How To Drive Customer Experience Innovation Using Transactional NPS

December 6, 2011 By 1 Comment

innovationI wrote recently about how engineers in process plants are never happy with the status quo. They are always looking for improvements and tweaks to the manufacturing process that can drive incremental improvement in profit and efficiency.

This post is about how you can use Transactional Net Promoter Score to do the same thing for customer loyalty, through its key driver; customer experience.

Two types of innovation

Lets start by identifying two key types of innovation: discontinuous and incremental.

Discontinuous innovation creates whole new genres or products: think T-Model Ford replacing the horse, the Sony Walkman creating a whole new product category, the IBM PC. Discontinuous innovation generates major leaps forward but is relatively rare and risky.

Incremental innovation slowly but surely improves a product or category. Incremental innovation is how the car went from the T-Model Ford to the F1 racing car we see today. All the key features of the T-Model are present in the F1 racing car, they are just much, much improved. A million small incremental innovations over 80 years has generated a product that is essentially the same but completely different.

The simple truth is that while discontinuous innovation is sexy, it is also risky and rare. Incremental innovation is less exciting but very low risk, and generates enormous value day in and day out.

Driving incremental customer experience innovation

So how do engineers drive incremental innovation? Not by focusing on the whole process but by breaking it down into sub-areas areas and focusing on the worst performing areas first. To identify the worst performing areas, and how to fix them, engineers then use systems that collect thousands of measurements from all over their manufacturing process.

This very same process can be used to drive incremental innovation in your customer experience. Simply swap the industrial manufacturing process for the customer experience (where we manufacture customer loyalty) and the Transactional Net Promoter Score process for the engineer’s temperature and pressure sensors.

From a practical perspective you can achieve this by breaking your customer experience down into distinct touch-points and sub-processes and then apply Transactional Net Promoter Score to collect data at each of the touchpoints.

Start with the worst

Now you have a series of customer experience manufacturing steps, each with it’s own customer experience sensor to collect data about what works and does not work. Using NPS you can now rank the customer experience manufacturing steps from best to worst; highlight the pain points and focus on those areas that most need attention first.

Put simply; the touch-point with the lowest NPS will be the one that is performing the worst, and the one that you need to start work on first.

If you have implemented Transactional Net Promoter Score correctly you will also have a range of other diagnostic information to let you know what is wrong with the touch-point and how to fix it. It is then up to you to apply the current quality system toolkit that your organization uses (Six Sigma, Lean Six Sigma, etc) to take this information and drive change.

Customer Experience a Process not a Project

Once you have improved the worst touch-point you can move on to the second worst touch-point and repeat the process. Now you can see that customer experience is not a project but a process. It is a never ending cycle of incremental innovation that can and will move you a long way from your Model-T customer experience to a Formula 1 customer experience.

More Information

For more information on Net Promoter Score and how/why it works download our free Introduction to Net Promoter Score (NPS).

If you are thinking about implementing Net Promoter Score (NPS) in your organisation give us a call. We can help you to implement an effective Net Promoter Score customer needs survey program for your business.

Net Promoter, Net Promoter Score and NPS are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.

By Adam Ramshaw

Filed Under: Best Practices, Customer Experience Management, Customer Feedback Process, Net Promoter Score Tagged With: ,

Do Your Customer Experience Initiatives Have These Flaws?

November 29, 2011 By 1 Comment

It seems to me that many customer experience initiatives are deeply flawed. They start out well intentioned but lack the right process improvement mindset to drive long term change.

The customer experience strategy that seems to be best practice at the moment is:

  1. Do some research on what people want: ask a focus group, run a survey, etc,
  2. Design “the best” customer experience based on the research.
  3. Test it in a limited way –asking people what they think, doing some usability testing (i.e. watching what people actually do either actually or via analytics) of your systems.
  4. Roll-it out.
  5. Relax

The critical part is that the design process (steps 1 and 2)  is run only once. Then, having agreed that it is perfect just let it run. This is wrong.

