NPS

NPS framework

The Outer Loop of the Net Promoter System® (5-minute read)

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The Outer Loop is where generic, systematic improvement opportunities get addressed. There are two types of Outer Loop activities:

  • The first are those that can be addressed within a single team or function. For example, if your French customers consistently tell you they do not want service center people to use their first names when speaking to them, that can be addressed within the service center.
  • The second category of improvement work is that which requires collaboration across different businesses and functions. If your customers tell you that you need to be able to deliver products within 24 hours, when your current minimum is a week, different parts of the company will need to work together to make the improvement. This is the core work of the overall company customer experience leader.

Prioritizing Outer Loop work

The essence of any business strategy is the concentration of your scarce resources on just a few things that really matter and help you to beat your competitors. When one initiative is complete, start a new one. For the cross-functional work, I recommend having three to five initiatives, no more. It will make the work relatively easy to communicate and to resource, and the team will see regular progress. The (separate) mono-functional teams should have the same limit. A business or function does not necessarily have to have an improvement initiative. You should not waste resources on things that customers don’t care about.

Useful sources of data for Outer Loop work

Here are the sources of data that are most useful for Outer Loop work:

  1. If you have it, the competitive NPS benchmark data should be the most important source. While it might seem subtle, the purpose of your work is not continuous improvement of everything; rather it is the improvement of a few things that make the biggest difference competitively, whether to catch up, or to provide differentiation.
  2. Relationship feedback data is generally the second-most important source to use. If your target customer base is a small number of large companies, it may be all you need.
  3. Opportunities that the Inner Loop process has not been able to address are in third place. The reason they are not at the top of the list is that they need to be prioritized in a broader context. While it may seem odd, there will be things a lot of customers would like you to improve but where there is no real benefit in doing so, compared to other potential actions.
  4. Operational data is necessary to establish the current state of things customers complain about. For example, your customers may complain about long delivery times for products, and your operational data may confirm that the most popular product was out of stock for two weeks, but it is available now. You may decide to discuss how that situation can be avoided in the future, or may just decide that it was a one-off event. Personally, I totally failed to fix one of these situations at HP, despite trying hard for years. Our manufacturing plants for servers shut down for a week at the end of each calendar year. The order management systems continued to provide customers with estimated delivery dates that did not take the shutdown into account. I tried to get this changed for four years in a row, without success. I believe the root cause of my failure was a corporate function that was being measured by these committed dates, rather than actual shipment dates. And don’t get me started on a metric where the ‘shipment date’ was the day something was put into a shipping container, rather than the day the shipping container actually left.

Managing improvements — the Huddle

The primary vehicle for the selection and ongoing management of improvement initiatives is the Huddle. The main mono-function Huddles should be weekly or more often, and can be very brief. The majority of their discussions and work need to be on things team members can do on their own. You can complement these by longer meetings on a less-frequent basis. Cross-functional Huddles are harder to coordinate and should be planned as monthly events. The same cross-functional team can have a longer session twice a year to work on the overall customer experience strategy.

Typical agenda for mono-functional Huddle

Like any other meeting, there needs to be an agenda and people need to prepare for it in advance. Here is a reasonable starting point:

9:00 Welcome — John
9:05 Check status of items on Huddle action tracker — Paul
9:10 New feedback from transactional surveys — George
9:20 Status update on Order TAT initiative — Ringo
9:25 Any Other Business and Close

Fifteen minutes can be plenty for a huddle too.

A great method for prioritizing work

Jim Dixon of Bain has published a great methodology[1] for prioritizing improvement work. It finally addresses the challenge of making customer journey mapping into something truly useful. Journey Mapping is a popular customer experience technique. Its main disadvantage is that it considers every customer touchpoint as equal. It also fails to distinguish between hygiene factors and things that give you a competitive advantage. Jim’s work solves both problems.

Hygiene factors

A hygiene factor is something like taking a shower: nobody cares if you have one, but everyone will notice if you don’t have one for a long time. Think about a real-world example: you don’t think about data security when using online banking. You would not recommend your bank because they did not leak all your personal information and passwords. However, you would certainly be very unhappy if they did.

Jim Dixon takes this into account by considering each touchpoint in terms of its relative ability to delight or to anger customers. The source for this information should be customer comments on the open questions in your feedback system. If Detractors say that long waiting times are the top reason for them being a Detractor, and Promoters never mention waiting times, waiting times only have the potential to anger, and are a hygiene factor. To an extent, this logic is built into the best of the customer journey systems. What Jim adds is competitive benchmarking. This gives you a way of visualizing and taking account of areas where your competitors have an advantage, as proven by your research. Here is the way to combine it all into a single chart. The diagram below is from Jim Dixon’s work.



Use in a Huddle

If an Outer Loop team were considering the graph to prioritize improvement work, the two red circles would take top place. This example does not have any green circles, which would be areas where you have a competitive advantage you may want to push even further. You would probably avoid taking any action on items in the bottom-left box, as your customers don’t care about them. Existing ‘bottom-left’ improvement work can and should be wound up to provide resources to work on the new priority areas. This process should be used to establish the initial ‘long list’. A further step is needed to get to the final short list.

Prioritizing initiatives

The graph below is a simple diagram that will help you to prioritize improvement initiatives based on impact and ease of implementation. In the example below, you would get to work on the ones in the top-right box right away. This one was used to prioritize actions after collecting feedback from Swiss business school students.

