily calculate the average cost per escalation and use that to assign a total escalation labor cost. While ‘Cost of Goods Sold’ sounds like it should include the cost of selling and marketing, it does not. Selling, General and Administrative costs are ‘below the line’, which means they are not counted in the Gross Margin calculation, but are considered when calculating operating profit.
  • Where Detractors or Passives leave you sooner than Promoters, you can assign a cost of attracting a new customer. Many sales teams are split into ‘Hunters’ who go after new customers and ‘Farmers’ who develop deeper relationships over time and are measured on retention and additional business for existing customers. Farmers generally cost about a quarter of the Hunter cost per revenue dollar. If you don’t split your sales teams this way, agree a reasonable rule of thumb with your finance partner while you try to measure it more accurately. Marketing costs can be split that way too.
  • If you happen to have any indication that you get some of your new customers by referrals from your happiest existing customers, it is worth agreeing a way of taking this into account. However, if you already have a strong enough differentiation between Promoters, Passives and Detractors for your purposes, I suggest this simply be listed as an additional factor that you have not yet quantified. Attaching a reliable number to it can be tricky.
  • Beware of the law of small numbers. If the most positive and negative numbers come from unusually small groups in your analysis, you should find a way of combining them with a larger group until you can validate the reality of what you have seen.

If you are not able to get to this level of detail, calculating expected lifetime revenue per customer is a lot better than doing nothing.

If you can only work on one thing for a contract business

If all this is too sophisticated for the time you have available, here is the single area you should focus on, if your business depends on annual contracts. Just agree the value of a one-percent improvement in contract renewal rates. It is easy to calculate, and you probably have the data on past renewal rates. If you work in a large company, you have de facto experiments in place. By this I mean you can simply observe different measurable business practices or levels of customer-centric performance that have happened by accident, rather than by design. Look at how they have affected renewal rates. If you seem to have nothing relevant, test new practices in part of your company and compare renewal rates. You can test multiple things simultaneously, provided you keep a control group, where nothing has changed. Improved renewal rates were how we justified Customer Success teams at HP Software. These teams worked with customers, free of charge, to make sure they were using software effectively and achieving the benefits they expected.

Summary

Compared to the others, Promoters stay with you longer, buy more products, escalate less, are less price sensitive and are less expensive to sell to and service. There are many businesses that have marginal overall profitability. If you have customers that have been generating negative margins for some time, you will have to decide whether you can turn them around or whether you should drop them as clients. Clarity is more important than always getting the answers you would most like to hear. Once you have agreed the lifetime values of the different NPS customer categories, you and your CFO (or delegate) should present it together to your leadership team for approval. Even if you are not able to do it right away, it should be part of your formal NPS implementation plan. Your credibility depends on it. Your company’s long-term commitment to NPS also depends on it.

Looking forward

The next article in the series will be a counter-example, meaning an example of what you should not do when conducting customer research. The first one will be from British Airways.

Learning check

Here are some true / false questions to check whether I have been successful in communicating my main messages in the last few blog posts. The answers are at the bottom of the page.

  1. The cost of renewing an existing contract is typically one-tenth the cost of acquiring a new customer.
  2. If your overall brand NPS trend is better than that of your competitors, it is safe to assume that all parts of your business will benefit in the same way.
  3. Bain experience suggests that the average time lag between a relative NPS improvement and new product revenue improvement is 6 to 18 months.
  4. Since contra-revenue is not in a standard P&L statement, it should not be considered when calculating the lifetime value of a customer.
  5. To avoid bias, all customers should be considered equal in your research, no matter how much they spend with you or your competition.

 

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.

Answers to the learning check questions:

  1. True: Renewing a contract is mainly an administrative effort and costs far less than hunting for and acquiring a new customer.
  2. False: You need to do the analysis for each part of your business for which you produce a P&L.
  3. True: This is to do with the average purchase cycle. Even if they love you, people are relatively unlikely to buy the same thing again right away. This varies widely by type of product.
  4. False: Promoters tend to get lower discounts than less happy customers and discounts from list prices are not in your P&L in most accounting systems.
  5. False: You need to distinguish between customers who spend a lot and those who don’t spend much on your type of product or service when calculating lifetime value. Large spenders tend to be more demanding than small spenders, and therefore tend to give lower NPS scores.