I spent 10 years working in the industrial process control industry. Let me describe how a completely different type of business runs a very similar process in a completely different way.

Consider a manufacturing plant, say an Oil Refinery. In many respects it goes through the very same process:

  1.  Do some research: engineers gather information about the industrial manufacturing process based on relatively well known chemical and physical processes.
  2.  Design the plant: based on the specification and the research, design an appropriate plant.
  3.  Test it in a limited way: often for a new types processes a smaller pilot plant is created to test the idea.
  4.  Roll-it out; Build the full scale plant and start manufacturing. This is often a long and complex task, especially in the case of an Oil Refinery.So far it’s all the same.
  5. Relax Start the work of improving the design of the plant. As soon as the plant is up and running, engineers are looking for ways to improve performance. They have banks of feedback data from sensors all over the plant. Using that data and starting on day one they are trying to work out how to improve production to more than 100% of rated capacity.

This last step is missing in many organizations working on the customer experience. They may design and build lots of different areas of customer experience but this continuous improvement piece is missing. There are two issues that prevent the last step form occurring:

  • The lack of a continuous improvement mindset
  • The lack of real-time feedback data.

Continuous improvement mindset

Engineers are trained to look for problems and fix them. “If it ain’t broke don’t fix it” just doesn’t apply. Continuous, improvement within the process parameters that currently exist, is the order of the day.

You can think of it as a giant test and learn process. You wouldn’t think of running your next direct marketing campaign through a one off design and go approach so why are you trying you do it for your customer experience.

No, instead you constantly test different copy, layout, offers etc.. It should be exactly the same for the customer experience. Never be happy, always be looking for an extra 1% improvement.

In truth this can be hard to do in a customer experience process because of the lack of real time feedback data.

The lack of real-time feedback data

Engineers have access to an extraordinary array of feedback about the manufacturing process. Every pump, valve, heater, switch, etc is monitored in real time and it’s history tracked by the second. That is literally thousands or tens of thousands of separate measurements and history with which to work.

In customer experience what have you got: an annual survey of a small proportion of your customers and a few paltry complaints.

[You also have contact centre reports, sales figures, and web logs but these are indirect measurements.]

At least that was what you use to have. Enter Transactional Net Promoter Score. The customer experience equivalent of all those sensors.

Transactional NPS allows the customer experience professional to get a real time view of the quality of the product that is being manufactured, sorry customer experience delivery, sorry loyalty of the customer. In this case the product being manufactured is loyal customers.

Transactional Net Promoter Score As Your Customer Experience Strategy

But TNPS is more than just a measurement it is also a continuous improvement process. Yes the “would recommend” question is the most well known element of NPS but there is also a full change management, continuous improvement element present in best practice Net promoter implementations.

This means that Transactional Net Promoter Score can be the Customer Experience Strategy for your business. By implementing TNPS you get your customer experience strategy included. No extra charge.

In a future post I’ll expand on exactly how to use Transactional Net Promoter Score to drive business improvement.

More Information

For more information on Net Promoter Score and how/why it works download our free Introduction to Net Promoter Score (NPS).

If you are thinking about implementing Net Promoter Score (NPS) in your organisation give us a call. We can help you to implement an effective Net Promoter Score customer needs survey program for your business.

Net Promoter, Net Promoter Score and NPS are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.

By Adam Ramshaw

Filed Under: Customer Analytics, Customer Experience Management, Net Promoter Score Tagged With:

Net Promoter Score Success Stories and Case Studies

May 12, 2011 By 2 Comments

Demonstrating the success of the Net Promoter Score methodology to skeptical senior management can sometimes be difficult.  It is especially so if you are trying to prove it before your organisation has implemented any changes.

One way to prove the value of NPS is to use external success stories and case studies to show what has been done by other organisations.  Unfortunately, finding those case studies can be very difficult.