Ease-impact diagram


[1] You can read the Bain description here:
http://www.netpromotersystem.com/resources/toolkit/interaction-prioritization.aspx

(The image at the top of the article is copyright Bain & Company. Used with permission. 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.)

As is usually the case, this post is an edited version of a chapter in one of our books; in this case Net Promoter – Implement the System. Like all of our books, it is available in print and Kindle formats from Amazon.

 

NPS framework

The Inner Loop of the Net Promoter System® (5-minute read)

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Your research process produces feedback that individual employees and teams need to understand and react to. Let’s consider the simplest and most common use of the Inner Loop: ‘episode’ research. A customer has a query of some sort and wants it resolved. Let’s suppose they have filed an insurance claim. An agent in your team has just finished a call with a customer to let them know the payment has been made to their bank account, and closed the incident in your CRM system. The system automatically sends a feedback request about the whole claims experience to the customer. (The agent has of course told the customer to expect it.) Surprise, the customer says the payment was not received, but they were since able to find a different way to solve the problem on their own. First, this feedback needs to go directly back to the agent concerned. Personally, I feel it should go back without human intervention if possible. I don’t see a reason that the agent’s manager would need to know, depending on how the agent reacts of course. While I have picked an unsolved problem as the example, the agent should get all positive, negative and neutral feedback directly.

Follow up with the customer

Ideally the agent or his / her peers or manager should follow up with the customer to thank them for the feedback, no matter what it is. The call should happen within 24 hours, preferably much more quickly, before the customer forgets about what they have written. Unfortunately, most companies say they are not able to afford the ideal process and only call back the Detractors, at best. (I can’t count the number of Detractor responses I have given to Air France and Sabena surveys without ever being contacted in any way.) If you have made the (bad) decision that you can only afford to call the worst Detractors, start with just those who gave you a zero or 1.

There is no formal script for such calls. You need to apologize, then have a discussion. Apologizing works, and you must do it on behalf of the company. “I am sorry we screwed up.” not “I am sorry they screwed up.” Whatever your cost limitations, you must at least thank every customer who took your survey for doing so. Even if you use a standard email for this, it should come from the head of the appropriate department and give examples of improvements that have come from prior customer feedback. The department head’s email and phone number should be included, with an invitation to call or write. That won’t cost much and at least your angriest customers get a way of sharing their anger directly with you, rather than just spreading it across the Web.

No call-back script? Really?

It is obvious when people are speaking to you from a script. It comes across as insincere. You need a formal or informal expert system for the unscripted call-back dialog to be consistent and provide value. The best informal system is coaching from a supervisor, supplemented by discussions with team-mates doing the same type of work. Team-mates can help during live calls if you have an instant messaging system. “Let me just check whether any of my colleagues have seen this.” Then a short message to the WhatsApp or Slack group for the team, for example. I have also seen this work in a small software development team where the person taking the call would simply (and audibly to the person on the line) talk to a more expert person near them to resolve the situation.

Calling Promoters back

If a customer has told you they would definitely recommend you and that the latest transaction has made this even more likely, you need to have a ready way of activating them; meaning letting them actively promote you. In many businesses, you could simply thank the customer and say you would really appreciate it if the customer could write a product review on a specific website. You may also like to invite them to join your user group or give them a free ticket to a company event. Transactional feedback comes mainly from end users of products and services. In B2B situations, they will not normally be the ones making the purchase decisions. End users have a more direct impact in consumer businesses.

Why talk to Passives?

In businesses where the cost of change is high, Passives are the category that are most likely to leave you. This is the case for B2B companies that sell things on the basis of an annual contract, or who have dominant market shares in some area. While that may seem surprising, there is a certain logic to it. Passives usually represent about 40% of your customers. You tend not to talk to them much, if at all. The Detractors get lots of attention and often wind up happy. The Promoters are people we like to talk to because they love us.

The Passives? The typical attitude of most companies is “Well, they are not complaining, so I am sure everything is going just fine. No need to talk to them.” If you have any competitors, this is a disaster. You have to assume that your competitors are already talking to your Passive customers, and being particularly nice to them. If you seem to have forgotten about them, they will leave you. Of course you can try to stand that on its head, work out which of your competitors’ customers are their passives, and start to talk nicely to them.

Customer competition
If you don’t have the resources to talk to everyone

How should you prioritize follow-up if you do not have enough people to call everyone?

  • Your top priority should be the people who have provided long responses to the verbatim questions. They care. They have taken a lot of time to provide thoughtful input. You should take at least as much time to call them back and discuss their input. Anyone who provides lots of suggestions is a potential Promoter, regardless of current status.
  • The second priority is your Detractors.

Of course, if you don’t have the resources to call anyone back, you really should not be surveying.

Email and instant messaging for collaboration

Many teams use email to discuss and resolve complex customer situations where people outside service center operations have to get involved. It is not a great solution. Email makes it difficult for people who have just joined the conversation to catch up on what has happened up to then. The use of CCs in email chains may mean that no single individual has the full picture. Sophisticated instant messaging systems like Slack may help if you want to be able to view and search the entire conversations easily. It is tricky to find a good balance, as people who only need to contribute something to a small part of the discussion should not have to be notified of every additional message.

Next time: the Outer Loop.

