CustomerGauge News Digest March 2008
The daffodils are coming up, the mornings are getting lighter, and the vernal equinox is on the way. The perfect time to put yourself in your customers shoes, and think about what your customers might be experiencing. To help you, read about what’s blooming in enGaugement CustomerGauge news this month:
Spring Clean your Customer Experience: You can be up and running with a fully featured CustomerGauge system and finding out if your customers are willing to recommend you. It’s simple to get going (no involving IT). You can get results in just a week. More here…
NEW FEATURES
White Paper: Now available for download – a complete CustomerGauge Product Description in the form of a white paper: Measuring loyalty and understanding the “Voice of the Customer” to improve customer experience using CustomerGauge. More here:
Get customers to do the hard work by getting them to prioritise your feature “wish list”. Use CustomerGauge “MagicGrid” feature to help you make sure you most important customers carry more weight. More here:
STRATEGIC CHANGE
CHANGE and become customer focused… Where do you start when you are tasked with changing the company to become more customer focused? An ever returning topic for many large multinational organisations is “how to become more customer focused” – some practical “getting started” advice from someone who has changed some giant corporations. More here:
NET PROMOTER SCORE NEWS
What we learned about NPS this month:
- A classic “One Question” survey.
- NPS of -14% is the average in the finance world according to Advisers are a Promiscuous Bunch
- A tax firm on the other hand hits an NPS of +54%
- Net Promoter in the Ad Industry is an average of +21%
- And in Town without Pity: Mooresville tracks satisfaction with NPS you can read about how they bravely measured NPS and found it going down.
Finally: Why Do Customers Defect?
Nearly three-quarters of your customers will leave for one of these reasons: Price? No. Product? No. Death? No. Indifference to complaints? Yes. Read more here:
Until next time, enjoy your spring cleaning.
Spring Clean your Customer Experience
The daffodils are coming up, the mornings are getting lighter, and the vernal equinox is on the way.
It’s a perfect time to put yourself in your customers shoes, and think about what your customers might be experiencing. And if you already know about the Net Promoter Score (NPS) you’ll be wondering how you can start to measure your customer experience before the end of the quarter.
Fear not – we are ready to plant NPS in your organisation. You can be up and running with a fully featured CustomerGauge system and finding out if your customers are willing to recommend. It’s simple to get going (no involving IT). You can get results in just a week.
Not acquainted with Net Promoter yet? Use the warmer days to learn. Or flip through our 2-minute guide to NPS here.
We’ll have you polishing up your customer service in no time. Call us to get a fast start on Net Promoter Score.
Fact Fans only: The origins of “spring cleaning” may date back to the Iranian Norouz, the Persian new year, which falls on the first day of spring. Iranians continue the practice of “khooneh takouni” (meaning “shaking the house”) just before the new year. Or, it might be be traced to the ancient Jewish practice of thoroughly cleansing the home in anticipation of the spring-time holiday of Passover. Honestly, no one really knows.
CHANGE and become customer focused…
CAMILLA SCHOLTEN writes about Strategic Change:
Where do you start when you are tasked with changing the company to become more customer focused?
An ever returning topic for many large multinational organisations is “how to become more customer focused” and in spite of the effort put into this by many hard-working employees I still don’t have the impression that the logic and the methods are clear to everybody in these organisations.
Some companies are lucky enough to have a CEO or influential board member that drives the vision to become more customer focused. They might have adopted a metric on customer experience to hold the company accountable. But further down in the organisation, practical business life is struggling to embrace the change towards the customer and could be trying to keep the Customer Voice outside the business rather than letting customer feedback in.
Some examples of where the customer needs are forgotten: For many marketers the quest for customer focus has translated itself into complicated loyalty programmes or meaningless (e)-direct marketing activities which deliver one-way communication to the customer only, with no back channel (“Please Do Not Reply to This Email”). For sales people the focus is still revenue + sales targets and any direct dealing with end-customers is seen as a threat to the channel that they serve. And contact centres are so engrossed into dealing with issues efficiently that their priority is a maximum time spent on the call rather than genuine customer engagement.
CLEAR LEADERSHIP NEEDED
Business visionaries understand that a critical factor for future success is how well their large companies can transform themselves to open up and embrace their customers. For real. Meaning nothing less than having products and services in place that continuously want to serve and add value to its users. Operating with customer satisfaction at the forefront of every employees brain. Allowing all business processes to be built around serving the end-customer. And all this with the purpose of generating ever-growing revenue for the enterprise.
Now that might be a very ambitious goal and for many, a ten if not twenty year plan. By itself an intimidating thought. But before you kick-off the long-term plan, where do you start? How much change can a company handle without drastic implications on business today?
If you are starting down this road, I have a few best practices to share today.
- Get going with your existing customers. Have you got a direct sales operation or a call cantre that deals with existing customers? Collecting names on your website? Run a competition recently? Use these opportunities to tap into your existing customer base. This is by far the most practical way to get going. Don’t delay – do it today!