To try to overcome this issue I have decided to create a list of case studies and references that are public domain.  This blog post will be updated whenever I have new material.

This is an adjunct to my other source list post: Net Promoter Score Research: the “for” and “against” list

If you have results or a link to a published article, presentation or other source please use the comment box below to let me know and I’ll add it to this list so we can all benefit.

NPS Improvement Statistics: Case Studies and Success Stories

Statistic 1. Business Telco provider used NPS process to increase orders by 150% [1]

Statistic 2. IT Product Supplier used NPS process and identified new opportunities in 39% of follow-up meetings [1]

Statistic 3. IT Vendor used NPS process and doubled growth rate in accounts that participated [1]

Statistic 4. Customer Experience affects the bottom line: Annual revenue change from a modest shift in customer experience for a $10billion company [2]

  1. Buying more products: $64million
  2. Reduction in churn: $116 million
  3. Word of mouth $103million

Statistic 5. Global Comms business identified the need to improve order processing that increased loyalty and improved margins.  Increased sales by 13% in a single digit growth industry. [2]

Statistic 6. Global B2B has a quarterly review of results and action plans with Executive team, team leaders, sales leaders.  Achieved 100%+ increase in loyalty, double digit growth in mature market [2]

Statistic 7. Global Facilities company has improved retention rates by 46%, using NPS process [2]

Statistic 8. The image below shows a chart of Customer Lifetime Value Vs. NPS.  If you review it you will see that the Promoters (9 or 10) make up 40% and Detractors (0-6) make up 24% of the highest value group.

Statistic 9. The chart below shows that Net Promoter Score and Ratings are mostly correlated for A&E Television shows.  Low NPS drives Low Ratings, High NPS drives High ratings. [4]

Statistic 10. A major Telecom company was able to deliver a 25 point increase in NPS which lead to a 3% reduction in early life churn and a 5% increase in first call resolution. [5]

Statistic 11. The chart below shows that Allianz operating units with a high NPS have a higher overall compound annual growth rate (CAGR) than those with lower overall NPS scores.[6]

Statistic 12. The chart below shows that in stores with a high NPS customers bought one or more product 20% more of the time than stores with a low Net Promoter Score [7]

Statistic 13. Swiss Re found that there was a clear relationship between NPS and Long-Term Rate Adequacy.  Strong Promoters (100) pay about 5% more than Passives (0) and 10% more than low Detractors (-100). [8]

Statistic 14. eBay found, see chart below, that the average GMB (revenue score) is consistently higher for Promoters than Detractors, across their 6 top markets. [9]

Links to Source Documents

Some of these documents may require you to have access to a specific site.  We cannot help you gain access to those site(s), you must do so yourself.

[1] Satmetrix, Improving Net Promoter Scores in Business to Business Relationships Net Promoter Conference 2009

[2] Forrester via Satmetrix, “Building the Foundation for an Action Oriented Net Promoter Programme” Net Promoter Conference, June 2010.

[3] Federico Cesconi, “Using the Power of Customer Follow-up to Reduce Churn and Improve Customer Value”, June 2009.

[4] Lee Boykoff, “A&E Television Networks – Boosting Return on Ad Spend and Consumer Engagement with Advanced Net Promoter Segmentation.” 2008

[5] ResponseTek, “Major Telecom Company Increases NPS® by 25% in 100 Days” RT Case Study TopTelcom 062810, 2010

[6] Allianz, “Capital Markets Day 2006”

[7] Satmetrix, James Young, “Improving you NPS through service and support”, June 09,

[8] SwissRe, Steve Dee, “Swiss Reinsurance – Keeping the End Game in Sight – NPS as a Leading Indicator of Profitability and Growth” January 2009

[9] eBay, “eBay – Making it Work – What Your Data is Really Telling You”, 2009

More Information

For more information on Net Promoter Score and how/why it works download our free Introduction to Net Promoter Score (NPS).