(Image is copyright Bain & Company. Used with permission. 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.)

As is usually the case, this post is an edited version of a chapter in one of our books; in this case Net Promoter – Implement the System. Like all of our books, it is available in print and Kindle formats from Amazon.

 

NPS framework

The heart of the Net Promoter System (1-minute read)

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While it is unfortunately the only part of the system that many companies use, the NPS numbers don’t matter all that much. What matters is what you do with what you have learned. The heart of the Net Promoter System lies in the three processes that support feedback, learning and improvement. They are shown above.

The Inner Loop covers improvements for individual customers. You will find that some issues come up repeatedly and need to be improved for many customers. These ‘class issues’ are the subject of deeper analysis and improvement work in the Outer Loop. Some Outer Loop items cross business and / or functional lines and need to be led by someone who has the appropriate authority; usually the customer experience leader in larger companies. The Huddle is a regular team meeting to discuss progress. For those not familiar with American Football, the Huddle is the brief get-together each team does to plan its next play. It takes seconds. Implementing each of the three elements well should be the top priority for your Net Promoter System implementation.

(Image is copyright Bain & Company. Used with permission.)

#72 – McDonalds, Singapore Airlines, and lots more

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Strange in-restaurant survey by McDonalds, Singapore Airlines feedback process. Welcome to the 72nd edition of my customer strategy newsletter. The five topics this week are:

  1. My experience providing feedback in a local McDonald’s
  2. Singapore Airlines customer feedback process
  3. Latest blog posts
  4. Notable items from other sites –  Cognitive Bias, ROI of customer experience improvement
  5. Looking forward
My experience providing feedback in a local McDonald’s

I made a rare visit to a McDonald’s restaurant in Geneva a few days ago. While enjoying my meal, a person who seemed to be a supervisor came up to me and told me I could have a free coffee in return for answering an online feedback request. It did not take long but did contain a (negative) surprise. After some thumbs-up/thumbs-down questions about cleanliness and the meal, I got the following two screens. (The screen captures were taken after I answered the questions.):

So, what is surprising, you may ask? The answer is simple: I had no contact whatsoever with their website. (For readers inclined to be picky, you can see that the URL for the feedback form is not a McDonald’s URL.) The following question was the recommendation question about the restaurant, but I had no way of knowing that when answering about the website.

I believe this issue could have several explanations. First, McDonald’s seems to have implemented the Net Promoter Score in an inappropriate way. NPS is an overall brand metric that is also useful at the level of an individual product or service. Second, the people in charge of selecting the research vendor are probably IT people responsible for their website and they decided to slip the question in there anyway. Third, since the copyright notice suggests the survey form may exist since last year, it is possible that nobody reads the results or acts on them. Perhaps they are only interested in the numbers.

Anyway, we live and learn. My advice: use the Net Promoter System and Score only at the overall brand level, or to measure and improve individual products or services. Your website is not a product unless you are a company that creates websites.

Singapore Airlines customer feedback processes

Singapore Airlines usually finishes at or near the top of lists of the world’s best airlines. A flight this week gave me a chance to understand their email/web customer feedback process. It includes what I believe to be the single best thing you can do to improve response rates, and still has room for improvement. Indeed, there is a major ‘gotcha’ that I will describe at the end.

The feedback process for Singapore Airlines is administered by Qualtrics and there are several Qualtrics subscribers to this newsletter who may be able to act on some of my comments. The email I received 24 hours after the flight is just below my comments and suggestions.

  • First, embedding the NPS rating scale in the outbound email is the single best thing you can do to improve response rates to feedback requests sent by email. In my own A/B testing at HP it at least doubled response rates. Others have found that it triples response rates.
  • Personalizing the emails helps response rates too. This one is doubly anonymous. It is sent to ‘Sir/Madam” and we have no idea who has sent it. The lack of an addressee name may be a consequence of privacy laws that prevent transmission of personal data to third parties such as Qualtrics without the consent of the people concerned.
  • There is no commitment to improve anything, at least according to the email. The purpose is research only, apparently.
  • This is a relatively short survey with just ten screens, including the thank you screen at the end. However, the email provides no time estimate and there is no progress indicator as you answer the different questions. Providing a time estimate helps response rates. And I am still traumatized by the British Airways survey I received about three years ago that had over 100 screens.
  • It is explicitly stated that you will not be contacted, no matter what your feedback. That’s pretty disappointing.
  • Response rates and customer sentiment can be improved by telling people what you have learned and improved in the past.

However, none of the issues mentioned compare to the single biggest problem. I received the feedback request, but I did not take the flight. I booked it for a family member who received her boarding card by email, so I know the airline had the correct email somewhere. This also happened to me with Thai airways a couple of years ago.

 

Our latest blog posts

Here are the latest posts. Older posts are still available on the blog page.

image Time to think about the plural of ‘anecdote’ in new ways

Just a few thoughts based on hearing that “the plural of anecdote is not data” twice in the last week. I think there are two new ways of thinking about accumulations of anecdotes…
image Avoiding confirmation bias when interpreting CX, NPS, indeed any research results

Some thoughts on how to avoid confirmation bias when interpreting research results. While I will use Net Promoter System research as an example, this applies to all forms of research…
image Thoughts about survey infrastructure for Net Promoter and other feedback/improvement systems

Unless yours is a very small company, you will not be able to implement and operate an effective Net Promoter System or any other feedback and improvement system without appropriate…

 

Notable customer experience items from other sites

The Atlantic: The Cognitive Biases Tricking Your Brain

Ah… cognitive bias. One of my favorite subjects. This 15-minute read by Ben Yagoda covers all of the common reasons our brains trick us into believing things that are not true. While it all seems particularly relevant in the modern political environment, this is a customer strategy newsletter so of course I would like you to take a different perspective. Use the article to understand why your colleagues and friends believe many things about customer experience (OK, and other topics) that are simply not true. And if you want to be a bit Machiavellic about it, learn how you can exploit these biases to communicate your own messages more effectively. Learn about it all here.

