I continue to be amazed a market statistics about how unfocused organizations are in listening and responding to customers.  How can you have a “relationship” with customers if you are not listening? Imagine the success of your marriage if every day you came home and went into broadcast mode about how wonderful you are and never listened or responded to your spouses concerns? 

Here’s some of the data I’m referring to:

In our recent study with CMO Council, “Turning Customer Pain Into Competitive Gain“, we found that while 83% believe that customer experience is either important or essential, only , only 35% rate their level of commitment to customer listening as very high and only 29% have a formal Voice of the Customer program. 

Today, destinationCRM.com reports that 33% of contact centers don’t measure satisfaction and only 40% measure agent satisfaction.  Instead they focus on operational metrics that drive operational efficiencies, not customer loyalty.

All of this at the same time that Businessweek puts “When Service Means Survival” on the front cover.   Businessweek showcases the success of organizations such as zappo.com and amazon.com who have publically stated they put money in the customer experience before advertising. 

There is something fundamentally wrong with the priorities of business executives.  As you consider how to manage the P/L in this cost constrained environment, I would urge you to consider redirecting your advertising budget, directed at trying to tell people what you can do for them, to your customer experience budget and actually deliver what you promise!  

It’s a service economy folks.  Customers are spending less, are more influenced by word of mouth then ever before.  Our benchmark data hero wanted download free shows a continued upward trend in WOM in almost every industry.  If you continue to not listen - you will lose your customers and they will tell others not to purchase from you either.

In reviewing today’s google alerts I saw 3 organizations report their Net Promoter score in public view.  I thought it would be helpful to highlight a few key issues when evaluating your Net Promoter score.  All Net Promoter scores are not created equal.  You may be kidding yourself if your NPS is 93% if you measuring without trustworthy data.

1. What is your sample?  Do you have a strong response rate?  > 30% in B2C and > 50% in B2B would be considered reasonable.  More importantly does the segment represent your most important customers?  In B2B this means that you need to have feedback from Decision Makers, End Users and Influencers.  In B2C this means a sample that reflects your segmentation and revenue distribution.

2. When are you collecting the score?  Is it after a transaction? Or are you asking about the end to end customer experience?  Transactional scores are likely to be a leading indicator of relationship scores.  However, you don’t always measure NPS in transactions, it depends on whether the transaction is a “moment of truth” and whether it represents the key customer segments.

3.  Data collection technique will yield different results.  You are more likely to get a biased response in a phone interview than a web based survey as people are generally more likely to be honest when not faced with a human interviewer.

In our most recent 2008 Net Promoter benchmarks the highest NPS was 84% for USAA and 77% for Apple.  So when I see NPS above 90% I’m suspicious of the methodology for collection and calculation.  You can believe what you want about your score but be sure you are not fooling yourself.

In any case, the important of NPS is not your absolute score, it’s a continuous improvement process to move the needle.  Don’t get hung up on these public displays of NPS as you consider your own, focus on finding ways you can continue to improve the customer experience and create more Promoters.  Then be sure to mobilize those Promoters to help you acquire new customers through word of mouth.  That’s when the game is truly won.

As we weather the current economic climate it’s more important then ever that we focus on customers.  While this may seem obvious, there seems to be an increasing amount of media and blog postings reinforcing this as a way to optimize business results as new customer acquisition becomes harder.  In particiular, marketing executives need to evalaute how their organization is managing the customer experience to optimize the 3 Rs: retention, repurchase and referral. 

Here’s a few items I thought would be interesting. 

• Donovan Neale-May of CMO Council is interviewed on Fox Business News on how marketing should look inward at the customers you have and not cut back on the customer experience.
• DestinationCRM offers a recap of Bruce Temkin’s presentation from the Satmetrix Net Promoter Conference, “Deliver an excellent customer experience, and riches are sure to follow”.
• DMNews offers this blog posting from Jared Tanner titled “Think C-commerce in tough times.

Since the conclusion of our annual North America Net Promoter conference, the buzz continues about Net Promoter and how it helps organizations focus on what matters most, your customers.  With over 350 attendees in San Francisco last week, many organizations are proving that customer experience is increasingly important in this challenging economic climate.  If you missed the conference, you can read all about it on our Net Promoter conference blog.   And for a little something different, check out this podcast recorded live by Joseph Jaffe speaking with attendees at the conference.

For those of you that follow Net Promoter, you are probably aware of the debate created and fueled by hard core market researchers that question it’s merits.  When I first joined Satmetrix this debate was loud in the blogs and over the past 18 months I’ve seen the tide change to many more Promoters of Net Promoter then Detractors. 

