It’s Not the Number Stupid: Net Promoter® is not a Numbers Game

   by  DonkeyHotey
   by  DonkeyHotey

Creative Commons Creative Commons Attribution 2.0 Generic License   by  DonkeyHotey

I’m sure you’ve heard of Bill Clinton’s famous, but unofficial, 1992 campaign slogan: “It’s the economy stupid”. His chief of staff wanted to focus everyone on what was most important in the run up to the election.

That was a great approach but today I’m championing an anti-version of that slogan:

Net Promoter – it’s not the number stupid! [Tweet This]

The reason is that recently I’ve had several conversations with senior managers of small, and not so small, businesses, which are looking to implement Net Promoter.

Great idea, until they tell me it’s with the specific purpose of tracking the performance of their staff.

Typically these businesses have grown to the point where senior managers are not able to be everywhere at once. They worry about company reputation as they grow increasingly disconnected from the day to day interactions with customers.

This increasing distance is not bad per se, there are only some many individual customers the CEO of a major bank can meet in person. What is bad is trying to insert a metric (any metric) into to the process with the idea that it will keep everyone in line.

True, on the surface it seems quite rational; run a transaction survey, associate the relevant (sales, support, etc.) staff with the response and then report on the individual’s score. Use the score to hand out bouquets or brickbats at the end of the quarter or year. We do it with sales, why not Net Promoter Score?

Because it’s not the same. Sales are an absolute number. Net Promoter is not because it is assessed subjectively by people and surveying, so it it subject to a range of sample size caveats.

Net Promoter is a great tool but great tools can be used to cause great harm when applied in the wrong way. Just ask Alfred Nobel about the invention of Dynamite.

Here Are the Problems With A Simplistic, By The Numbers Approach

Score begging

The problem with focusing the entire organisation on just the score then doubling down by including it in the bonus system is that it drives the wrong behaviours.

You might think that providing a front line sales employee with a bonus for a high personal NPS make them focus on improving their score.

And it does. So, what is the easiest way to improve the score – just ask the customer to rate them highly when they receive the survey. It’s called score begging. Simple and worthless to the business.

If you doubt this happens just listen the next time you pick your car up after a service. In many cases you will be asked directly or indirectly to give the service a “9 or 10” in the survey. Or, the next time you stay in a hotel, check out the variety of ways they beg for scores.

Not only do these tactics make customers feel uncomfortable but you lose all value in the information you are receiving.

Is that 10 a “real” 10 or a “10 that should have been a 7”. Now all of your data is tainted.

The Focus Should be on Improvement

Improving your score by asking the customer for a better number, does not drive ongoing improvement in the business. By taking the shortcut you have lost your ability to understand how to make change and drive improvement in the business

Systems Drive Most of Your Score Not Staff

With very few exceptions, your business systems, not individual staff, drive the majority of the customer experience in a business.

Most staff are looking to do the right thing by the company and its customers. If they are unable to deliver an excellent service it is not normally because they are unwilling but because they are unable due to company systems.

Put another way, focusing on motivating staff to somehow do their job better drives much less improvement in Net Promoter, or customer satisfaction or Customer Effort score, or whatever other metric you want to use, than driving change in business processes.

How to Do It Right

Report Mostly on the Improvement Process

You are probably already (or planning to) report the NPS® or customer satisfaction score in the weekly, monthly , quarterly management report. That’s good because you need to track where you are but you need to lower the focus on the score and elevate the importance of the improvement projects.

This can be done by simply reporting on, at the same level and in the same place, the continuous improvement projects that the data from the voice of the customer process is creating.

In the reports you can, and should, include information on the expected ROI of the improvement process.

This will change how people view the score from a retrospective tracking of performance to a proactive way to drive change in the business.

Target Response Rate Not NPS for Front Line Staff

Instead of giving front line staff (customer service, sales, support, etc) an NPS target, give them a response rate target. That way they don’t have to beg for scores and it shifts that focus to collecting as much information as possibles.

Staff will stop asking for a 10 and start asking just for a response, which is what you really want.

Drag Your Feet Adding NPS Targets to KPIs

To me it’s simple: if you don’t include NPS in the company KPIs and show that it is at least as important as revenue and profit staff will never become engaged. They will forever see NPS as something nice to have but when it comes to deciding where to spend their time its revenue and profit this quarter that matters.