Temkin Group: ROI of Customer Experience improvement in 2018 

Bruce Temkin and his team have just published their 2018 report on the ROI of customer experience by industry. As a software veteran, I am not at all surprised to learn that software is the industry with the best ROI on CX work. The research covered 318 companies in 20 industries. Fascinating. Read the summary here.

 

Looking forward

Book sales continue their positive trend. We first published the books starting in March 2017 and every month in 2018 so far has had better sales than in 2017. As mentioned previously, the thing that helps most is Amazon reviews, so please provide your views there, no matter what you think.

As you probably know, my brother Peter illustrated our books. He has an Oxford doctorate in cognitive psychology. While not about customer experience, I want to mention the three books he has just published in Kindle format. All three are photography books, demonstrating how a 90-degree rotated view of people, landscapes, and architecture can change our persepctive. Read his LinkedIn article on the topic here.

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, with the notable exception of Australia, where print versions are not available from amazon.com.au.

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.
Elephant to illustrate confirmation bias

Avoiding confirmation bias when interpreting CX, NPS, indeed any research results

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Some thoughts on how to avoid confirmation bias when interpreting research results. While I will use Net Promoter System research as an example, this applies to all forms of customer and other research. And… I will suggest how you can use cognitive biases to your advantage when presenting your results or persuading people to invest in a project that is based on your results.

System 1 and System 2

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’. At their most superficial, you can think of System 1 as intuition, and System 2 as rational thought. He offers persuasive arguments that System 1 acts first, and that System 2 is lazy, and does its best to avoid work.

Relevance to NPS and other customer experience research and improvement systems

For NPS to be a trusted metric, it must work for both System 1 and System 2. The Ultimate Question 2.0 by Reichheld and Markey is the reference book for the Net Promoter System. It  concentrates on System 2. This book’s content on survey design, improving response rates and things like the automated analysis of verbatim responses all appeal to System 2. I consider the System 2 work to be necessary but insufficient for success. You also have to appeal to the fast-acting intuitive reactions of System 1 thinking. The following are some items for you to consider.

Sequence of presentation

Kahneman describes an experiment set up by Solomon Asch [2]: subjects were given descriptions of two people and asked for comments on their personalities. Here they are. What do you think of Alan and Ben?

● Alan: intelligent, industrious, impulsive, critical, stubborn, envious.
● Ben: envious, stubborn, critical, impulsive, industrious, intelligent.

Most people describe Alan far more positively than Ben. Because the first word used to describe Alan is ‘intelligent’, the more negative character traits are considered to be justified. However, the words used to describe Alan and Ben are identical. Only the sequence has changed. The first thing that is presented has a disproportionate effect on your message, and sets the tone for all the rest. For example, if the overall message you want to communicate is that your company is making good progress, don’t start with the only negative story. When you are going to talk about what you need to improve and what is going well, start with what is going well. Of course, if you have just taken over the customer experience responsibility, you may want to be Machiavellian and start with the bad news, implicitly blaming it on the prior leadership. You could then reverse the sequence for the same information a few weeks later, and people will think you are making progress. Naturally, if you do this blatantly or often, you will lose trust.

Jumping to conclusions

We all jump to conclusions without being aware of it. Kahneman offers the example, “Ann approached the bank” to illustrate this point. You almost certainly formed an image of a woman walking towards a bank, possibly to deposit money. However, the statement is ambiguous. If we had also been told that Ann was on a canoeing trip, our conclusion would be different and we would see her paddling to the side of the river.

A lot of customer experience information is ambiguous. People’s System 1 will jump to conclusions and System 2 will sleep, unless you force it into action. You have probably heard of the metaphor of blind people trying to identify what they are touching, when each is able to feel just one part of an elephant. Turn this on its head and you have confirmation bias. If your audience has been primed to think, for example, that customer service is awful, they will use whatever they can in your data to support that conclusion, and may not even realize they are doing so.

How to get System 2 to work

In other words, how do you get people to react totally rationally to the NPS numbers you present and the financial business case you may be making? The sad truth is that you can’t do much about it. Your best solution is to force your System 1 to look at what you are going to present. Think in terms of someone who is going to ignore most of the data. What are they going to see when they look at your slides? What are they going to hear when you speak? Their intuitive, emotional reaction will win out. System 2 will act only for brief periods. Plan on it.

There is some science that suggests that asking people to do a simple mathematical puzzle that requires System 2 to get the correct answer will help engage System 2, at least for a brief period. Priming people by giving them a puzzle to do in a break, or just having it on the screen before your presentation may help. There is also evidence that making something difficult to read forces System 2 to engage. In any case, you should kick off by using a real customer quote or example, appealing to your audience’s emotions before you start showing data.

