When implementing a Net Promoter programme, many organisations grow impatient. The initial business case may look compelling, but it may take months or even years before the results from acting on customer feedback show up in the (financial) numbers.
You can address part of this impatience by clearly managing expectations on what the programme can and cannot deliver in each stage of its development. But you can also plan for quick wins which you can pace across your first year (or even 100 days) of NPS implementation.
Just for inspiration, I’ve jotted down a few that served me well over the years.
1. Create rapid improvement projects
While it is important to focus on the big wins that truly drive recommendation in your business, the small wins can be important too. Especially if they are quick & easy to achieve. They give people a sense of progress and achievement.
So when the first data start coming in, do look for the big hitters, but also check for quick and easy fixes to customer issues. Once they lead to an initial small success, give it all the internal PR you can muster. Once people see that this NPS thing can really make a difference, they’ll be much more supportive.
2. Report in actual customers, not percentages
No matter how much you’ll say that It’s not about the score, that’s exactly what people will look at. But numeric progress in the Net Promoter System can be erratic. Sometimes scores jump, often they crawl (or drop in spite of your great efforts).
This may make them abstract and hard to manage. While you may get all excited about a 1,5% jump, the rest of the business may not really be equally impressed. I found that rather than talking about percentages, it sometimes helps to report about “actual number of people”. After all, doesn’t it sound a lot better if you replace the 1,5% statement with the message that “this month 270 people were not upset with us any more and 350 more started loving us”.
3. Make money with promoters
While the first two suggestions can to make people feel good about the progress achieved, they don’t often translate into the most attention-grabbing variable: money.
One of the most effective mechanisms I’ve seen to achieve this in the short run is to avoid the trap of only focusing on detractors, but also making sure that promoters are clearly in your scope. Actively developing programmes to turn their intention to recommend into real business opportunities (i.e. cash), will infuse a positive message into your Net Promoter programme AND show your colleagues the money.
4. Lost sales recovery
In a variation on the previous tip you can also consider the recovery of lost customers. If you have a purchasing cycle with a long consideration period (e.g. cars, investment goods, wedding rings, ...) OR where customers churn away and churn back (insurance, telco, …) you can include NPS in your lost sales recovery process.
By surveying customers that left you or didn’t progress in the journey, you not only learn about the things you got wrong but - if played well - you can leverage the closed loop process to recapture the sales you otherwise would have lost.
Warning: recovering lost sales through NPS initiatives is a balancing act which can go horribly wrong if you don't strike the right tone. So do thread lightly.
5. Launch a conversation about the customer in the business
Last - but definitely not least - there is what I consider the most important instant winfor NPS. The customer (verbatim) comments can be a great driver for conversation about the customer at every level of your organisation.
By focusing your internal communication and activation on these stories rather than the metrics, you can introduce customer cases as a source of intrigue, horror, amusement and empathy for all your employees. This way you intuitively demonstrate the value of your NPS programme every single day.
Have you come across other quick wins to boost your Net Promoter programme? If so, please do write them in the commentary field below.
Net Promoter, Net Promoter Score and NPS are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld
Imagine the following situation.
A man sees an attractive woman at a party. They talk and decide to have a few dates. After giving all the right signals for being a loyal, caring, trustworthy and relationship-oriented guy, he convinces her to spend the night. The next day he is gone and when she calls, it is clear he doesn't want to speak to her....
Three months later, they meet again at another party. The man has no memory of who the woman is and talks to her as if they meet for the first time. He even asks for her phone number because he thinks she's goodlooking and perhaps they could go for dinner.
I think you'll agree that unless this gentleman was a truly exceptional lover, his chances of a sequel are pretty slim. Those of actually building a relationship, are non-existant.
But when you think about it, this is exactly how many brands behave. They advertise, promote, seduce and sell to get us to trust and believe them. They want our loyalty. And once we have fallen for their charms, we get a box with product and a customer service number which doesn't really want to return our calls.
What's more, the next time we enter the market place, those without an expensive CRM system, have forgotten all about us, yet don't hesitate to make the same proposition all over again.
Those with the expensive system do remember our name, but only in a transactional sense. They are the guy that disappears after that first night and shows up 3 months later with a bunch of roses, fully expecting things to pick up where they left off.
Now don't get me wrong, I'm not saying things should always be serious. No-strings fun is always an option. But what amazes me is that, in spite of their behaviour, these same brands delude themselves by talking about customers loving them and building relationships.
After all, if they really care, why do I only hear from them if things are wrong or of they want to sell me something new?
Why doesn't anyone call me 2 weeks after I bought that new TV to see if I figured out all the buttons? Why don't I ever get an invite for a chat from the guys who sold me my car until my lease contract is up for renewal? Why don't they call me after I have - metaphorically - spent the night?
So if, in the past 12 months, you or your company have used words like customer love, intimacy or loyalty I would like to challenge you to consider whether the actions of your business reflect those of someone truly committed to building a lasting relationship, or if they are the moves of someone looking for a quick score.
If you can look in the mirror and confidently say it is the former, then I applaud you and strongly encourage you to stay the course. In fact, I'd love to hear from you for a case study (seriously).