However, add targets to your KPIs too quickly you will make one or both of these mistakes:

1. You Will Set The Target Too High

Many, many times senior managers caught up in the excitement of Net Promoter will set targets almost as soon as the first survey responses come in. In their excitement and with their lack of insight into how the score will evolve, they set targets that are too high, normally, way too high.

Wait for a few months, six at least, before setting Net Promoter or Customer Satisfaction targets. Report and track the data from day one but don’t add targets until much later.

2. You Will Not Know How To Change It

If you set targets without out knowing what drives the score it’s just a lottery.

The problem with lotteries is that you can’t develop a strategy or action plan to succeed, beyond buying lots of tickets and crossing your fingers. Nothing you can do will change the odds of success.

In this situation staff engagement with the idea of Net Promoter and continuous improvement will plummet because they can’t see how they can impact the outcome. So it becomes a number they can ignore. If they win the NPS lottery great, if they lose there was nothing they could do about it anyway.

Take a Step Back

So, take a step back for a few minutes right now.

Why are you implementing your customer feedback process?

If it’s to drive continuous improvement in the customer experience, that’s great. If you are simply trying to look over the shoulder of each employee as they engage with your customers, maybe you need to review things a little.

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Innovation is not just a Product Game; it’s also a Service Game

   by  symphony of love

This week we have a guest post from Janine Scott. Janine is the Regional Manager for Customer Experience with Wolters Kluwer. As someone who works in the business, Janine has some great insights and today she discusses innovation in service businesses.

Take it away Janine…

 

Quality or Quantity; which strategic position should your company take?

It’s a question that has been widely debated for some time and unfortunately doesn’t come with a one size fits all answer.

For the purpose of this discussion we are defining;

  • Quality” as a low volume, high touch and ultimately high cost to service model; and
  • Quantity” which supports higher volumes with a lower touch and lower cost to service model.

Each business must pick its strategy based on a number of factors within their own environment and on an overarching longer-term vision.

What is of most importance is to pick the strategy that best works for your business, and be a slave to it. You must be relentless in your ambition to execute. This is where the real differentiation comes in.

Unfortunately, many organisations lose their way and blur the boundaries between the two competing visions, leading to a confused strategy; internally and externally.

Service Innovation Plus Product Innovation

Regardless of which you select, to execute your strategy in this day and age of innovation, you will need to think outside the box.

We hear about this being the era of the customer — they expect more, demand more and will not settle for less. Whatever path you select, you will need to give some creative room to innovation to deliver the desired outcomes.

For many people, ‘innovation’ has become a bit of a buzz word, and is often taken to be product innovation — the iPhone, GPS, Robot vacuum cleaner (a personal favourite).

So what does this mean for organisations that have a strategy, less focused on the production of widgets, and more focused on providing a service offering?

If you step away from the world’s latest buzz word for a minute to look at what innovation means at its core:

Innovation is bringing to life creative ideas linked to performance improvements in efficiency, productivity, quality, market positioning, and sales execution.

The ideas we seek to improve our organisation need to come at both ends of the customer experience journey, not just the product development area.

The Quantity Path

For example, let’s take a look at the Quantity Strategy; attracting a broader, mixed market share does not have to mean a sacrifice in quality. You just have to be creative about where you innovate.

In this case you need to make the product or service offering simpler or more intuitive. It cannot require the skills of a consultant to step through, as the cost to service would constantly challenge the profitability of your offering.

Also very important in this Quantity space is to be innovative about how you set expectations about your offering. How do you reinforce these in the market so that the customers’ expectations are aligned with those set by you in the marketplace?

Roll that through to the back-office areas and, to eliminate the need for a dedicated relationship manager for every single customer, create online communities, self-help centres, click to chat, log a call … The list goes on.

These are low-cost service options that, when executed effectively, can deliver a great customer experience, providing the other pieces are all in complete alignment.

The Quality Alternative

On the other hand, if you prefer to take the focused path with a more quality-based premium-cost relationship, then you may need to consider how innovation can be expanded into more obscure areas.

For example, the cost to service a Quality relationship is going to be higher, even allowing for the above technology options. But even so, you have to be very careful. Your brand promise and your product or service promise will specify different expectations at this end of the customer experience journey.

If we assume a higher cost to service is required here, then you need to look for innovation to help support that higher cost. Your fees and charges will provide coverage to a large extent. You never want to be in a position of looking to your service delivery functions for cost reduction. So companies sourcing innovative ways to boost profitability are becoming more common.

For example, some organisations are acquiring businesses which seem on the surface to be quite obscure in relation to the core strategy, but which provide innovative solutions to cost improvements or other efficiencies.