It’s all quite tricky. We have to learn to combine rational and emotional thinking to be effective communicators.


[1] Daniel Kahneman: Thinking, Fast and Slow, published by Farrar, Straus and Giroux, 2011, ISBN 978-037427631
[2] The full set of Asch’s experiments in this area is described in the article below. The example used is “Experiment VI” in the article.
http://www.all-about-psychology.com/solomon-asch.html

#70 – Official NPS training, importance of project management

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New NPS ‘Masterclass’, importance of project management. Welcome to the 70th edition of my customer strategy newsletter. The five topics this week are:

  1. Official NPS certification has been modernized and moved online
  2. You can’t fake project management skills (I know, I tried.)
  3. Latest blog posts
  4. Notable items from other sites – ‘Accidental CX’, new research on CX tool adoption 
  5. Looking forward
Official NPS certification has been modernized and moved online

Since Fred Reichheld, Satmetrix and Bain own the Net Promoter System and NPS trademarks, they are the only ones who can designate the ‘official’ NPS training provider. Up to now that has always been Satmetrix, via classroom training. That has now changed.

Satmetrix and NICE merged last year. At that time, Satmetrix CEO Richard Owen decided to found his own company, OwenCX. He and Satmetrix agreed that OwenCX would refresh NPS training and create an online certification system. That system is now live. 

I became involved in an odd sort of way. I approached Richard in early July with a proposal to work on online certification together. He told me that they had already done it, and that it was almost ready to launch. The result of that discussion was that I became the pilot student and the first person to be certified. Proud.

And literally as I started writing this sentence, they announced that certification would be available free of charge to CX consultants for a limited time, and at a greatly reduced price for teams. Read all about it here.

You can’t fake project management skills. (I know, I tried)

I had been managing projects for over 20 years when I had an unpleasant surprise. I had recently moved to a new manager and met him in his office in Munich. We reviewed progress on my latest project. After about an hour, he looked at me and said, “Maurice, you know nothing about project management.” After blustering and arguing that I had been doing it for a long time, so that could not be true, I finally asked him what he meant. He asked me some basic questions, like “What is a deliverable?” and “What is a task?” I did badly in answering.

The root cause was that I had never had any formal training in project management. This had consequences. The main one was that I could not communicate effectively with people who had full Project Management Professional (PMP) training. We used the same words, but meant different things. My definitions were wrong and the PMP experts were correct. I fixed the problem by taking a ‘light’ course.

Anyway, that memory surfaced this week as I was managing a project in a more personal domain; a house move. Worth thinking about.

 

Our latest blog posts

Here are the latest posts. Older posts are still available on the blog page.

image Thoughts about survey infrastructure for Net Promoter and other feedback/improvement systems

Unless yours is a very small company, you will not be able to implement and operate an effective Net Promoter System or any other feedback and improvement system without appropriate…
image The lower your prices, the happier your customers will be… right? (Not really!)

A combination of behavioral economics experiments and personal experience that should persuade you that your customers do not always want lower prices. Some fun stuff here…
image Suggested method for choosing your strategy from a list of proposals

Once you have a set of insights about customers, competitors, your industry, the external environment and your ability to implement, the next step is to decide what you are going…

 

Notable customer experience items from other sites

Ian Golding: The Accidental Customer Experience

Ian often writes about his personal experiences as a traveler. Most of the time, he chooses to write about what I will call less than perfect customer experience. In his latest blog he writes about the many unexceptional air and train travel experiences he has had over the last two years. He counted 206 trips in all, and he says he can remember something about just 11 of them, though in most cases he is not quite sure which flight or train trip it was. His theme is that these companies and many others are mainly producing customer experiences ‘by accident’. It’s a nice read. Enjoy it here.

Forbes/Bain: With CX Tools, Master A Few Rather Than Dabbling With Many 

Three Bain leaders just published a summary of their research into the adoption of 20 types of customer experience management tools around the world. Asian companies lead in predictive analytics, as you might expect. Furthermore, they recommend concentrating efforts on just a few tools, rather than spreading resources thinly across many efforts. That seems quite tricky advice to follow. To me it seems worthwhile doing a proof of concept on a range of tools, selecting some of them for pilot, and then deploying the best ones. Perhaps that is what the authors really mean. Read the summary here.

 

Looking forward

NPS is not the only CX certification-related thing going on in my world at the moment. For NPS I have to think about how to answer someone who wants unofficial NPS training for an association but has no money. Outside NPS, I am looking forward to seeing an announcement of another type of CX training being available in a new language. More soon.

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, with the notable exception of Australia, where print versions are not available from amazon.com.au.

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.
Survey infrastructure

Thoughts about survey infrastructure for Net Promoter and other feedback/improvement systems

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Unless yours is a very small company, you will not be able to implement and operate an effective Net Promoter System or any other feedback and improvement system without appropriate technology. To the extent possible, you should use Cloud-based (SaaS) solutions that do not require you to invest in hardware. Among other things, an advantage of this approach is that you will not be constrained by a corporate IT budget, and can advance on your own. Cloud software is always up-to-date. For the sake of this discussion, Customer Relationship Management software, used by sales and call center people, is out of scope.