#101 – Choosing projects, benchmarks, tech support cartoons

/ , , , , / , , , , , , /

 

Welcome to the 101st Customer Strategy newsletter! The five topics this week are:

  1. Unusual tips on prioritizing / choosing improvement initiatives
  2. Why not share your benchmark NPS data with customers?
  3. Latest blog posts – Deep series on NPS continues
  4. Notable items from other sites – Tech support cartoons – Vertica NPS benchmarks
  5. Looking forward

Unusual tips on prioritizing / choosing improvement initiatives

Like many of you, I suppose, I have often been confronted by the need to choose among possible projects. This happens in every business area, not just customer experience. I won’t bother you with the usual and obvious selection criteria such as ROI. What follows is a more personal list. These are three factors I have found to be important over time and I hope you will find something new here.

  1. Choose projects that your manager’s manager is likely to find important. This has all sorts of advantages. It makes your own manager look good. If your manager leaves or changes jobs you can be reasonably sure the project will continue. You will probably get asked to present the project and provide status updates two levels up in the organization. Hello promotion opportunities!
  2. Don’t consider any projects that will deliver nothing worthwhile during the first nine months. Indeed, I think your projects should demonstrably deliver something worthwhile every two to three months. It is one of the keys to retaining sponsorship for your work. If your project plan is to deliver nothing major in the first nine months, well… what can I say? You have failed the project management ‘pregnancy test’. Something will change in the environment during those months and will prevent success.
  3. Choose projects that are likely to be easy to communicate. If the project is really quite sophisticated you should at least choose a clear and simple name that describes what the project is about. Ideally the name should make someone who wants to stop the project sound like an idiot. Try saying “Let’s stop the ‘on-time delivery’ initiative.” There, did that sound like a good idea? Of course you then actually have to communicate progress regularly and generate ongoing enthusiasm for your output. If you don’t have a communications person on your team, go and get one or at least borrow one part-time.

Why not share your benchmark NPS data with customers?

If you are among the many companies that have reliable customer experience benchmark information, why not share that information with your customers? There is no individually identifiable customer information in such data, so you should not have any privacy concerns. Your company does not have to be the best one on the list. Indeed it may make you seem even more honest and open if you are not at the very top.

When I say ‘reliable customer experience benchmark information’, here is what I mean:

  1. It is ‘double-blind’, meaning customers answering the questions do not know who is funding the research. And ideally the people asking the questions don’t know either. The latter point is not so important if your research is carried out online but matters if done by phone.
  2. It covers your company and your main competitors.
  3. The research is performed by a third party that is recognized as an expert in the area.

Of course, you may not want to make broad public announcements that provide a ranked list of all relevant companies. Comparing yourself to the competitive average may be enough. This was all brought to mind by a new blog post by Dr. James Borderick of Micro Focus. He openly says that Micro Focus is ranked 12th among 50 companies covered by the double-blind research. He then goes on to provide a comparison between Micro Focus and the average company for each of four subsets of the overall software business. If you find the rankings strange compared to the overall ranking, just bear in mind that there are fewer competitors in each of the subset areas than in the overall total, as not everyone competes everywhere.

Where you have a particularly strong position, I suggest providing your sales people with the full details. I can’t think of a reason not to let them show customers how you compare to other companies they may be considering.

Have a look at the Micro Focus information here.