- Decide what are the basics: What is key to know on how these customers feel about your company and product/service – that’s your starting point. You want some simple insights on what they are thinking. And before you think about spending thousands on a new database project, just stop. Don’t design new databases unless you have no database to start from. Instead, use anything to get you going today – a spreadsheet will do.
- Adopt Net Promoter Score (NPS). Or at least settle on one company-wide metric that you will use to measure and improve customer experience around. The simplicity of NPS will help you drive the logic and methodology of ‘moving closer to the customer’ throughout your organisation. And you can benchmark yourself against others.
- Now ask the questions. Once you have your existing customer base you start by sending recent purchasers or recent users of your services a very short questionnaire tailored around their experience. Minimise the number of questions and focus on Net Promoter Score for maximum response. Don’t worry about statistically relevant samples. Information (any) information is power
- Care and Caution! As you start getting real customer feedback on how they value and perceive your company, treat this information must be treated with care and caution.
- Care because you don’t want to throw away this valuable feedback or not use it
- Caution because you need to sell it into the organisation while minimising resistance
- Minimise internal resistance by sharing Net Promoter Score results without initially linking the result to good or bad. You need to do these quick surveys on a continuous basis in order to study trends. Combine the general result with areas for improvement based on customer feedback. i.e. these are the top-2 issues our customers tell us we need to improve.
- Accent the positive. It’s important to note that if you have feedback on say, the service-desk of your company, the people working in this department can see this as an attack on their performance. You can minimise this negative perception by presenting the results in a simple format to the respective department first. Also make sure you involve them when designing the plan for improvement. And remind them how good it will be once these improvement start to impact the score on their part of the business. Also if the issue is investment in this particular area, NPS might help generate some of the necessary funding!
So in short, start with highly professional yet easy to understand measurement and reporting of the customer experience. This will help identify next steps as they can be different for all companies. Once you have weekly or monthly measurement and reporting up and running you can take the next step of analysing the feedback in relation to your customers profitability.
That I will write about in our next news update. Until then happy customers!
Camilla Scholten has worked on the strategic marketing as well as operations and direct sales side of large multi-nationals, running teams to drive customer focus. She engineered a measurement tool for customer experience and later adopted an existing Net Promoter Score measurement tool to deliver insight into customer experience based on the Reicheldmethodology of promoters and detractors.
The Reasons Customers Defect
Why do your customers leave and go to your competitors?
This survey was done for the hotel business, but the lessons apply: the majority of defecting customers – up to 68% – never come back because of staff indifference to complaints. On average, the unhappy customers went on to tell 8 – 10 people. And 20% – the MOST unhappy customers – told up to 20 people.
In case I have now got you worried, we have a solution. You can start today to reduce defections by using CustomerGauge to listen to your customers voice, and act on their complaints and suggestions.
CustomerGauge White Paper
CustomerGauge Product Description 29-feb-2008 – PDF (660K)
Now available for download – a complete CustomerGauge Product Description in the form of a white paper: Measuring loyalty and understanding the “Voice of the Customer” to improve customer experience using CustomerGauge.
Contents:
- Introduction to measuring customer loyalty
- Quantative data – Net Promoter Score
- Sales Cycle measurement
- Qualitative data – Customer Feedback
- Advanced customer segmentation: The Loyalty/Value matrix
- CustomerGauge operation
- CustomerGauge usage and return on investment
- CustomerGauge Technology
- Module Description:
1. Main monitoring system: “Measurement”
2. Optional module: “Measurement+”
3. Optional module: “Understanding”
4. Optional module: “Respond”
Other optional modules
CustomerGauge Product Description 29-feb-2008 – PDF (660K)
Survey Idol – One Question Survey Example
A link to a classic one-question Net Promoter survey, thanks to the Service Untitled blog. A good template for an NPS survey:
Subject: "(company name): 1-Question Survey"
Body: Hi -name-,
We are currently asking our customers to take a one-question survey so that we can rate their level of satisfaction with our company. If you have a few seconds, we would appreciate it if you would answer our one-question survey found by clicking the link below:
[URL link]
Thank you for your continued support
Mr Smith CEO, Company, LLC.
Here is the simple survey (note the 10 is on the right – see Good is on the side of right…)
The blogger comments on how he likes the survey, and suggests how he would improve it.
Our product CustomerGauge does exactly what this describes – a simple one-page Net Promoter Survey and collects customer comments. Interestingly, many companies we work with (despite our advice) insist on adding a few more questions!
To answer some of his comments: We have found that offering some sort of award (or possibility of an award) for participating is counter-productive. The best feedback comes from real “fans” of a brand, or those who are motivated to comment because of poor service. Rewards do not improve quality of feedback, merely quantity.
Advisers are a promiscuous bunch, says recent survey…
…but who can blame them given the poor service by providers.
