Net Promoter programs have been deployed by thousands of companies around the world. Some of them have seen the positive results that should accompany the method and some have not.
What explains the discrepancy in the results?
In Answering the Ultimate Question, the authors give us the solution by explaining the six elements we need in order to do Net Promoter well.
Element #1: Creating Customer-Centric DNA and Driving Change
Net Promoter is a program that requires you to change how you do business and no successful change program flourishes without executive sponsorship and organisational alignment.
Without executive support, you won’t get the financial investments, human resources and focus on the customer that you need in order to make big changes. Simply put, you need complete buy-in from the top in order to ensure this doesn’t just become another to do item that gets ticked off. Don’t start until you do.
In order to get the rest of the organisation aligned with Net Promoter, you need to be thinking about incentive plans, your internal culture, and communication strategies.
You’ll also need to set up a program structure that will ensure employees know their roles and responsibilities in making customer focus their most important role.
You’ll also need to know how to best sell NPS to the organisation. The best place to start is with financial data that proves the value of the program on the bottom line.
Segmenting for Optimal Results
In order to make the program work, you’ll need to have customer segmentation data.
In B2C companies, customer segmentation typically focuses on customer behaviours, such as recency and frequency of purchase and demographics. In B2B companies, you might focus on account size, account type, region, or business unit, as well as individual customer characteristics like job role or purchase influence.
Make sure to choose segments where your business will most benefit from increased loyalty because you can’t necessarily delight all customers all of the time.
Remember, you are looking for customers who produce good profits – customers who are both highly profitable and highly loyal.
Element #2: Develop an Enterprise Roadmap
NPS programs that don’t get rolled out with a clearly defined strategy – just like any other change initiative – usually die a slow and painful death.
Here are some critical areas your plan needs to cover in order to be successful.
Planning for Different Types of Change
There are two dimensions of business improvements – operational and structural.
Operational improvements are quick wins that are rapidly identified and resolved, usually involving tactical opportunities to improve the customer experience point of contact with the customer. Operational improvements typically improve loyalty one customer at a time.
Structural improvements have longer-term, potentially more significant impact on customer loyalty. These improvements typically require changes in the product, business model or services and therefore take longer and involve more cross-functional involvement and more resources.
Your NPS program should include a plan for both.
Just as there are two different types of changes you can expect in your NPS journey, there are two different types of surveys you’ll use to drive these changes.
Relationship versus transactional survey processes
Transactional surveys typically measure an event with direct customer interaction, such as a support call.
Relationship measures capture the overall perception of your business and are not related to any one specific interaction. Typically there are gathered on a periodic basis.
Your NPS scores in your most important transactions should be a leading indicator of your relationship NPS.
The Customer Corridor
When thinking about how to improve your NPS scores, it’s critical to understand the lifecycle of your customer, and what touch points your company has with them. So, map out the entire customer experience.
Your job is to understand which touchpoints have the largest affect on the overall customer experience, which ones have the greatest impact on loyalty and in what sequence they should be addressed.
Phased versus Big Bang Approach
Finally, you need to decide how to launch the program.
Programs have been successfully rolled out in stages over time, and at once across an entire organisation. However, the majority of circumstances seem to favour the phased approach.
Element #3: Build Trustworthy Data
Many NPS programs fail because of poor data quality.
Data is trustworthy when it has been collected in a manner that ensures it is an accurate and reliable representation of your customers and their perceptions and behaviours.
The Right Customers
Trustworthy data requires you to measure the right customers. Your sampling strategies should emphasise leveraging feedback of your highest-value customers – “voice according to value.”
The Right Questions
Your loyalty metric (NPS or otherwise) will determine your core survey question, but what other questions should you ask? If you must add additional questions, make sure that they:
- provide useful, actionable data on issues that matter to customers and employees;
- be a good experience for your customers and employees;
- ensure that survey questions are interpreted in the same way by every potential respondent;
- ensure that survey questions elicit an accurate response; and
- provide consistent responses over time.
Determining the Right Time to Measure
The best time to collect data about specific transactional experiences is directly following the transaction.
