Sarah Derrenbacher is a colleague of mine.  She forwarded these stats to our team a few weeks ago.  They speak for themselves.  They should speak to YOU too.

Did you know?

49% of executives believe customers will switch brands due to poor Customer Service 89% of customers say they have switched brands because of poor Customer Service 80% of companies rate Customer Service as a top strategic objective
93% of business leaders say that improving Customer Service is one of their top three priorities for the next two years
97% state that Customer Service is critical to their business success
20% loss of annual revenue is the estimated cost of failure
91% of businesses want to be a Customer Service leader
37% are getting started with a formal Customer Service initiative

Nothing I can say in this blog could possibly have more impact on you than those stats.  Will you ignore them?  Go into denial?  Point fingers?  Or will you do something about it at your company?

 

Source: O’Keeffe , Bloomberg Businessweek

Tell me what you REALLY think

I never make a major purchase without reading online product reviews (never is a strong word, but true). The early demise of an expensive household item has gotten me touring blogs and merchant sites with a vengeance. And fortunately for buyers like me, people have a lot to say – good, bad, and ugly.

I also have a lot to say about the products I buy but have never (again, true) written a product review. So that makes me wonder how many people there are like me that aren’t posting reviews. Studies estimate that for every 1 customer complaint, 26 others don’t share their negative experiences with the company at fault. That makes for a lot of unhappy customers out there; with eroding loyalty, or quietly taking their business elsewhere, or even spreading negative word-of-mouth advertising.

Do you know how your customers really feel about the experience you are providing them? Many companies do invite their customers to provide feedback. In fact, research shows roughly 98 percent of companies collect feedback but only 8 percent actively follow up to do something about it. Are you willing to reach out in a way that engages, and doesn’t annoy, your customers? That means having a frank, meaningful conversation about their experience of your company. And then taking action to make the needed changes to improve their experience?

The companies that will get and keep my business are those that would never (yep, never) think of ignoring customer feedback and are committed to making real change based on that feedback. Are you one of those companies?

I want help…AND a good experience.

I’ve spent the last few days working with my team to implement a new help desk system for Brand Integrity’s Potential Point users.  If you are like us and offer some kind of software service, you probably have a help desk ticketing system. How much have you thought about the help desk customer experience?

What an opportunity to make a difference!  A customer is proactively reaching out to your company asking for help, advice, or has a recommendation for you.  They just spent the time to use your product, got stuck on something, and filled out your contact help form.  They have information about your product that you don’t know. Right or wrong, these customers have discovered a bug, had a confusing user experience, or have an idea to make your program even better. Now, what can you do to amaze them?  Consider the following when designing your customer help desk experience.

  1. Keep it simple: Whether it’s your contact form or the responses you train your customer service agents to send out, keep things simple and to the point.
  2. Do not over-use automated messages: While automated messages can appear like a huge company time-saver, don’t forget they are going to real customers and play a huge part in the experience they have.  Use them at strategic tough-points to keep the customer updated but make them short, to the point, informative, yet still representative of your company’s personality.
  3. Set expectations: the worse thing a customer can experience is to submit a request and have no idea when it will be answered.  Make sure that with each communication you give an idea of timing for resolution or at least when you will be next in touch with them.
  4. Communicate using a customer’s preference: At Brand Integrity we have some customers who don’t use computers as part of their day-to-day jobs. Don’t be afraid to use the phone. Educate your agents to use the form of communication that the customer prefers.
  5. Keep the customer well informed: if your help desk is experiencing high traffic respond to the customer to let them know it might take a bit longer.  Or let’s say someone submits a support case about your website being down and your agents learn that the web servers won’t be back up for two hours. Let the customer know when you find that out, don’t wait until the two hours are up.
  6. Treat customers like individuals: Zappos didn’t become the king of customer service by doing nothing.  Their great customer service principles can apply to a any sized company.  Whether it’s email, phone, or online chat, make sure your support agents are trained to be friendly, polite, and engaging with the customer.  Every customer interaction is an opportunity for an agent to create an ENGAGED customer.

Today’s help desk software offer some amazing features like escalations, auto-responses, rules, forums, etc… Don’t let these features determine the experience you are going to give your customers.  Let the desired experience you want to give determine the features you end up using.

When in doubt put yourselves in the customer’s shoes. If you were the customer as yourself “would I appreciate that response?” or ”would I want to have that experience?”

Happy help-desking!

How Passive are Passives?

In one of my earlier posts, I referred to how the Net Promoter Score calculation leaves the segment of Passives theoretically out of the equation. (Passives are customers who rate their likelihood to recommend a company at 7 or 8 based on a scale ranging from 0 to 10, as shown below.) Doing so implies that they have no significant impact, an assumption that can greatly affect the way executives approach this particular group of customers. A closer look at the distribution based on a recent resident loyalty study we conducted in a prominent senior living community supports this assertion. It reveals that Passives drive positive WOM, potentially generating new business. In the study, each Passive resident accounted for an average of three recommendations (in twelve months). The name “Passives” has a negative connotation, which in my opinion does not do the segment justice. “Supporters,” for instance, might be a more accurate description, implying strong positive WOM activity, but not as strong as that of Promoters and, of course, stronger than that of Detractors.

A couple of side notes:

  • Past performance does not guarantee future performance. The fact that “Passives” provided recommendations in the past 12 months does not mean that they will continue to do so in the next 12 months or so. This should be taken into consideration while attempting to assess the relationship between the two metrics (likelihood to recommend, and # of recommendations)
  • Nevertheless, the relationship between the two metrics could be justified in the next wave of the study (12 months later) by cross-comparing Passives’ current likelihood to recommend in the next 12 months and the actual number of recommendations they provided (self-stated) during the same period.