 

Our latest blog posts

The posts on this list are part of my extensive and deep series about the Net Promoter System. The one at the top of the list is one of the most popular articles I have ever written. (Thank you.) Older posts are still available on the blog page.

image NPS (17) – Does culture affect NPS / customer survey outcomes? – 17th in the series on NPS

This is the 17th article in a series on the Net Promoter Score and Net Promoter System. This time I cover cultural differences in the way people respond to surveys.…
image NPS (16) – Five more survey response rate improvement suggestions – 16th in the series on NPS

This is the 16th article in a series on the Net Promoter Score and Net Promoter System. In addition to the direct marketing techniques mentioned in my last article, here…
image NPS (15) – Use direct marketing techniques to improve survey response rates – 15th in the series on NPS

This is the 15th article in a series on the Net Promoter Score and Net Promoter System. The subject this time is the use of classical direct marketing techniques to improve response rates to survey requests sent by email.
image NPS (14) – 14th in the series – Customer survey response rates and statistical significance

Welcome to the 14th article in my series about NPS and the Net Promoter System. This time I cover response rates, sample sizes and statistical significance. Perhaps the most important subject covered here is how best to communicate information about significance. (Hint: Don’t!)
image NPS (13) – 13th in the series – Whether and when to survey

This is the 13th episode in my series on the Net Promoter Score and the Net Promoter System. This one is a bit longer than the average and covers some thoughts about whether you should surevy customers at all, and if so, when.
image NPS (12) – 12th in the series – Should I weight my survey results?

So you have your survey results and the sample population is not representative of your customer population. So should you play around with the numbers until they match? A difficult question. There is a learning check / quiz at the end of this article.

Notable customer experience items from other sites

Reader’s Digest – 25 funny cartoons technophobes can appreciate

These seem to be quite old, given what computers look like in many of them. Some real goodies. I particularly like the one about the virus.

Have a good laugh here.

Joy King – Vertica scores big in customer satisfaction

Since we have already been on the subject of Micro Focus above, here is an additional example of the use of double-blind NPS research data in customer communication. Joy King is a former colleague of mine and is VP of Product Management and Product Marketing for the Vertica business. Vertica can best be described as a columnar database. Columnar databases are many times faster than relational databases. Even when I worked at HP part of their customer list was a secret. I never learned why and speculate that the major Silicon Valley companies who were customers wanted $$$ for us to use them as references. I agree with about 95% of what she has written here. My hesitation is for what she says about benchmark NPS numbers above 60. They are rare, but they do exist. She is right that you should treat such numbers that are presented without details of how they are determined as probably bogus.

Read Joy’s article here.

 

Looking forward

Currently negotiating two speaking engagements for after the summer vacation period. You can see a video of on of my keynotes here. Just email me at mfg@customerstrategy.net if I can help motivate or inform your team.

Maurice FitzGerald on stage in Amsterdam

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.

 

#100 – 100th issue – When is it OK not to invest in CX? – NPS blogs – Infographics – 100 ideas

/ , , , , / , , , , , , /

 

Welcome to the 100th Customer Strategy newsletter! The five topics this week are:

  1. 100 newsletters already?
  2. When is it OK not to bother with improving customer experience?
  3. Latest blog posts – New series on NPS continues
  4. Notable items from other sites – CXO Infographics, 100 customer-centric companies
  5. Looking forward

100 newsletters already?

Yes, this is indeed the 100th Customer Strategy newsletter. I started the newsletter, blog, and books with a simple idea in mind: to do a sort of ‘mind dump’, meaning to transfer a lot of knowledge and experience from my brain to electronic and physical media. I imagined that I would then be able to forget about it all and concentrate on being retired.

It has not worked out that way.

I thought the principle was sound. I started my career in the clothing industry. When I left it, I felt I was an expert in two areas: logistics and stonewashing. Digital Equipment Corporation (DEC) hired me for my logistics skills, so no mind dump was necessary there. However, I felt I had innovated considerably with the various chemical and physical processes involved in washing jeans. When I stopped working for the Wrangler jeans parent company I felt a need to preserve that knowledge. So I wrote it all up, photocopied it, and sent it to my colleagues and to various internal and external laundries and chemical companies with which I had worked. That was in 1985. I can say that I never thought about it all again from that point onwards.

My latest mind dump worked as far as my work on cost reduction is concerned. It has not worked out that way for customer experience and I think the reason is clear: we are all constantly surrounded by customer experiences every day. As a professional, it is hard not to observe what is happening and to think about what companies and government institutions could do better. So I keep on writing and posting content, though I feel I have already offered all the original thought that was in my head. For the last six months I believe I mainly reinforce points I have already made, sometimes by commenting on the work of others.

