Virgin Atlantic

Welcome to the 25th article in my series on the Net Promoter Score and System. The subjects this time are the Outer Loop and the Huddle. You can read all of the articles here.

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.

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 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 solely 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. The diagram below is from Jim Dixon’s work and shows to combine it all into a single chart.

Use in a Huddle

If an Outer Loop team were considering the graph to prioritize improvement work, the two circles with diagonal lines 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 image below is a simple diagram that will help you to prioritize improvement initiatives based on impact and ease of implementation. In the diagram below, you would get to work on the ones in the top-right box right away. This example is from a survey of Swiss business school students.

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

Next time

The next article will provide suggestions about activating Promoters. These are the people who have said they definitely would recommend your company. How can you help them to actually do so?

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.

Welcome to the 24th article in my series on the Net Promoter Score and System. The subject this time is the Inner Loop; the process for quickly addressing the concerns of individual customers. The ‘class issues’ that affect whole categories of situations and customers will be covered next time, in my article on the Outer Loop. You can read all of the articles here.

Your reliable trusted 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: transactional surveys. A service agent in your technical support team has just finished a call with a customer and closed the incident in your CRM system. The system automatically sends a feedback request to the customer. (The service agent has of course told the customer to expect it.) Surprise, the customer says their problem was not solved, but they were able to find a different way to solve it 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. Maybe that contributed to Sabena’s financial issues and its ultimate disappearance from the market.) 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 teammates doing the same type of work. Teammates 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.

Don’t be afraid to over-recover Detractors

When I joined the DEC Software Product Group in Geneva, we had to travel regularly to Boston. There were no non-stop flights, and we tried a variety of airlines. The team favorite quickly became the relatively new Virgin Atlantic. To get to Boston, we transited via London’s Gatwick airport. We all loved the airline’s ‘Upper Class’ and were rabid Promoters, often asking other colleagues why they would go any other way. I am sure we contributed lots of money to the Virgin bottom line.

After about a year of this, one of my colleagues, Peter van de Moosdijk, had a relatively serious incident. His flight from Boston to London was delayed for three hours due to a technical issue. Virgin realized that it was the middle of the night back in Europe and handed out a form for each passenger to fill in, saying whom they wanted Virgin to contact in the morning and what they should say. Peter filled out his form and boarded the delayed flight happy that his wife would know that he was going to miss the connection in London and would take a later flight.

He phoned home on arriving in Gatwick, and spoke to his panicking wife, who had been to Geneva airport to pick him up, and had heard nothing. The following day, Peter wrote a (paper) letter to Virgin’s CEO, Richard Branson, recounting what had happened and saying that this was not what he had grown to expect. Three things then followed. I particularly like the first:

1. A few days later, the doorbell rang while Peter was at work and his wife was at home. Virgin had sent her a huge bouquet of flowers and a card with an apology. I feel this demonstrated a rare level of insight about who actually had the problem. Not their customer.
2. The following day, a letter arrived, apparently signed by Richard Branson (or someone who could copy his signature). He said that what had happened was unacceptable, and that he had sent a copy of Peter’s letter to every Virgin office in the world to ensure it would never happen again.
3. At the time, Virgin was the only European airline with a frequent flyer program. Peter’s account was credited with enough miles for his family to go on vacation in California the following summer.

Now that’s over-recovery. Rather than talking about the negatives, Peter, his colleagues and friends all wound up being Promoters, telling this story over and over again. Our manager even attended a customer experience event hosted by British Airways. He asked whether any of the BA people had flown with Virgin and they had not. Then he told the story. Silence in the room.

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 normally 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.

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.

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

Next time

The next article will be about the Outer Loop.

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.