If it is the latter, then don't be surprised if at some point you run out of customers to pick up and abandon. Because in the long run, that's what happens when you get the reputation of being a one night brand.
When it comes to managing the digital customer experience, there’s an interesting duality all of us need to deal with:
The result seems to be a tug of war in which legal departments baton down the liability hatches, marketing teams scramble for every piece of data they can get their hands on, consumer groups/governments come up with new regulations and consumers get ever more wary of sharing their data.
I don’t think it needs to be this way. I’m not a data or privacy specialist, but I believe that by taking a customer-centric view to data-collection and management, we can encourage customers to voluntarily share all the data which we need to service them well while keeping everyone happy (including the legislator). But it does require a few mind shifts.
#1. Get rid of the form mentality
When collecting data, too many companies still apply a fill-out-the-form mindset. They try to capture all the data they may ever need in one customer interaction and store this their systems for posterity.
While this approach made perfect sense in the days of the typewriter and the filing cabinet, today it is anything but optimal and it makes customers wonder about the questions asked (I mean, why do companies always wants to know our birthday?).
It is much smarter to look at data collection as a journey, in which your company only asks customers for the data that is needed to complete the process at hand. This will make any forms shorter to fill out, any data easier to maintain AND will be much more motivational to the customer. After all, if you ask me for my mobile number to SMS-confirm a delivery I expect, I'll be much more inclined to give it to you than if you make it part of a 20-field form on our first interaction.
#2. Align different departments around a customer dialogue
Different departments have different needs and objectives when it comes to data management. Legal will want to minimise exposure. Marketing will want to mix and match data, so it can make tailored offers. IT wants a clear roadmap and priorities to keep the machinery running.
With the best of intentions, all of these stakeholders will get in each other’s way. At best, the result is internal inefficiency. At worst, customers get irritated as they can get rather touchy about a topic like privacy.
A way around this is to align all departments around one customer dialogue map. This enhancement to the customer journey clearly describes the human and digital dialogues that take place at every touchpoint, regardless of the path the customer desires to walk. Based on this map you can clearly define the data requirements at every step of the customer journey and cascade them throughout each level of the organisation (think lean data). You can also organically build a permission dialogue in which people are asked for additional information only when you need it (and they see the benefit :-).
#3. Only pursue the data you can actually manage
With all the innovations around, it’s easy to get excited about data, analytics and fancy software solutions. They allow you to do all sorts of cool stuff and digitally empowerconsumers at every touchpoint. If only you get more data, you will make more money, be more efficient, be faster on the trigger and remain up to date on the status of your business (oh yes, did I mention the ability to make shiny colourful graphs?).
But the problem is is that many companies can’t really handle more data. In fact, there is only so much customer information that the people in the organisation can actually deal with, and the more you pile upon them, the more this data turns into internal noise. This isn’t just distracting, but every piece of data that you create, needs to be maintained, which costs money. Not to mention that after having received five customer surveys within 2 weeks, even the most positive customer will get annoyed if you don’t really do something with her feedback.
So the final mindset shift is to resist the urge of biting off more data and systems than you can chew. Even if an army of consultants tell you that you should be getting in touch with all your customers at every touchpoint and analyse their every move, ask yourself whether your organisation is set up to do it.
If you aren’t 100% sure you and your customers will benefit, don’t burden your people with yet another report and don’t ask your customers for more information. They’ll be grateful for being left alone and will be more willing to give you information next time round.
Random thought: I just realised that the only privacy related communications I’ve ever received from companies is asking me for "more" information. I’ve actually never received a mail from a company giving back some data … i.e. “Alain, as we are not using your birthday for anything sensible, we’re giving back the permission you gave us to work with it.” Would that be a pleasant surprise, or am I just being naive?
No customer-centricity programme deserves to exist without a business case. This doesn’t need to be extensive or be forensics proof. But it does need be present, if only as an estimate made on the back of an envelope. After all, any company initiative that is disconnected from the fiscal realities of business is impossible to sustain.
But all too often, the profit case that is presented is limited to the profits that are most obvious.
This is a pity. On the one hand an insufficiently strong (i.e. incomplete) business case can mean the premature end of valuable customer initiatives. But more importantly, by not estimating the full benefit of a customer-centric approach to the business, new profitable opportunities may get lost.
So to make sure that in the weekly carroussel called work I don’t fall into the same trap, I use the following checklist of the ways I have seen a customer-centric approach drive sales and profit in terms recognised by traditional/financial KPI’s:
#1. Higher customer profitability
It’s still the bedrock for most customer business cases I see. The logic goes as follows:
(a) Customer-centricity leads to more happy customers.
(b) These happy customers buy more, more often, for longer periods of time than unhappy ones (which are often loss leading).
(c) By also considering elements like lower cost to service, word-of-mouth, more flexible negotiations etc., the differential quickly runs into the triple digits.
(d) As long as creating more happy customers costs less than this financial bonus, you're in the money. If not, it's back to the drawing boards.
While these numbers are never an exact science, they almost always do the trick with a bit of data-effort and a pragmatic mindset.