If you are thinking about implementing Net Promoter Score (NPS) in your organisation give us a call. We can help you to implement an effective Net Promoter Score customer needs survey program for your business.

Net Promoter, Net Promoter Score and NPS are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.

By Adam Ramshaw

Filed Under: Case Studies and Statisitics, Net Promoter Score Tagged With:

Employee NPS: Are you using this valuable Employee Engagement tool?

April 18, 2011 By 6 Comments

The term Employee Net Promoter Score or eNPS is seen increasingly often in company reports, but what is it and should you use it?

Since late in 2003 Net Promoter Score and the Net Promoter Score process have been used by an ever increasing number of companies as a way to measure and improve customer loyalty.  Recently the concept has been extended by a number of organisations (Vodafone, Symantec, Atlas Copco, Holcim to name a few) to measure Employee loyalty and employee engagement.

Employee Net Promoter Score is based on the NPS process with a slight change to the question and respondents.  eNPS asks employees:

How likely are you to refer <Company> as an employer to friends and associates?

For more information on Net Promoter Score and how/why it works download our free Introduction to Net Promoter Score (NPS).

The reasons to use eNPS are based on two simple assumptions:

  1. Higher employee loyalty leads to lower costs: Overall if a company can reduce involuntary employee turnover, then costs and productivity will improve.  Many companies already target ways to reduce  involuntary turnover as they know it reduces recruitment and training costs.  eNPS offers another tool to understand what employees are thinking and develop ways to drive higher employee engagement.
  2. Higher employee engagement will drive higher customer loyalty: There is a reasonable amount of research and empirical studies that show a linkage between happy employees and happy customers.  This linkage is reinforced in the upcoming Ultimate Question 2.0 book. This book is co-authored but Fred Reichheld, one of the instigators of Net Promoter Score. In the new book the term Promoter Flywheel (sm) has been coined to cement self-reinforcing effects of employee loyalty and customer loyalty.

In both of these cases eNPS enables the organisation to track and understand how loyal employees are and make business changes to improve that loyalty.

eNPS Pros

There are a range of pros for using eNPS as compared to a traditional omnibus employee survey.

  1. The eNPS question is easy to understand and ask.  One of the key reasons that for the success of NPS is that it is easy for people to understand.  This is true also of eNPS.  Most companies that track employee engagement use larger annual omnibus surveys.  While this approach can give a very accurate reading it is often difficult for the staff in the organisations to interpret and action the survey results.
  2. Lower cost: Compared to proprietary omnibus surveys, eNPS can be less expensive to implement.  The basic question can be asked by any organisation and the analysis is simpler and easier to perform.
  3. Consistency of message: As the eNPS hooks into the same idea as NPS, it’s a natural extension for any organisation that is already using NPS to drive customer loyalty.
  4. Can be used in a Transactional survey format: Given an organisation of a large enough size, eNPS can be implemented in a transactional format.  This entails surveying employees at key points along their relationship with the company: hiring, performance review, start date anniversary etc.  The benefit of performing the survey in this way is that the company receives a constant stream of feedback from staff.

eNPS Cons

Unlike the extensive set of research on Net Promoter Score there is currently little published validation of the eNPS linkage to employee loyalty.

This is not to say that no links have been identified, some companies are reporting a link between eNPS and other important KPIs:

Since quarterly tracking began, Celanese has seen its ENPS steadily increase, from -8% to -3% to 7% to 24%. Further, KPIs have also improved, with turnover dropping by half, for example.
(http://blog.vovici.com/blog/bid/19085/Employee-Net-Promoter-Score)

Where to next

If you haven’t considered using eNPS in your business then perhaps you should.  The incremental cost of performing the survey is not high and the benefits may turn out to be great.

Are you using eNPS?  What are your thoughts on it’s effectiveness?

