Posted on June 30, 2009 by Paul Schwartz
Since I have written in the past about Net Promoter Score (NPS) the publishers of this most recent book sent me a copy and it’s about time I posted my review.
There has been much criticism of NPS as a single measure of loyalty. With most of the criticism centered around the disbelief that a single metric can be reliable, and the inability of others to reproduce the results from the original book. With this recent work it looks as though the authors are more on the path of using NPS as a process for building a customer-centric business than as a single indicator of ability to grow. The authors state “Net Promoter is a metric and way of doing business.” So while the book answers some questions, it still leaves others unanswered.
- It backs off from the single metric concept and offers a good framework or operating model for collecting, analyzing and acting on customer feedback.
- It provides several good options for understanding and segmenting customers and what to do with each segment. It also offers a good methodology for driving organizational change towards becoming a more customer-centric organization.
- It finally talks about multiple question surveys for gathering customer feedback.
- They urge caution when using NPS to impact employee compensation.
- It lists a major tenet as “linkage to financial outcomes” but doesn’t discuss or show how to really do that. How does one prove that an improvement in financial performance is due to an increase in NPS? They state that it does, but don’t show how to prove it.
- Their discussion around correlation, regression, and relative impact analysis without a detailed example is a major fault. They tell you why it’s important, but it really falls short on implementation.
- Much of their discussion around customer-centricity is not all that new.
So if you are struggling with how to start on the path towards a customer-centric culture it’s a good read. If your still hoping that asking one question will get you a loyal customer base, keep hoping my friends. It’s just not that easy.
Filed under: Customer Focus, Customer Loyalty, Customer Strategy, Net Promoter Score, Uncategorized | 4 Comments »
Posted on October 21, 2008 by Paul Schwartz
With it so easy to collect customer feedback these days you’d think most companies would have an excellent “read” on their customers. Unfortunately, that doesn’t seem to be the case (in my consulting practice). While the increase in customer contact points (a.ka. listening posts) such as blogs, social media sites, online communities, and word-of-mouth have increased the quantity of customer feedback, many companies struggle with what to do with all this feedback.
We can understand part of the problem by looking at the results from a study investigating company usage of customer feedback by Respond (now part of CDC), which showed that:
- 95% of companies collect feedback
- 45% alert their staff
- 35% use insights gained from the feedback
- 10% deploy a change or improve processes
- 5% tell customers they used their feedback
So what we have is a lot of activity (collecting feedback) but very little in the way of outputs (changes or improvements). It is disappointing to see how few companies actually tell customers they used their feedback. Maybe that is because they did so little with it.
So why so few outputs from customer feedback?
There are several reasons, and unfortunately none of them are as easy to solve as it was to collect the feedback in the first place. Some reasons that come to mind are:
- The feedback mechanisms are poorly designed at the outset and deliver very little in the way of actionable insights. Referred to as drowning in data, but starving for information. Often times multiple tools that collect data at different customer touch points are inconsistent in their language rendering the data confusing. Useless information is collected that only adds complexity to the interpretation of the data.
- There is no process outlining what to do with the data once it is collected. There is no clear owner of the data, there is no accountability to make improvements based upon the feedback, and there is no mechanism to track improvements.
- Probably the most important, is the company itself does not have a culture of valuing customer feedback. I once had a CEO tell me that if a customer contacts him directly that his processes have failed! He did not want to talk to customers directly, and as a result he now had a significant customer relationship problem on his hands. Part of a healthy customer-centric culture is having clearly understood mechanisms for integrating customer feedback into employee compensation programs.
None of these are easy fixes, but if you truly are a customer-centric company you need to put customer feedback at the heart of your business. To make sure it all works, keep it simple, make it all consistent, and make it part of your culture. To accomplish all that you need to do your best to be able to correlate changes in customer feedback (leading indicator) to changes in the way you measure your business (lagging indicator). If you don’t, make sure there are plenty of flotation devices around so you don’t drown in your data.
Filed under: Customer Feedback, Customer Focus, Voice of the Customer | 6 Comments »
Posted on April 24, 2008 by Paul Schwartz
I have been participating in the Re-Experiencing Starbucks Project, and this had pushed me to keep a closer eye on the company and the strategy being put into play by returning CEO Howard Shultz. I was in Starbucks the other day – doing some research – and noticed they have a new logo! Well, it’s an old logo actually, and you can read more about the Starbucks logo transition here.
Why the new logo? The new logo appears to be put into play to match Shultz’s strategy of returning Starbucks to the good ol days of a never-ending focus on the customer. The strategy is great, but I can’t say the same for changing the logo.