#2. Better sales forecasts
Any finance department will tell you that accurate (sales) forecasting is crucial for the financial health of the company. But it is also notoriously difficult. Individual bias, commercial pressure, market variables and political agenda’s more than once lead to the conclusion let’s just do 5% more next year.
However, every CFO could benefit from a more customer-centric forecasting mechanism (vs. spreadsheet-centric). Especially in B2B environments, continuously linking the voice of the customer and key customer performance indicators to the forecasting mechanism can provide great insights into the customer’s future intent on purchase, negotiation, churn etc. And better forecasts lead to better use of cash.
#3 Higher return-on-capital
At the end of the day, companies live off customer money. As such, every company investment or expense should aim to maximise the amounts of money customers bring to the table. But outside the customer facing areas, investment cases rarely consider this factor. They look at internal, competitive or best practice considerations.
However, customer-centric investment cases require everyone in the business to clearly formulate and estimate how their proposed initiatives will translate into value which customers are willing to pay for. This additional perspective makes sure that customer money producing business cases rank higher in the hitparade and that any capital deployed gets the highest possible return.
#4 Higher return-on-innovation
Depending on the research you look and your definion of success -which in corporate land can flexible- between 50% and 95% of innovations fail when going to market. The main reason for this failure is their inability to resonate with the current and future customer needs.
This failure rate can be significantly reduced by making sure that the business only puts out propositions that customers actually want to buy. Whether this is done through observation, interaction, co-creation or other means is up to each company’s taste. Still, by making sure that every engineer, product developer, designer or creator puts the customer at the heart of all their innovation efforts, the return-on-innovation will go up.
#5 Reduction of operating costs
Some people don’t like to hear it, but customer-centricity is a great way to trim fat out of the business. After all, being customer-centric doesn’t mean doing more for the customer. It means: doing the things customers care about.
But with this latter definition, the inverse is also true. Once you do what customers care about, you can stop doing all the rest. Having a good understanding of what customers desire, makes it possible to challenge every process, task, department or asset of the business that doesn’t contribute to deliver against this requirement. All these savings go straight to the bottom line (or the customer investment fund :-)
#6 More accurate valuation of M&A transactions
When buying a company, the due diligence process largely focuses on current and past financials, existing order books, installed base estimates, etc. But few prospective buyers really dig into customer sentiments and unaddressed customer insights. Meanwhile, these indicators can have a tremendous impact on the future value appreciation of the acquisition target.
After all, given the same balance sheet and order book, would you pay the same price for a company of which 90% of customers were detractors than for a company where 90% of customers are promoters? Or for a company which was solid but seemed to miss out on a deeper customer insight which could double the sales?
#7 A more efficient payroll
There is ever growing proof that if your employees are true promoters of your business, your customers will be positively influenced as well. While I haven’t been able to ever run the numbers on this, I believe the opposite to be true as well: Employees who are continuously confronted with happy clients will generally feel better about their job than those that keep hearing how hated they are (even at the family BBQ).
Especially when combined with higher customer empathy levels in customer-centric companies, this differential should have a noticeable effect on employee churn, absenteeism, productivity, engagement and therefore overall payroll cost.
#8 Higher growth rates than the competition
While the battle of the customer experience metrics rages between Net Promoter, Customer Effort, Brand Advocacy, WoMI and half a dozen others, all seem to agree on one fact: If you outrun your competition on the customer experience you deliver for a similar price-point, this is a good indicator for future growth.
While I’m not 100% convinced it’s a single-variable game, the message is clear: being better at connecting to your customers and than your competitors competitors helps rather than hinders your growth.
#9 Better stock market multiples
Stock market value is created - largely - by two factors: the performance of the business and the multiple that investors are willing to pay for it in the share price. As especially this second factor is driven by analyst and investor appreciation, it can be influenced. For instance, by making a case that your company has more loyal and higher valuable customers than those of your competitors.
This will increase your comparative value and while forward looking statements remain tricky, it SHOULD enable you to positively influence your P/E ratios. Though it’s probably wise to only play this card if you are sure you’ll be able to deliver against this for more than one quarter. Otherwise the effect may be quite the inverse :-)
#10 A strategic future
Finally, there is the realisation that without a customer-centric approach, there may be no profit left in the long run. With all the digital, technological and scientific changes accelerating around us, complete industries are about to be reshaped. The common denominator in all these changes will be increased personalisation and the management of individual customers.
In other words, yesterday’s production-centric world where "you consume what I produce”, will transform into a customer-centric reality where “you produce what I consume". This is still a few years away, but considering the 5-10 years amortisation periods on retail formats, production facilities, call centres, etc. it may pay to get ahead of the customer-centric curve.
What do you think?
These were the main ones on my checklist, in which I have a few more written in pencil which consider better account management, a more efficient IT infrastructure, sharper risk management, lower litigation ratios, reduced liability insurance fees, better bank credit conditions, etcetera.
But I’m sure I also missed a few, so if you have suggestions or improvements, please use the comment field below!
About this blog
Whenever inspiration strikes, I use this space to share my thoughts on customer experience management, storytelling or what ever else crosses my mind.