Notes from Net Promoter Conference, London -30 Apr - 1 May"The only function of economic forecasting is to make astrology look respectable..." Richard Owen, CEO SatMetrix CEO opened the London Net Promoter Conference with a quote from J K Galbraith, making a rather sombre start to the event. His theme: how companies cope with a recession (sub text: they should rightly spend more on customer focus).Particularly relevant to current downturn in financial markets was insight into how credit companies had artificially inflated Net Promoter Scores (NPS) by "buying" a high initial satisfaction from customers by offering tempting low start deals (i.e. mortgages). Customer dissatisfaction comes later when having to pay steep bills. Conclusion: Short term offers don't work. Finance companies that don't offer massive incentives to entice a mass of low quality customers are more likely to survive.Next point was about what actions companies take in a recession (you see, all quite dour - at times he made Gordon Brown seem cheerful). Trick is to act like a small company. Instead of cutting costs, you focus on customer. Plenty of supporting stories here - and he took three examples: Dell, Starbucks and Charles Schwab who all have had tough times recently, and all three got their original founder back to make a turnaround. Apple also springs to mind. This is a case of "Going Back To Our Roots" and getting in the early entrepreneurial spirit.Last point: Small focus groups are like customer Zoos. Now we have the technology to address all our customers, why not see the real thing, and go on safari?
ORANGEDominique Soudais from Orange, gave a passionate description of the road to NPS that his company (former France Telecom) had been on. Top points:
- NPS used as a lever for organizational change.
- NPS is a common currency in their company - like the Euro - all understand it. Previously they had 23 different measures of customer satisfaction across the organization
- Lots of NPS ambassadors across companies
- Many customer callbacks to understand detractors, but also help convert to promoters/
- Pushed up NPS 6 points in 8 months, target this year is 10 points.
- "Puts customer in the room" at exec meetings
- They have correlated NPS to customer churn rates
LEGOConny Kalcher from Lego spoke about using user communities.Fact fans: There are 52 Lego bricks for every man, woman and child in the world, plus Lego is the largest tyre manufacturer in world*.Story here is less about NPS, more about how listening to community of customers can change the way a company thinks and grows. She picked out how one customer storey, a Mr Richard James, who was a Lego fan and bought 1000's of pounds of Lego each year, but was miffed when Lego did not care why he cancelled an order. The customer escalated it, and it became a turning point in their company to start to listen to customers (and also to heavily segment them).They now have formalized their customer experience loop. For Lego, Voice of the Customer is something they take very seriously, and take steps to generate as much as possible through own online communities of fans. Nice metric: Which product box generates most calls?Conny has a good handle on the economics of this: Each passive converted to a promoter generates 43€ sales. Each detractor converted to a passive generates €27. And promoters are worth €70 more in average sales than a detractor.The community generated half a million visitors to Lego events in 2007. Conny outlined some of the benefits, but also difficulties they have working with them.Sadly, the conference organisers had not been able to afford internet access, so she could not show how Lego fantards are making tribute videos and putting up on YouTube. Here's an example: the Lego video circle circle dot dot. But it's here.
* For wheels of a size you can hold in your fingers!
LOGITECHGlenn Rogers, Logitech told another good "NPS changed our culture" story. He spoke passionately about how focus on customer is changing Logitech, to the extent that NPS is being used in product planning i.e. how many detractors/promoters will product X generate...Learnings:
- You can't have a special team of people reading Verbatim comments. You have to give them directly to the people who need info (this also came out later: don't do analysis - let the front line people who deal with customers do it).
- Some products tweaked through their life as a result of initial NPS of 3 rose to 19, then 30.
- Promoters are worth 1.63x value of Passive. Detractors worth 0.06x that of passives. 400 verbatim responses give a complete enough picture for one product - diminishing returns after that. 152K responses on initial blast. 40K per qtr ongoing, survey sent 2 weeks after s/w install.
- Did it arrive in expected time (metric: Length of Time of delivery)
- Did it work out of the box? (metric IFIR Initial Field Incidence Report)
- If it went wrong, was it fixed quickly (On Time First Time fix)
VIRGIN MEDIAVirgin Media's Sean Risebrow related a great story of a fearless "big bang" NPS implementation, with complete aircover from Chief Exec. When you hear Sean speak with his enthusiasm for the brand and what they are doing, you just want to sign up for Virgin straight away. I can imagine working for Sean is a great experience... and I am guessing that Virgin is starting to make a difference in the Quad-Play Media Market. I wish them luck!Observations:
- Promoters give you one-liners, Detractors write you stories of what went wrong.
- 250K comments back: Seems massive, but actually only 10 comments per week per team leader.
- At the start, focus on your 10s to show good engagement. Build a "10 wall" of good customer experiences.
- Don't interpret the customer issues centrally. Let them go to the teams and get them to understand and solve tactically.
ALLIANZAndrew Clayton from insurers Allianz presented one of the evergreen NPS stories - they have lots of experience with the metric. Still, a few new interesting points:
- "Top down" vs "Bottom up" NPS. - embedded in management dashboards.
- It's a key management KPI
- 91% of their customers take part (b2b)
- Growth is linked to NPS: Their best in class divisions measured by NPS are growing 10%
- Well defined scope
- Included many experts from across the business especially in touch points
- Cross functional teams with in-depth training
- Effective communications and identifying/implementing quick wins.