Simplest possible research infrastructure

You can use Excel with Outlook mail merge to send surveys, and that can work in small volumes. That should work with Open Office too. The primary challenge is ensuring it looks OK on a phone. Here are the advantages of this simple approach:

  • You probably don’t have to spend any money to get into motion.
  • Assuming small volumes, you can simply ask people to reply to the email to send their survey responses.
  • The emails can go directly from anyone you choose, such as a product manager, or from a process mailbox in the name of the product manager.
  • If you have designed your survey correctly, customers should be able to see the entire survey on a single screen when they open the email. This is almost impossible when using a link to a web-based survey. When customers see the full survey, it improves their belief in your statement that it will only take them a couple of minutes to respond. That in turn will improve response rates compared to a web link.

There are disadvantages, even in small volumes:

  • Managing opt-out lists is difficult. Any survey you send should include a way for the customers to decline the survey and to tell you they no longer want to receive any surveys. If you work from a single Excel contact list, you can probably handle it correctly. If multiple people send surveys from multiple contact lists, it can be difficult to coordinate opt-outs across lists. Failing to manage opt-outs correctly can land you in legal trouble.
  • To do any analysis of the results, you will have to copy-and-paste or otherwise transcribe what has been sent back.

Basic survey infrastructure

Getting beyond the extreme mentioned above, I recommend using SurveyMonkey and MailChimp for basic needs. There are a number of similar alternatives that will also work just as well. (I have no commercial relationship with any software company and consider myself unbiased.)

SurveyMonkey advantages:

  • There are different levels of monthly SurveyMonkey subscriptions, going from free to advanced solutions with no customer-visible evidence that you are using SurveyMonkey. (Really, they could have chosen a name that would make them sound less like amateurs.)
  • Higher subscription levels include simple text analysis.
  • It runs in many languages.
  • There are ‘certified’ NPS templates.
  • Lots of people use it, so lots of advice is available.
  • You can download results as Excel files for your own analysis.
  • You can send emails directly from their service.
  • If you don’t like it, don’t renew your monthly subscription.

SurveyMonkey disadvantages:

  • If you use a separate email solution, you can only provide a link to the SurveyMonkey survey in your email. There is no way of embedding the rating question in your email, so response rates will be lower (less than half) than with solutions from Medallia, Promoter.io and others that embed the rating question in the outbound message.
  • When I say the text analysis is basic, it really is basic. So is Medallia’s, at the time of writing.
  • Some tracking options are only available if you use SurveyMonkey’s outbound email service.

MailChimp advantages:

  • MailChimp lets you see who has opened your messages and who has clicked on any link they contain. This is particularly useful for A/B testing. By this I mean, for example, sending email with different subject lines to each half of your mailing list to see which subject lines get better open rates, and doing the same for different requests to take your survey. You should only change a single thing at any time to have a valid A/B test.
  • If your list has up to 2,000 customers and you want to send no more than a total of 12,000 emails per month, you can do it for free. The paid plan starts at $20 per month for 500 customers, for example.

MailChimp disadvantages

  • MailChimp tracks recipients’ actions, but does not disclose that it is doing so, at least by default. I am already aware that this has been raised as an issue with the national data privacy organization in one European Union country.

More advanced solutions

Two capabilities are the most critical when considering advanced solutions for managing NPS surveys. For clarity, I am talking about software that only manages surveys. There are of course many solutions that manage surveys together with many other things.

  1. You should embed the rating question in outbound emails to customers. This will give you double to triple the response rate, compared to sending the same survey with just a link in the email. There are various reasons for this. Given the number of phishing and ransomware attacks we hear about, people are reluctant to click on links they do not absolutely trust. It helps if the email comes from your company email server and that this is clearly visible.
  2. You need to be able to do a first-pass analysis of the verbatim answers without human intervention. I blogged about this some time ago here.

While many vendors push it hard, I am not a fan of encouraging customers to respond on a phone. The main value you get from NPS research is the answers to the open questions. I feel you should tolerate phone-based text input, understanding that it will be brief. Your outbound email should say something like “You may be most comfortable providing feedback on a PC, Mac or tablet.”

How demographics affect customer experience research – You should expect surprises

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It is tempting to keep feedback requests very short to improve completion rates and avoid wasting customers’ time. However, I have yet to see research where demographics did not make a difference. Sometimes the differences are surprising.

What we mean by ‘demographics’

Demographic information is that which you use to categorize responses. Of course you should never ask people to provide the categories if you already have the information. For web-based surveys, the categories you don’t already know about are normally provided using pull-down menus. Examples are things like these:

  • For product surveys, responses may vary depending on whether the respondent is a purchasing decision-maker, an influencer or an end user. Respondents are asked to self-categorize.
  • For employee surveys, whether the person works from home, the office or is always on the road may matter.
  • For a survey about a software product, it is useful to know what version of the software the customer is using. People using older versions of software may provide improvement suggestions that have already been implemented in the more recent versions. It is then easy to provide instant feedback and make them happy.

Gender matters

Even in B2B environments, women often provide different input to men. You should be able to do the demographic split well enough using people’s names, if you have a few hundred responses. In HP’s research on consumer printers, women mentioned ease of use and overall quality twice as often as men as a reason for recommending the printer. Men mentioned the price of supplies, low ink consumption and value for money twice as often as women. In short, the survey showed that women care about different things than men. It changed the messaging and marketing we used, as well as the training given to people in retail stores.