In a series of interviews with several executives from one of our clients they all stated one of the key benefits of Net Promoter was having a common metric across functional departments.  Prior to Net Promoter, marketing had it’s measures, support had theirs, and product had yet another.  While many of these metrics still exist to manage their area of the business, they found tremendous value in having a common metric they could align around and measure their total success with customers. 

The VP of Products shared with me the story of their intial adoption of NPS and how his engineers brought to him all the reasons why this was a statistically inaccurate measure.  He didn’t care.  He explained that this was a measure of their success and they had to get on the bus.  He saw it as an objective measure of the strength of their brand in the market and the success of their product in exceeding customer expectations.  His commitment paid off.  They have doubled NPS over a 3 year period and significantly changed from negative product reviews to 95% positive. 

NPS is not about statistics, it’s about organizational focus on customers.  It’s a measure of the quality of your customer experience and the opportunity to grow through increased retention and positive word of mouth.  DUH!

We’ve been working with Tom Fishburne

on a series of cartoons that poke fun at this debate.  Here’s one of my favorites.  More to come in the following weeks.

Well, there is no doubt we live in interesting economic and political times.  Every time you turn on the TV, read the news, or in general check in with the world, something is terribly wrong.  

As organizations look to navigate in these challenges times, this is the time to cling to the assets of your business, your customers.  Today I ran across this article on the New Jersey Nets not only offering free seats, but helping the unemployed find jobs!  Once these consumers get jobs where do you think there loyalty will be when it comes to sports teams and spending?  These guys are really thinking outside the box and using this opportunity to give back and build long term customer loyalty.  Here’s a great quote from their CEO:

“Our belief right now is let’s invest in people who might invest in us later,” Nets chief executive Brett Yormark said in a telephone interview. “In doing so, we can help people who need it most.”

Another interesting move in the heavily hit car industry.  Hyundai addresses consumer fears of investing in a new car when they may lose their job by offering a “no-cost” return policy. 

These organizations are thinking outside the box to build long term customer loyalty.   What are other organizations doing to focus on customer experience and loyalty in this current economic climate?

Our CEO, Richard Owen, and VP of Methodology and Consulting, Dr. Laura Brooks recently published a book call “Answering the Ultimate Question”. The book is a consolidation of our experiences and learning from interviews with over 80 organizations on the best practices for successful Net Promoter programs. 

Fred’s best seller, The Ultimate Question, makes a compelling argument for re-engineering how you look at your customer satisfaction programs and has created a ground swell of adoption of Net Promoter as an industry standard for how well you treat your customers. Adoption of Net Promoter continues to grow across the globe. In just the last week, I received Google alerts from every region of the world

India: Marketing Metrics you Need for Interactive Marketing

Sydney Australia: Investor Strategy Presentation

Brasil: Industry Leaders to Discuss How Superior Customer Experience Can …

UK: Trends and developments in customer contact technology

Clearly, there was a need in the market to simplify the way you measure and improve customer loyalty and Net Promoter filled the void. However, what we found in our research is that while many companies are implementing Net Promoter, not all are implementing it well. Adding the recommend question to your 78 question customer satisfaction survey does not tranform how you look at customer relationships and help you drive a customer centric culture.

In the book, Richard and Laura showcase the best practices at companies such as Virgin Media, Symantec, Experian, and LEGO to name a few. Through this research, we developed the Net Promoter Operating Model to help organizations build an effective Net Promoter program that drives results.  The book content is organized around this model and provides a practical guide for how to implement this in your organization.

Our hope to is further the adoption of successful Net Promoter programs and help organizations realize the benefits of improved customer relationships that create repurchase and referral behaviors.  For more information on the book, here are a few articles that have recently been published based on interviews with the authors:

Net Promoter’s Promoter on What Works, BrandWeek

NPS book explains the process practically, The Wise Marketer

Net Promoter ‘not in competition with MR’, Research Magazine

And you can always buy the book to learn  more.   In fact, it made it on Maeve Naughton’s Christmas List.  Dear Santa, I Want Books for Christmas!

• download Home on the Range

Last week I had the chance to speak with the VP of Service and Support for one of our large software clients. We are interviewing a number of executives to learn more about how they have enjoyed significant increase in their Net Promoter score, doubling it in the past 2 years!

One of the key learnings of this interview was the use of technology to improve the customer experience. Through diligent review of their customer feedback, they learned that making support more accessible and overcoming the language barriers of offshore call centers was for critical to satisfaction and loyalty. One of several improvements they made was to leverage technology to change the consumer interaction with their support centers.

Through the implementation of instant messaging, agents are able to interact with customers and overcome the language barriers. In addition to improve the customer experience, they are also more efficient by handling 1.6 customers at a time. This weeken had the chance to experience this interaction with a cellular provider and truly appreciated the convenience of “push to chat” from the website. The interaction was convenient, effective and resolved my issue without having to sit through a phone queue, type in my account number and then repeat it when the agent answered the phone.