Disclaimer: I am a Net Promoter Certified Associated, trained by the co-developers of the concept, Satmetrix Systems. All content expressed on this post represents my personal opinions. The views stated here are not those of Bain, Satmetrix Systems, or any other organization or individual mentioned on this post. Net Promoter and NPS are registered trademarks of Bain and Satmetrix Systems.

Net Promoter Straight Up

10 Key Observations for Customer and Employee Loyalty Practitioners 

 

 

 

 

 

 

 

 

1. Despite its ability to generate customer insights, a Net Promoter Program is a customer and employee engagement tool, not a research exercise. Its top goals are triggering customer relationship resets and holding employees accountable to embracing customer-centric behaviors. Using Net Promoter only as a customer feedback collection tool fails to engage with its primary value, ultimately undermining ROI.

2. Net Promoter has become the dominant loyalty metric and principle because of its simplicity and relative ease of adoption, whether researchers like it or not. NP is a good example of what psychologists call “Availability Cascade,” a self-reinforcing cycle that starts when a simple idea gains popularity because of its simplicity, and then is viewed as even simpler because of its popularity. A smart company should embrace Net Promoter, since trying to fight dominant trends almost always leads to isolation, but it should not rely entirely on it.

3. Both metric and end-to-end Net Promoter programs rely entirely on the “Likelihood to Recommend” question, which, at its core, assesses the Word-Of-Mouth (WOM) state/impact of your customers, not customer retention. The assumption is that strong “recommenders” are your most loyal customers, which links Net Promoter Scores to customer loyalty. If this particular linkage is proven untrue or inaccurate over time, the Net Promoter principle will end up being hot air. However, this is quite unlikely to happen.

4. The Net Promoter Score ranges from 0-10 and segments the market into three primary groups: Promoters (rating of 9-10), Passives (rating of 7-8), and Detractors (rating of 0-6). As a result, it measures positive WOM (based on customers’ “recommendation likelihood”), but it does not account for negative WOM, namely those who not only are not at all likely to recommend (Detractors), but who actively provide negative recommendations to people they know. The metric assumes that an individual will only provide either positive recommendations or no recommendations at all. Customers providing negative recommendations are forced into the bottom of the Detractor segment, preventing the metric from capturing a comprehensive picture of Word-Of-Mouth impact.

5. The Net Promoter Score is derived by subtracting the percentage of Detractors (rating of 0-6) from that of Promoters (rating of 9-10). Approximately 20% of the market (rating of 7-8) is theoretically left out of the equation, which implies “no impact,” while at the same time this very group of customers significantly contributes to the end result. In almost all projects I have personally managed, the Passives have provided numerous recommendations per year, but the metric treats them as if they are completely inactive or do not exist, an oversight that could easily lead to inaccurate business decisions. Executives almost always approach Passives as if they have zero contribution, a potentially costly mistake.

6. The “Likelihood to Recommend” question could be misleading in cases of customers not providing recommendations as a result of innate personality traits instead of low satisfaction with or loyalty to an organization. In simple words, a customer may state a low likelihood to recommend because he/she simply does not believe in recommending anything, not because he/she is dissatisfied with the company, product, or service. Although these cases may be the minority, they do impact results.

7. A fully operational Net Promoter program (meaning a program that includes comprehensive customer follow-up planning/execution and deep NPS integration to employee performance assessment and compensation) is expensive. Simply obtaining your customers’ likelihood-to-recommend-your-company scores (by running a customer satisfaction survey) requires a few hours preparation and may cost $250/year or less. Integrating that score to your company’s core culture and basic operational functions is where the cost can skyrocket – and the area to focus and keep a close eye on.

8. Realizing bottom-line results from implementing Net Promoter programs demands at least two to three years of persistent and uninterrupted program execution with very careful wave-to-wave refinement. Organizations that claim significant NPS increases in a matter of months are just scratching the surface, and in many cases, cannot really tell what drove their score improvements. Again, successfully developing and executing customer follow up and employee compensation models takes a fair amount of time, not just a “matter of months.”

9. Implementing NP programs is essentially a race against your own benchmark, similar to how athletes approach triathlons; each time you try to improve your previous performance. Straight company-to-company comparisons should mostly serve directional purposes and help put things in perspective. Each vertical is different with regards to customer loyalty and each organization is set up differently as well. Also, customer loyalty benchmark studies are based on different and sometimes conflicting methodologies. Instead of spending hours comparing your performance to these of your competitors, try comparing your performance now versus your performance a year ago.

10. It is no secret that Fortune 1,000 companies are already implementing NP programs in some form or another. However, the future of these programs (and, in my view, the true opportunity to prove the superiority of the concept) is their full adoption by small- and medium-sized companies. This particular market segment will need to develop innovative ways to execute end-to-end NP programs, since capital and human requirements are currently too high for these businesses to afford complete, integrated solutions. This will be the test that will determine whether Net Promoter is the de-facto loyalty principle or just a luxury for the few.

Disclaimer: I am a Net Promoter Certified Associate, trained by the co-developers of the concept, Satmetrix Systems. All content expressed on this post represents my personal opinions. The views stated here are not those of Bain, Satmetrix Systems, or any other organization and/or individual mentioned on this post. Net Promoter and NPS are registered trademarks of Bain and Satmetrix Systems.