An example from a student survey

A Swiss business school did a simple NPS survey among its students. Once again, women and men scored quite differently depending on where they lived. Women living at home were far happier than male students living at home (meaning with their parents). This was not expected. It was pure chance that the survey owner decided to look at gender as a factor. The full range of NPS differences by demographic is shown below. Respondents with the attributes towards the top-right gave the highest Net Promoter Scores.

Demographic effect on NPS

The survey owner used the information to propose a series of actions. For example, the unhappiest students were those who came from countries other than Switzerland or France. The proposal was a specific welcoming process for such students, including free French courses. There was no clear proposal for how to make students living with their parents happier with their lot. If you have ideas, I will pass them on. (Strangely, this was mainly an issue for male Bachelor’s degree students. Or maybe you don’t think it is strange…)

I suppose one other entertaining factoid from this survey is worth mentioning. While the beauty of the campus, with amazing views of the Alps and Lake Geneva was in the top three reasons students liked the school, half as many Swiss people mentioned it as French students. Too blasé, I suppose.

Action orientation

One last point: If you don’t already have the demographic information but it is of no conceivable use in an action plan, please don’t ask. Let’s suppose you want to know what should be improved in your commercial air-conditioning products. Asking the respondents what age they are is of almost no conceivable relevance.

 

(As is often the case, this blog post is a mildly-edited version of a chapter in one of our books. In this case the book is Customer Experience Strategy – Design and Implementation. All of our books are available in Kindle and print versions from Amazon.)

#63 – New NPS Benchmarks, don’t work for a cost-reduction company, Temkin Group posts

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New reference source of NPS benchmarks, don’t work for a cost reduction company (part 2). Welcome to the 63rd edition of my customer strategy newsletter. The five topics this week are:

  1. New reference source of NPS benchmarks
  2. More evidence that you should not work for a cost reduction company
  3. Latest blog posts
  4. Notable items from other sites – Both from Temkin Group this time
  5. Looking forward
New reference source of NPS benchmarks

Whether you use the Net Promoter Score or another system, one challenge is to know whether your score is good or bad. The best way to know is to compare your trends to those of your main competitors. (If you believe you don’t have any competitors, well… you have a different problem entirely.) But how can you make such comparisons? There are no comprehensive public databases of NPS benchmarks that have been collected in a consistent way. Yes, there is at least one site that will allow you to look at what companies publish as their own NPS number. But your number and their number will not have been collected in the same way.

The main source of NPS benchmarks up to now has been the Temkin group’s regular NPS benchmark report. This has changed. JD Edwards, ROI Rocket and Bain have teamed up and established ‘Bain Certified NPS Benchmarks’. In principle, and as originators of the Net Promoter System, only Fred Reichheld, Bain, and/or Satmetrix could possibly certify that an NPS benchmarking process is correct.

While the article does not say exactly how Bain certification works, it provides some clues. A minimum of 250 responses was achieved for each company covered. They interviewed between 3,000 and 100,000 consumers for each industry sector covered, far more than I have seen for any other study. They have collected data for “more than a dozen” industries. You will also see that their work with ROI Rocket on retailers proves the considerable spending differences that exist between Promoters and other respondents, as well as a variety of other factors.

OK, I think that is enough of an introduction. Reading the paper in detail will be a good use of your time. And by the way, the leading retailer, in terms of NPS, has a name that begins with the letter A. Read all about it here.

More evidence that you should not work for a cost reduction company

Some months back I wrote a non-customer-experience LinkedIn article suggesting that if you want to be happy, you should not work for any company whose main product/service is cost reduction. The reason I gave is that if you do so, you become the cost reduction. Take outsourcing companies as an example. Their business is offering companies cost reductions of about 20%. Examples include companies that propose to operate your IT infrastructure for 20% less than it currently costs you. These reductions can only come from three sources: capital costs – notably real estate costs, people costs, and paying suppliers less.

An article just appeared in 27/7 Wall St. that provides at least some proof for this. Entitled Worst companies to work for. it uses Glassdoor ratings as its source and excludes small companies. DXC is 12th worst. They have 150,000 employees and are the result of the merger of the former outsourcing division of HP with CSC. The main resulting business is IT outsourcing. Employees complain about absence of pay raises and bonuses, and ongoing layoffs. Alorica is 11th worst, has 176,000 employees and provides outsourced support desks for companies that want to reduce the cost of doing the work themselves. At number 8 (from worst), CompuCom has 11,000 employees and provides IT services.

There are other cost reduction and low-cost companies on the list. My message remains unchanged: If you work for one of these companies, you are a source of cost savings, unless you are at the level of the leadership team. Unless you are desperate, I suggest not working there.

 

Our latest blog posts

Here are the latest posts. Older posts are still available on the blog page.

image Improving response rates to survey requests sent by email

Way back in October last year I blogged about using direct marketing techniques to improve response rates to surveys. This post addresses five additional ideas that are specific to survey requests sent by email.
image How I got my two biggest promotions: True Stories

I was speaking to a business school student recently. She asked me about how I managed to get promoted during my career. That got me thinking… Luck and hard work…
image A legendary Mark Hurd speech to HP employees in Israel

Mark Hurd is CEO of Oracle and was CEO of HP before that. While at HP, he made many speeches about cost. His general philosophy was best illustrated by my favorite event; his speech to all employees in Israel. It was broadcast to the entire company, coming shortly after the company acquired EDS…

 

Notable customer experience items from other sites

Customer Experience Matters Blog: Introducing the Temkin Customer Success Index

Customer Success teams are common in the software industry and exist in some other industries too. For software, their work is to ensure customers actually use the software they have bought. The service is usually provided at no charge. Among other tasks, Customer Success people sit with users to observe them using the software and to determine whether they can achieve the results that were used to justify the purchase in the first place. When I worked at HP’s $4B software division we ran an A/B test where one business had a Customer Success team and another comparable business did not. The improvement in contract renewal rates made it easy to decide to expand Customer Success to all businesses. So… renewal rates were our main metric. Bruce Temkin’s team proposes a Customer Success Index based on a composite of five metrics in their latest blog. Read it here.