According to a recent mycustomer.com article which only 21% of companies use instant messaging today. This looks like a great opportunity for companies to improve their customer experience, increase efficiencies and improve Net Promoter scores. In the Net Promoter operating model we talk about innovation and transformation as a critical part of improving your Net Promoter scores. Companies like Intuit and LEGO have seen benefits in co-innovation with their customers and innovation of their customer experience through interactive dialog. As support organizations fight the balance of cost reduction and managing the customer experience, look to technology to improve efficiencies for both you and your customers.

As I prepare to attend the upcoming CMO Council event in Monterey I was thinking about the ways Net Promoter relates to marketing. I have always believed and been a proponent of the fact that the brand is the experience, so this wasn’t a new thought by either me or my marketing colleagues. In fact, every marketing conference I have attended over the past year has included the discussion of Net Promoter in almost every keynote presentation.

On this topic, I ran across a few items that directly discuss the issue:

1.  Richard and Laura recently participated in this podcast with Joseph Jaffe about the new book “Answering the Ultimate Question”.  Joseph is a thought leader in the world of new Marketing and author of Death of the 30 second spot and Join the Conversation.  In this podcast they talk about how Net Promoter provides a key measure of organic word of mouth and how companies can’t advertise their way out of a poor customer experience.  Joseph’s words about Net Promoter “everything that it is and everything that it stands for is what companies should be obsessed and fixated on”.

2.  In my Net Promoter google alerts I ran across this interesting posting that included a You Tube interview with Tony Hsieh, CEO of Zappos.  Here is my favorite nugget from the interview.

“As we did more things to improve the customer service and customer experience our customers would keep buying from us and tell their friends about us….We came to the realization one day that all the investment we are putting into the customer experience should just be viewed as our marketing expense”

Zappos truly gets it and has created a cult brand in a short period of time.  I had the chance to hear Tony recently at the WOMMA conference and he spoke about how they build the culture of service within the business and how they use Net Promoter to maintain the focus on the customer.  It made me want to go buy more shoes =)

All of these folks will be speaking at our upcoming Net Promoter conference in San Francisco.  These are great leaders that understand the power of Net Promoter in creating a positive customer experience that creates word of mouth.

As marketers we all know that word of mouth is not only more effective than advertising, but more cost effective and measurable.  Why do marketers keep pouring billions of dollars in advertising when no one is listening?  Take a tip from Zappos, customer experience is the best form of marketing.

One of the key tenants of the Net Promoter approach is the distribution of information distributed to employees and business processes that support closing the loop with customers based on their feedback. Unlike the traditional market research approach where information is collected and analyzed on a periodic basis to evaluate the health of loyalty and satisfaction, Net Promoter is all about employees engaging in a process that improves the customer experience, enables customer recovery and increases loyalty. In fact, my favorite module of the Net Promoter Certification course is the closed loop process design.

However, too often we focus our closed loop processes on following up with Detractors and recovering from bad service or product experience. This blog posting from a Verizon Wireless customer shows just how powerful closed loop process design that included Promoters can be at furthering loyalty and activating word of mouth.

Our CEO Richard Owen recently saw a presentation by the Verizon Wireless team about their Net Promoter program and wrote this blog posting if you are interested in learning more about how Verizon Wireless has embraced Net Promoter to improve their customer experience in this highly competitive market.

Welcome to the new Satmetrix website! Our goals for the site updates include:

• improved navigation to enable rapid access the information you are interested in finding
• better communication of the value of our technology in supporting robust enterprise program deployment
• clearly communicate our focus on Net Promoter as a discipline for building a customer centric culture

Net Promoter continues to gain market momentum. In the past month I have had the opportunity to attend a variety of conference events including WOMMA, Customer Feedback Week, and CMO Club. At each event, companies across multiple industry segments continue the share their success with Net Promoter as an approach for improving the customer experience, increasing customer loyalty and measuring word of mouth.

While the economy continues to dominate our day to day concerns, smart business leaders are maintaining their focus on protecting their most important asset, their customers. Those that maintain commitment and focus on collecting and acting on customer feedback in a way that changes the customer experience and increases loyalty will emerge as the market leaders as the economic times improve.

We hope you take the opportunity to browse our content, watch our videos, and learn more about how Satmetrix can help you to create loyal customers and link loyalty to business outcomes.

I also encourage you to follow our new blogs and we expand our employee blogging and integrate the blogging of Richard Owen and Laura Brooks, authors of the new book “Answering the Ultimate Question”. We will to continue to strive to provide valuable content that will help you and others apply best practices to customer retention and growth.

Look forward to your comments and continued dialog.