Net Promoter, Net Promoter Score and NPS are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.
Promoter Flywheel is a service mark of Bain & Company, Inc.

By Adam Ramshaw

Filed Under: Net Promoter Score Tagged With: ,

Surveys for Customer Satisfaction: Do you make these mistakes?

April 11, 2011 By 3 Comments

Because I’m in the industry I, maybe like you, take all the customer feedback surveys that I can, to see what organisations are doing, what works and what we should avoid doing.

Rather than keep this information to myself I’ve decided to post the reviews here.  In this series I’ll review a survey that I’ve received and deconstruct it.

For the most part I’ll delete the company name.  I don’t see any need to “name and shame” organisations who are at least trying to collect customer feedback.  Most often it is their advisors (research providers and related companies) that are letting them down.  These are the organisations that are paid to know the best practices but depressingly often don’t.

Background

I contacted our web-hosting company a few days ago on a small issue.

The service was for the most part prompt (although I spent a little too much time on hold), accurate, and good natured.  All in all I was happy.

Survey Good Points

  1. The survey was delivered the next day:  Good transactional survey practice is to get feedback from people soon after an interaction so this was done just right.
  2. It was short: the survey itself was only four questions, plus a sevice recovery question.  That it was short was good, that the questions could have been better (see below) was not.

Could improve points

The survey invite was not personalised

Rather than have my name at the top of the survey there was a generic: “Thank you for contacting…”  They know my email address so a little first name personalisation would not be that hard.

The sign-off came from the very personal “Customer Service – Leadership Team”

Hey, we all know that these emails are automated but if you put a (real) person’s name at the bottom of the email then staff and customers will feel much more strongly that the feedback will be used, i.e. the buck stops with signatory.

Question “1.  As you interacted with us last month, how would you rate our Customer Service Support?”

Fine, but I would go with the Net Promoter Score question.

Question “2. How proficient was the consultant who assisted you?”: Well Above Standards to Well Below Standards

Hmmm… not really sure how to answer that.

Do you mean my standards or your standards?  Even the word “proficient” is difficult in this circumstance.

Questions “3. Purpose of your request?”

This is one of my pet peeves with surveys: don’t ask what the customer has a right to expect that you already know.

The company obviously has the ability to extract my email details from their systems.  Why couldn’t they also extract the reason code for the call, as entered by the agent?

Not only is this a negative for the customer survey experience but if they don’t ask this question they could ask a more important question and still keep the survey short.

Question “4  Please select one of the following to provide feedback on the highest priority area for us to improve our service delivery”

Customers have great difficulty in objectively determining what is important in the customer experience.  Asking them in a simple “select one” question is almost never reliable.  Plus you’ve used up another question spot that you could get more value from.

Question 5 “If you feel that your enquiry is unresolved with Company X, please provide us with your contact information, and one of our senior representatives will contact you to investigate and resolve.”

This is a good effort to start the service recovery process.

But again why are you asking me my name, phone, email (hey you just used that to contact me), etc ,etc.

I may be labouring the point but don’t ask what your customers have a right to expect you to know.  This is asking the customer to invest their time to do what you are too lazy to do.

What’s missing: any sort of qualitative feedback.

All of these quantitative questions are great and make for lots of cool charts.  They can tell you WHAT needs to change but they don’t help you to understand HOW to change.

Only qualitative questions (or lots of quantitative questions) can do that effectively.

My approach would be to replace questions 3 and 4 with “So tell us the most important reason that gave us that score.”  Then at least you would have some powerful statements in the customer’s own words to drive change in the organisation.

Have you seen a good or bad example of a survey recently?  Contact me via the comment box below and we can deconstruct it for everyone else to learn from.

Want to learn more about how to implement an effective customer feedback system?  Download our report.

Net Promoter, Net Promoter Score and NPS are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.

By Adam Ramshaw

Filed Under: Customer Feedback Surveys, Net Promoter Score Tagged With: , ,
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