Customer Experience Matters Blog: Six Laws of Customer Experience (Infographic)

Two Temkin Group posts this week! (I have no connection with Bruce or his company.) The most-downloaded content on their website is a free eBook called The Six Laws of Customer Experience. It is supported by a simple infographic that I find to be both clear and useful. You can download it in various sizes here.

 

Looking forward

A relatively quiet time as summer starts. You may like to contact me if you would like me to talk to you or your teams, in person or remotely. A LinkedIn video conference or similar might be useful for one of your team meetings or training sessions.

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, with the notable exception of Australia, where print versions are not available from amazon.com.au.

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.

 

Raining surveys

Improving response rates to survey requests sent by email

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Way back in October last year I blogged about using direct marketing techniques to improve response rates to surveys. (You can find that blog here.) I would like to add some points that are specifically about survey requests sent by email. Here are five things you can do, in priority sequence. If you have other ideas, I would love to hear about them.

Let people start to respond to the survey directly in the email

By far the most important thing you can do is allow respondents to respond to the survey directly in the email they receive. Unfortunately, this is technically difficult. The best you can do is to embed the first question in the email, usually the overall rating question. Use HTML widgets to do this. They do not get blocked by the common email clients at least at the time this is written. Embedding the first question improves response rates by a factor of 2.5x, in my personal experience. Promoter.io and other software providers have found that it triples response rates. My suspicion is that embedding the first question makes it far less likely that people believe the survey link could be a phishing attack or other security risk.

Tell everyone what you have learned

Provide feedback to everyone, not just the respondents. When you have completed the survey and determined the actions, write back to the entire mailing list to let them know their voices have been heard and telling them what you are going to do. Those who did not respond are more likely to answer the next time, and could also be given a way of adding their voices immediately if they do not feel represented.

High-quality contact lists

Ensure you have an email contact list that you maintain and use regularly for customer communications. That has two main benefits, one obvious and one less so. First, you will have far fewer emails ‘bounce’ due to unknown addresses. The second benefit is that customers who read your emails will almost certainly have authorized the displaying of ‘pictures’ for anything received from your email domain. Outlook and other clients default to blocking pictures from unknown sources. You should minimize the use of pictures and other graphics in outbound emails in any case, as they present consistency challenges across phone, tablet and PC platforms. One good aspect of the new European Union General Data Protection Regulation is that email lists that respect the new rules will be of high quality, though the lists may be somewhat shorter than ones you would have had before.

Test your outbound emails

Test your outbound email with a set of internal users first, to detect problems. Send some additional test emails to internal users from a non-company email address, to see how they display if an email client blocks anything or automatically puts the email in a spam folder.

Thank people in advance for their help

While I have suggested not using strong incentives, simply thanking people in advance, promising to act and to inform them of the results should be a sufficient incentive for many, and should have a positive effect on response rates.

That’s it for the response rate improvement suggestions. Now let’s discuss ‘over-surveying’.

Risk of over-surveying

How do you know whether you are over-surveying? There are two main principles. First, you need to provide more value than you extract, which should push you towards short surveys. Second, you need to be planning to act on the feedback, including informing customers about your progress. Remember that over-surveying is about individuals, not companies. It does not matter if you send surveys to multiple people in a company. What you want to avoid is sending one individual multiple surveys in a short period of time. When thinking of this, bear in mind that your competitors may be sending surveys to the same person too.

Over-surveying may be over-rated as a problem

Let’s face it, if a customer has not responded to your survey request, they have not wasted any time, but you do not know what they are thinking. Most transactional surveys will give you a response rate between 5 and 15%. Product survey response rates can be a little higher. The people you need to avoid asking to respond again in a short period of time are those who already answered your survey. Most of your customers will not have answered. These should be the focus for the following research round, assuming it happens reasonably soon after the previous one. Write something that starts like this:

“Dear Mrs. Smith,

I realize you did not have time to respond to my request to help us improve our product when I wrote to you six weeks ago. The people who did answer helped us to determine the two items below as our top two improvement priorities. I really want to have a third project and would like to once again ask for your help. There are just three questions and this won’t take you more than about 3 minutes…”

Taking this approach improves the overall response rate, and therefore improves reliability. Make sure you don’t send these emails to people who have already answered.

More generally

If you have listened to customers, made improvements, then reported the progress back to customers, you cannot be accused of over-surveying if you start the process again. Customers will be able to see that you have provided at least as much value as you have extracted, and will cooperate. It is important to communicate your progress to all customers, not just those who responded.

[Like the majority of my blog posts, this one is a mildly-edited version of a chapter in one of our books, in this case Net Promoter – Implement the System.]

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