Our books continue to do well. June 2019 was the best of the three months of June we have had since launch. I have also been fortunate enough to be asked to speak to live audiences from time to time, and that is quite rewarding. The only work I do from which I don’t get any particular satisfaction is managing the 104,000-member LinkedIn Customer Experience and Artificial Intelligence group. Ever since LinkedIn removed certain management features about 18 months ago it has been impossible to stimulate interesting discussions or indeed any discussions at all. I think I will probably stop working on it.

I feel comfortable continuing with the books, newsletters, blogs, and speaking for now, and hope you feel the same way, faithful readers.

When is it OK not to bother with improving customer experience?

Those of you who expect me to answer “Never!” are going to be disappointed. Business strategy is about winning. Winning is about deciding how to deploy your scarce resources so that you can win. Yes, you need to decide whether your plan is to win in the short term or over time. Whichever time horizon you choose, the nature of your decisions is the same: what investments will give you the ROI you need in the timeframe you need it?

Try to think about the question this way: Customer experience investments are based on the principle that if you make your customers happier than those of your competitors your business will grow at a faster rate than your competitors’ growth rates. So, if you are profitable and growing faster than your competitors in your industry you are by definition making your customers happier than the competition is. This is true whether or not you have any formal customer experience initiatives or a CX team or indeed any processes that are explicitly designed to improve customer experience. So… if everything is going just fine, other investments may make more sense in your current business situation.

While my point is a general one, I think the situation is most likely to arise with smaller companies. Larger companies tend to become more ‘average’, and almost all will probably need to invest in customer experience improvement projects.

Yes, I enjoy being provocative from time to time. The above is my attempt for this 100th newsletter.

 

Our latest blog posts

The posts on this list are part of my extensive and deep series about the Net Promoter System. Older posts are still available on the blog page.

image NPS (12) – 12th in the series – Should I weight my survey results?

This is the 12th episode in my series on the Net Promoter Score and the Net Promoter System. There is a learning check / quiz at the end of the post. Suppose your research population does not match the actual profile of your customers. What should you do, if anything?
image NPS (11) – 11th in the series – The law of small numbers

Continuing the discussion on Daniel Kahneman’s System 1 (intuitive fast thinking) and System 2 (rational slow thinking), some curious things happen when people study surprising data…
image How and why you should make it as easy as possible for customers to complain

Complaints are bad, right? Well… sort of. The complaints you know about are valuable feedback and give you an opportunity to recover and retain your customers. It seems logical that you should do everything to minimize the number of complaints you receive. I disagree…
image NPS (10) – 10th in the series – How to avoid confirmation bias when analyzing research results

In his book Thinking, Fast and Slow [1], Daniel Kahneman describes two ways our brains function. He refers to them as ‘System 1’ and ‘System 2’. In this post I cover the way our minds mess us up when we analyze research results.
image NPS (9) – 9th in the series – How to use the answers to the open questions

While our rational minds like to see scores and trends, the primary value of Net Promoter System surveys lies in the answers to the “Why?” and “What should we improve?” questions…
image NPS (8) – 8th in the series – I have my NPS number. Is it good or bad?

“OK, I have my NPS number. Is it good or bad?” There are two parts to the answer. First, the score does not tell you much on its own…

Notable customer experience items from other sites

CXO infographics by Annette Franz

Infographics can be a powerful communication tool. When I see them in office settings they often make me stop, look, read, and sometimes understand something new. Annette Franz is one of the world’s leading customer experience experts and she has collected 263 infographics on Pinterest. There are a few duplicates, and I expect that the number of unique entries is about 10% fewer. One thing she did not explain is what the ‘O’ in CXO means. Optimization? Organization? Any guesses?

Have a look here.

Habits of 100 customer-centric companies – Blake Morgan for Forbes

Blake Morgan contributed this interesting article to Forbes. She picked 100 companies that have done well in the American Customer Satisfaction Index reports, in the Temkin Experience ratings and elsewhere. Blake then tries to pick out something interesting and relevant to say about each. I have to admit that about a quarter of the statements are too generic to be useful, though there are some good ones on the list as well. If a reader would like to put the article through their text analytics software I would be interested to learn about any consistent messages. Please let me know.