Actually what the survey press release said was “Advisers not Generally Loyal to Providers” but I thought my headline had a better ring.
The gist is as follows: Less than one third of all financial services firms in special investment categories have positive Net Promoter Score (NPS) ratings among advisers who sell their products. The average NPS in the best segment was +19%. Worst was -16%.
Only three variable annuity providers out of 17 managed to get positive NPS scores, according to Cogent Research. “Companies can no longer afford to think of loyalty as a ‘soft’ metric,” said Bruce Harrington, Cogent MD.
enGaugement Comment: Good example of use of NPS in non-consumer setting. We would guess since that the advisers earn a living from the providers it is likely that they will be more critical than consumers making a one-time purchase – all the same, a good benchmark for financial service industries.
| Advisor Loyalty Rankings: Mutual Fund Providers | Advisor Loyalty Rankings: Variable Annuity Providers |
|
| Positive NPS | Positive NPS | |
| 1. American Funds | 1. Ameriprise Financial | |
| 2. Russell | 2. Lincoln National | |
| 3. Franklin Templeton | 3. John Hancock | |
| 4. Dodge & Cox Funds | Negative NPS | |
| 5. The Hartford | 4. Jackson National | |
| 6. Davis Funds | 5. The Hartford | |
| 7. OppenheimerFunds | 6. Genworth Financial | |
| 8. Natixis Funds | 7. ING | |
| Negative NPS
9. Fidelity Advisor Funds |
9. Prudential/American Skandia/Allstate |
|
| 10. JPMorgan Funds | -Industry Average: -14% |
|
| -Industry Average: -5% 11. John Hancock Funds |
11. MetLife | |
| 12. RiverSource | 12. Nationwide | |
| 13. Janus | 13. AXA Financial/MONY | |
| 14. PIMCO Funds | 14. AIG/SunAmerica | |
| 15. Van Kampen | 15. Sun Life | |
| 16. Eaton Vance | 16. Aegon/ Transamerica | |
| 17. AllianceBernstein | 17. Allianz | |
| 18. BlackRock | ||
| 19. Calamos | ||
| 20. Lord Abbett | ||
| 21. Legg Mason Funds | ||
| 22. American Century | ||
| 23. Evergreen Investments | ||
| 24. MFS Investment Management | ||
| 25. DWS Scudder | ||
| 26. Federated Investors | ||
| 27. Morgan Stanley Funds | ||
| 28. AIM Investments | ||
| 29. Dreyfus | ||
| 30. Pioneer Investments | ||
| 31. Putnam Investments |
Tax Firm Effectur hits NPS of 54%
A news snippet to help get some Net Promoter benchmarks – and also interesting to see that companies are going public with NPS scores…
“Effectur, the nation’s fastest growing tax resolution firm, announced today that it has reached a Net Promoter Score of 54%. This rating places Effectur as one of the top American companies in customer satisfaction according to this leading edge indicator.”
CEO and founder Kenneth Johnson said: “The two big challenges are: first, to get an accurate measurement of customer satisfaction, and second, to constantly listen to what your customers are telling you about your company’s service and make difficult changes to improve that experience”.
Full text of press release here.
Get customers to do the hard work…
At one stage, the “Feature Wish List” for the eCommerce web site I managed a few years ago grew until it had more than 70 lines. Most of which were Priority One. Or at least they were to the various team members who advocated them… Each month we would have a spirited discussion based on prioritising the list to the 4 or 5 we could develop and test each month based on cost, easy of implementation, guesses at future revenue, cost of not fixing etc.
Later it occurred to us that we should listen to the customer. Actually that was one of the reasons why four years ago I got so excited about the Net Promoter Score, and eventually drove the development of CustomerGauge.
In a short article on TMC Net, Michael Hawley summarises how to get your customers to help you prioritise your “to do” list. He outlines how to do this based on balancing all elements – customer needs, business value and technical implications.
The “Customer Needs” part is driven by using the Net Promoter Score (NPS) “…to set a baseline for customer satisfaction through a key question such as “How likely is it that you would recommend the site to a friend or colleague?” In your surveys, in addition to this key question, ask other questions about the experience on your site and the potential feature additions, and correlate which features have the biggest impact on the overall satisfaction. You can then assign values to the customer need column in the feature matrix…”
Michael suggests weighting this by a matrix of values: “…Adding together the customer needs, business value and technical cost of each potential feature in your matrix can reveal a clear picture of a development roadmap for your site. The features that are most important for your customers, have the biggest impact on your business and are easiest to implement will surface to the top of the list.”
Using CustomerGauge, this can easily be achieved by using the “Magic Grid” feature to help 1) identify your highest value customers (by spend or profit) and 2) identify your most satisfied/dissatisfied customers in that segment.
By reading their comments you can understand what your most loyal customers think you should add, or are telling you what is annoying them most. A simple ranking will help you to prioritise your list.