Will customers care? Is a logo really that important to customers? I say, heck yea! The logo is a graphical representation of the brand. The brand is a roll-up of everything that creates the customer relationship. More importantly, a well-executed brand is really just a short-cut to the purchase decision. Changing the logo can alter the relationship with the customer, and can therefore short-cicrcuit that short-cut to the purchase decision.
For me, seeing that familiar green and black logo triggered a response in my body that told me the rush of caffeine was on it’s way. I associated the logo with the sensation. It was recognizable from afar. I only needed to partially see the logo on a cup to get me thinking about purchasing a Starbucks beverage. Now the changes to the Starbucks are not huge – a second or two was all it took to know it was still Starbucks, but it just didn’t have the same effect on me. The all brown logo is just not appealing. It’s “what brown can’t do for me.” (P.S. – They also have a new look to their website, and yes, it’s brown)
I think it was a mistake to make the change. Starbucks is now forcing customers to make a new association in their brain and in their psyche. It’s not a death sentence to Starbucks by any means, I just think it’s a change that slightly confuses customers. Really, does any company ever need to add confusion to the customer relationship?
Filed under: Customer Focus, Howard Schultz, Starbucks | Leave a comment »
Posted on April 15, 2008 by Paul Schwartz
As you can see from my last post, I am in the process of changing my email address. I get emails from about 100 providers – from major and not-so-major online retailers, to industry news providers, to advisory services, to stuff I just find interesting. It’s been an interesting, enlightening, and at times, a downright scary experience having to make this single change with all these providers.
Here are the results of my very, very informal tracking of having to change my email address over the last 3 weeks with these 100 service providers:
- 20% are easy and allow me to get to a page to change my email address with one click. I like this and it’s a pleasant experience. For many I also noticed that on the same page they have other content I want to know about so I subscribe to more lists. Nice!
- 25% force me to go through 2 -3 clicks to get to a page to make the change. Not bad, but I’m getting tired of this.
- 40% require me to logon with a username (often different than my email address) and password. I’ve been on some of these list for 3+ years and I really have no idea what I should use to logon. So I try some standard combination that works about half the time. For the other half I need to request my logon info, but it turns out they don’t have me in their database to send me my logon info. They are happy to send me emails, but have no way of telling me how to continue getting thier emails. At some point it gets so frustrating I give up and bid them farewell. It was surprising that some big name retailers and content providers fell into this category.
- 15% don’t even give me an option to change my email address. It’s either unsubcribe or nothing. These 15% just don’t want me on their email list. For 50% of these If I click “unsubscribe” at the bottom of their emails hoping that it might lead me to a page to change my info, the single click results in a real unsubscribe. For the other half of these, I can’t figure out how to subscribe again so I just give up. It’s just too much work. If their content is so good that I feel I am missing it in a month or so I will search them out. But I have found that those with really good content also have a really good process to manage subscribers. They have looked at the entire process from their customers point of view.
Test your business’s email subscribe and profile change processes. Don’t take this asprect of your business for granted. Make it easy for your subscribers to see how to do it, and get it to one click. It’s all part of the experience of doing business with you. Many business have significant budgets dedicated to “email marketing” and building their email lists. Many can do a much better job maintaining their lists and overall customer retention.
One other lesson to note – don’t change your email address…
Filed under: Customer Focus | Tagged: Email List Retention | 2 Comments »
Posted on August 28, 2007 by Paul Schwartz
I’m seeing an interesting trend in my client work. The metrics used to measure the health of customer relationships are declining, yet the companies have not really changed anything operationally. So how does one explain this disturbing trend? First, getting to the heart of the matter would require a deep dive into the metrics to look for other trends, correlations, and insights. Until that happens, I’ll offer up one cause that may be impacting all sorts of other companies.
The rapid growth of the internet and supporting technologies has given consumers increased strength in the customer/company relationship. As customers have grown in power, so have their expectations, and their expectations are your real competition. Whatever you want to call it, this growth in popularity of customer-centricity is taking hold in a variety of industries. The believers are investing serious time and resources into understanding customer expectations, and improving their value and relevancy to thier customers. It’s paying off. Look at the growth of Amazon.com or the ratings for GEICO, or any of the blogs listed in my blogroll and you’ll find examples of companies who are improving thier customer relationships through improved products, services, and customer experiences with positive results.