Read Blake’s article here.

 

Looking forward

100 and counting. Will we make it to 200? Who knows?

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.

 

#99 – Relationship between employee and customer sat (new study) – Journey mapping for scorecard reporting

/ , , , , / , , , , , , /

 

New study on relationship between employee and customer satisfaction. Journey mapping. Welcome to the 99th Customer Strategy newsletter. The five topics this week are:

  1. Relationship between employee satisfaction and NPS (not much)
  2. Customer Journey Mapping and scorecard reporting
  3. Latest blog posts – New series on NPS continues
  4. Notable items from other sites – Do Detractors really say bad things? Off-boarding
  5. Looking forward

Relationship between employee satisfaction and NPS (not much)

Rainy days help my concentration. Regular readers know that I have done three annual studies on the relationship between employee satisfaction and customer satisfaction. For customer satisfaction I have been using the American Customer Satisfaction Index because there used to be no other publicly-available source of such data. For employee satisfaction I have been using Glassdoor ratings for the same reason. As I mentioned a couple of weeks ago, there is a new public source of NPS benchmark data as most Temkin research has now become available free of charge (here).

It rained hard on Monday morning, so I decided to add the Temkin 2018 US consumer benchmark NPS data to my ACSI-Glassdoor spreadsheet and compare the results. While both Temkin and ACSI cover over 300 companies, the lists do not match completely. I have been able to match 223 companies in my first attempt. I then calculated various correlation coefficients and R-squared numbers.

The results are easy enough to understand, I think. For these 223 companies, employee-satisfaction (Glassdoor) variations explain just 5.8% of the variations in customer-satisfaction (ACSI) numbers and 6.6% of NPS variations. As you would expect, the correlation between customer-satisfaction (ACSI) numbers and NPS is high, at 0.74.

What this means is that there is not much of a relationship between employee and customer satisfaction. I have not yet done the NPS analysis by industry and expect to see what we have seen with the ACSI numbers: there is a relatively strong relationship for high-touch industries like hotels, supermarkets, and retail, and a non-existent or even negative relationship for companies where employees don’t have much contact with customers.

I think I will need more rainy days to get the time and motivation needed to abandon the ACSI-based approach and replace it with the full Temkin-Qualtrics NPS data. I think I need to do it, since the general level of understanding and acceptance of NPS is much higher than that for ACSI data. Your views welcome.

Customer Journey Mapping and scorecard reporting

I quite like the principle of reporting customer feedback by touchpoint on customer journey maps. Since I don’t much care for the way most companies approach customer journey mapping, I think this bears some clarification.

For brand or relationship-level feedback, I continue to believe the standard three-question NPS format is the best solution. (Rating question, ‘Why?’, ‘What could we do better?’) Many companies add ‘driver’ questions that I consider useless. The driver questions are usually driven by a perceived need to provide a scorecard for each and every department in a company. 

My suggestion is to prepare a top-level customer journey map and to use it for reporting. Use software or humans to assign each customer response to an open question to one of the steps along the customer journey. This should quickly give you a picture of the interactions the customers like and those that need improvement.

You will also see customer touchpoints that receive no feedback at all. In general, this means they are good enough and don’t need to be improved. An exception would be something that is central to your customer strategy. For example, if you have spent a lot of money to provide faster delivery than all of your competitors but fast delivery is never mentioned by your customers… well… you may have made an incorrect strategy choice. This type of feedback would indicate that extra-speedy delivery is not important, so you can save some money and just make it as fast as your competitors’ delivery.

Finally, don’t get too granular. If you get three thousand survey responses every month and have customer journey points that get just one or two comments, you may have broken the customer journey down to too fine a level of detail. Conversely, if you have one step that gets 600 comments you should probably break it down into several elements.