Whatever strategy you select — differentiation or cost leadership — there is a common tool: innovation. Innovation supports the journey to success through the end-to-end customer experience journey, customer insights or the voice of the customer.

Any innovation that doesn’t originate from the voice of the customer is flawed from the outset. Let your customers tell you which areas they find valuable and which areas they desire improvements to, and ask them for this feedback regularly. Build these insights into part of the everyday innovation process and you might just be surprised by the outcomes.

janine-scottAbout Janine Scott

Janine Scott is Regional Manager for Customer Experience with Wolters Kluwer, CCH, where she is responsible for designing & implementing best in class customer experience framework and programs across the entire customer contact and support value chain within the Wolters Kluwer APAC business

Check out Janine on LinkedIn or email her at: Janine.scott@cch.com.au

 

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Struggling to Act on Customer Feedback? Try This.

Source: Temkin Group Q2 2012 CX Management Surveys,  © Temkin Group

Less than one in seven companies that collect and use customer feedback are running the process effectively.

Most are missing the key, and only useful, part of the process: taking action to improve their business. Many times though it’s not missing out of choice but because organisations do not know how to drive action in the business with customer feedback data.

Source: Temkin Group Q2 2012 CX Management Surveys,  © Temkin Group

Source: Temkin Group Q2 2012 CX Management Surveys

[Read more…]

The Science of B2B Retention Selling

How to predict which clients you will lose (or will spend more)

Are you confident in your post-sales team’s ability to secure renewal business?

If you have a “land and expand” strategy, do know when you can expand your business in a given client?

We will explore these questions, example cases studies and provide some practical approaches in this informal breakfast session. [Read more…]

Why is More Important than How In Customer Feedback

Why? by BuzzFarmers, on Flickr
Creative Commons Creative Commons Attribution 2.0 Generic License   by  BuzzFarmers 

Why is a very powerful word.

One of the most popular Ted talks of all time, over 19 million views, asks you to start not with the how of your business but the why of your business.

Why asked 5 times is the basis of the incredibly powerful 5 Whys root cause analysis technique.

Young children find out how the world works by asking why a seemingly endless number of times.

So when you are considering investing considerable time and resources in rolling out a new customer feedback or Net Promoter® program you should make sure that why is the first question you ask as well. [Read more…]

The Ultimate List of Net Promoter® Best Practice Tips

tweet-button-01-sm
Automate your process

Automate your process

Net Promoter was launched in 2003 and since then many, many organisations have used the methodology to drive change in their business. With so much time invested, lots of lessons have been learned.

So you don’t have to re-learn those lessons the hard way I’ve pulled together this massive list of Net Promoter best practice tips.

Note that these tips pretty much apply to any Voice of the Customer or Customer feedback (but not market research) process. So regardless of whether you are using Customer Effort Score, Customer Satisfaction or NPS® you can apply them to your business. [Read more…]

Net Revenue Score is not a new Net Promoter Score®

I’m always open to a debate on the pros and cons of any business approach but it’s better if the person on the other side has done their research. That way we can have a thoughtful debate.

Unfortunately John Greathouse has jumped to a few conclusions when he penned his article in the Wall Street Journal: Startups Should Focus On Their NRS — Net Revenue Score. There are quite a few items that need review including: [Read more…]

Want to build trust with your customers? Recommend a competitor.

Harry Antrim as Mr. R.H. Macy

Amy Scott sent me through her Christmas article and I liked it so much I asked her if I could publish it on the blog. Luckily her answer was yes so everyone can benefit.

Over to you Amy…

Want to build trust with your customers? Recommend a competitor.

When you first see this you must be thinking “Are they crazy why on earth would I want to give business to my competitors?”

But this isn’t as daft as it sounds. [Read more…]

Predicting American Airlines’ Net Promoter Score® Using Twitter

ohw_airlines

In this recent post by Fonolo American Airlines was hammered for having an outstanding (in a bad way) number of Twitter users complain about being on hold with them.

This got me to thinking:

How good is crowd data at predicting the Net Promoter Score for an organisation?

As it turns out it’s a pretty good indicator so let’s review it in detail. [Read more…]

Zappos Service is for Zappos, not You

pizza625

We’ve all heard the stories of famously customer focused organisations where staff have gone wildly above and beyond customer expectations to create raving fans.

At Zappos, one famous (albeit perhaps apocryphal) tale is the story of a customer service person having pizza delivered to customers who were sitting online talking to their contact center. [Read more…]