As consumers see improvements with one company they begin to expect it from other companies, and often in totally unrelated industries. If I can open a CD account online with a bank in Indiana, why can’t my local credit union do the same thing? If it’s easy to get someone to help me at Home Depot, why do I have walk the isles at Lowe’s looking for the same assitance? When you call in for assistance to the California Franchise Tax Board the representative now gives you the the option to leave feedback following the call! If the Tax Board wants my feedback, why doesn’t everyone?
When it comes to customers and their expectations, being good enough isn’t. For many products and services, most customers won’t think about switching until thier current provider screws up or just doesn’t meet their expectations. Not meeting expectations is the initial driver to look elsewhere. It’s these expectations, whether realistic or not, that are the new competition. As more companies earnestly focus on improving thier value to their customers, the bar gets raised for all companies. Companies who have bought into a customer-centric way of doing business will be the winners. That means that customer-centricity is part of the life-blood of the company, that it is measured and rewarded, and that customer expectations are understood and often exceeded.
Filed under: Competitor Analysis, Customer Focus, Customer Strategy | 1 Comment »
Posted on July 18, 2007 by Paul Schwartz
According to the 2007 Cone Cause Evolution Survey, 87% of us “are likely to switch from one brand to another (price and quality being about equal) if the other brand is associated with a good cause, an increase of more than 31 percent (from 66%) since 1993.” The study also found that 89% of employees familiar with their company’s cause program feel a strong sense of loyalty to their company. Cone’s chairman and CEO also stated that “When companies inspire their workforces in this way, employees will be proud and loyal and will carry forward positive messages about their companies to their families and friends.” And let’s not forget about that positive message getting to customers as well.
The study found that:
“Many companies are choosing which issues to support based on where they can deliver the most meaningful business and social results to their stakeholders. Nine in 10 Americans say companies should support causes that are consistent with their responsible business practices. Eighty-seven percent say they want a company to support issues based on where its business can have the most social and/or environmental impacts.”
For companies that do support causes – who chooses the cause to support? Does the quote above mean that the CEO, or Board of Directors, or investors, or employees choose? Hey, what about having the customers choose where your corporate support goes? After all, if you didn’t have customers buying your products and services you wouldn’t have resources to donate. Maybe try something along the lines of Amex’s The Member Project , where members vote who will receive the funds from Amex.
You can support more than one cause, or more than one organzation as well. Let’s say your customers want you to support local schools. If you have multiple divisions or locations, you could donate funds to each of the schools in the same community as each of your locations. Find a way to co-create your cause marketing strategy with your employees and your customers, so that “your” cause becomes “our” cause.
Filed under: Cause Marketing, Co-Creation, Customer Focus, Employees | 2 Comments »
Posted on July 9, 2007 by Paul Schwartz
I’ve been working on a big “measuring the customer experience” project and it got me thinking. What is it that makes one customer initiative a success and another, well, not so successful? I didn’t want to say “failure” because I believe there is no such thing as failure, there’s only feedback. As I visited the recesses of my brain (yikes!), and researched best practices, I came up with 3 things you must consider when your company decides to focus on customers. They are the 3 S’s critical for success, and they are not mutually exclusive:
1. Strategy – The value of strategy should be pretty clear, and it needs to come from the top. What is your customer strategy? How are customers treated? How far will you go? Does cash flow come from products or from customers? (answer = customers). Have you taken the next step to customer advocacy? Do you want to “bump the lamp” like Disney? It needs to be defined, it needs to be clear, and it needs to be measurable. Remember, this just might be your biggest competitive advantage.
2. Silos – Is your CEO in charge of your customer strategy? Do you have a Chief Customer Officer who is charged with all things customer and can get all department heads on-board? Or is you Marketing VP expected to handle customer strategy? If it’s the latter, you may have some difficulties ahead. Customers touch every part of the business and unless you have someone with the authority to get things done, it won’t happen. You’ll need a team of senior executives from each area of the company who are responsible and rewarded for crafting and implementing your customer strategy.
3. Staff – Does the rest of your organization fully understand your customer strategy? Remember, everyone is directly serving customers, or serving someone who does. Have they been included in the design of your strategy? Does your front-line staff get it? Are they trained, supported, and rewarded based on customer success? Do they have the ability and desire to serve customers, to be empathetic, and to solve problems?
Having a wonderful CRM system and a visually rich customer dashboard doesn’t mean that customer success is a given. These three S’s often de-rail the best laid plans. If your just starting out, it’s best to acknowledge them up-front and include them in your implementation plan. If you down the road already and things are not working as expectated then take a step back and assess if these areas need some work. So, here’s to all your customer successes (wait, that’s 4 S’s …)
Filed under: Culture, Customer Focus, Customer Strategy, Employees | 2 Comments »