 

Our latest blog posts

I continue getting feedback on my Elon Musk / Tesla article via LinkedIn and directly. I think his recent launch of 60 clearly visible satellites that are disturbing astronomic observations is another indication that his ‘golden touch’ may be fading. The posts on this list are part of my extensive and deep series about the Net Promoter System. Older posts are still available on the blog page.

image NPS (7) – 7th in the series – Transactional / Episode surveys – Best avoided? Use very selectively!

Transactional surveys are by far the most common type of customer research. It is helpful to think of them as feedback about ‘episodes’ or ‘jobs to be done’. They are hugely overused…
image NPS (6) – Getting useful feedback about one of your products, services, or customer projects

Unless your company only sells a single product or service, you need a separate process to gather feedback about each product or service you sell. While benchmark and relationship surveys give you overall feedback, they probably don’t let you know (for example) what new features customers would like you to add.
image NPS (5) – Relationship research with large B2B customers

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

Notable customer experience items from other sites

MeasuringU – Do Detractors really say bad things about a company

One question that comes up quite frequently is whether there is any actual evidence that Promoters, Passives, and Detractors actually exhibit the behavior they are theoretically supposed to exhibit. This article is the result of a deep research on the subject. Among other things, it shows that 90% of all negative comments about a company do indeed come from Detractors. The author (Jeff Sauro, PhD) has put a lot of effort into the paper.

Read it here.

MYcustomer – Why do we ignore the end of the customer lifecycle when building personas?

Joe Macleod has written a really thoughtful article about something we never think about: What about customer off-boarding? We concentrate our CX efforts on our current customers and I suppose on new customers too. We never give a thought to those who are leaving us, whatever their reasons. Some of these reasons can be tragic, of course. I remember the difficulties I had helping my best friend’s family cancel his car insurance after he was killed in the crash of Swissair flight 111 from New York to Geneva. OK that’s an extreme case and what Joe has written is somewhat more run-of-the-mill.

Read his article here.

 

Looking forward

I will continue to try to publish two blogs per week over the coming month or two and do my best to take the research on the relationship between customer and employee satisfaction a little further.

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.

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

/ , , , , / , , , , , , , , /

 

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

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

Pick powerful names for your improvement projects

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

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

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

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

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

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

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

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

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

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

 

Our latest blog posts

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

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

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

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

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

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

Notable customer experience items from other sites

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

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

Read Edward’s blog here.

Retently – What is a good Net Promoter Score?

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

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

Worth the ten-minute read here.

 

Looking forward

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

Here are links to all of our books on Amazon.com. Kindle versions are available in all stores. Print versions are available from the major stores only. And as of two weeks ago, you can find the books, or at least order them in many bookstores. If you have already read any of our books, please write reviews on Amazon.

Customer Experience Strategy – Design & Implementation

Net Promoter – Implement the System

Customer-centric Cost Reduction

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

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

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

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

To change your subscription, click here.

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

/ , , , , / , , , , , , , , /

 

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

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

My 10th Bain Net Promoter System podcast

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

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

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

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

Two customer experience books I have read recently

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

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

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

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

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

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

 

Our latest blog posts

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

image Tesla, Elon Musk, and the new financial apartheid

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

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

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

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

Notable customer experience items from other sites

‘Fruit’ support screws up

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

Read his disappointing story here.

Richard Own and Fred Reichheld comment on the WSJ NPS article

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

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

 

Looking forward

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

Here are links to all of our books on Amazon.com. Kindle versions are available in all stores. Print versions are available from the major stores only. And as of two weeks ago, you can find the books, or at least order them in many bookstores. If you have already read any of our books, please write reviews on Amazon.

Customer Experience Strategy – Design & Implementation

Net Promoter – Implement the System

Customer-centric Cost Reduction

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

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

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

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

To change your subscription, click here.

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

/ , , , , / , , , , , , , , /

 

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.

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

/ , , , , / , , , , , , , /

 

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.

 

#94 – Happy Birthday to us!

/ , , , , / , , , , , , /

 

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.
1 2 3

↑

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.
CustomerStrategy.net is owned by Maurice FitzGerald Consulting, Geneva, Switzerland • Site developed in conjunction with iCulture and iBusiness

Show Buttons
Hide Buttons