The best time to collect relationship experience is some point not directly after or preceding a customer experience point – that way no single experience point skews the results one way or another.
Element #4: Identify Root Causes
Analysing the data to determine root causes for customer behaviour is a critical part of the Operating Model.
Using a combination of analysis tools to identify root causes enables employees to address the real and relevant loyalty drivers for their customers.
There are two basic approaches to understanding drivers of loyalty – stated driver analysis and inferential driver analysis.
For stated driver analysis the focus is on root cause interviews and comment categorisation.
For inferential driver analysis, the focus is on correlation analysis and related statistical methods such as regression and relative impact analysis.
Root cause interviews – the 5 whys
To succeed in root cause interviews several elements need to be included in the process.
- Train the interviewer – they need to be familiar with the technique.
- Always ask for permission prior to the interview and prior to getting started.
- Double-check that the customer’s problem or issue has been resolved.
- Plan for a time limit.
- Schedule internal team reviews to discuss root causes and potential solutions.
- Find a way to communicate back with the customers regarding the actions you have taken based on their feedback.
Comment Analysis and Categorisation
The most common method organisations use to structure open-ended comments is to aggregate them and then categorise by theme, examine the relative frequency of different themes to determine which might be key loyalty drivers.
The good old-fashioned way of exploring these comments is to assign internal teams to read what customers say.
Inferential Driver Analysis
Many organisations use additional diagnostic questions beyond the open-ended comment. They cover broad themes like reputation, value and ease of doing business.
When these questions are asked in the survey, you can use statistical techniques to infer, based on aggregated customer ratings rather than statements, what aspects of customer experience are driving overall customer loyalty.
And if you have a systematic way of gathering Promoters together for a conversation about your business (either online or offline), then you are well on your way to identifying exactly what you should be doing to create Promoters and improve your score.
Element 5: Drive action and accountability
It’s not enough to measure your NPS score and doing root cause analysis, you need to take action on what you are learning.
A closed-loop process is a key differentiator in a Net Promoter program. It’s the process that connects employees with customers in a direct fashion.
It’s important to close the loop with every customer and that your employees at all levels have responsibility for making that happen. An effective closed-loop process balances the most desirable attributes found in the best program with practical implementation.
Here are the basics of a closed-loop process:
- The customer responds to a survey.
- An alert to follow up is generated based on business rules. The alert may be event driven or scheduled, depending on your program design.
- A follow-up owner contacts the customer.
- The issue is logged and either resolved or escalated.
- The outcome is tracked to capture any learning.
Here are the areas that will make you successful in closing the loop:
- Speed. From the moment customers provide feedback, they are waiting to see what you will do. In successful Net Promoter programs, responding quickly is important.
- Coverage. If a customer takes time to give you feedback, they deserve a response. A thank you message at the end of the survey is a good start, but you need to provide some indication of what actions you’ll take based on their feedback. Follow up can range from one-on-one meetings at the customer’s office to broad-based communications in an e-mail or newsletter.
- Root cause analysis. As we’ve covered in the previous section, follow up provides a great opportunity to get to the core of the issue.
- Initiate action. In a perfect world, the follow-up owner will take action to resolve the customer’s issues in the first conversation, but you might settle for initiating a response. It could be as simple as “we hear you and understand your concerns.”
- Governance. The closed-loop process requires oversight to ensure that those responsible for taking action are doing so in a timely and appropriate manner.
Element 6: Innovation and Transformation
The goal of a Net Promoter program is transformation, both within the corporate culture and in the marketplace. Net Promoter leaders experience product innovation and improvements through the iterative process of listening to customer feedback and making improvements.
They use increasingly sophisticated techniques, including the use of Net Promoter segmentation, feedback from communities, root cause probing for strategic planning, overall go-to-market approaches, product strategy, customer concretion of products, services and business processes.
The payoff from a successful Net Promoter program is the ability to make the right strategic decisions and foster innovations that ultimately improve your market position. This is where the advantages of superior Net Promoter execution convert into competitive advantage.
I hope you enjoyed this summary.
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