2015_Using-NPS-Successfully
- 1. Developing a Successful NPS™ Program Developed For Client XYZ Prepared by: Brett Sharp, MMR Sharp Business Intelligence m: 470.774.3745 sharp.brett@gmail.comApril 3, 2015
- 2. Brett Sharp, MMR Customer Success/Experience Strategic Marketing Insights Breakthrough Innovation Turning Data Into Action Customer Experience Executive passionate about using multiple data sources (transaction and relationship surveys, call centers, travel agents, sentiment analysis, channel feedback, etc.) to drive business strategy and ensure commercial success. Extensive experience understanding customer expectations and motivations, guiding operational enhancements, and developing customer feedback programs to ensure successful implementation of business intelligence platforms and scorecards across diverse industry verticals, including Intercontinental Hotel Group, CenturyLink, ExxonMobil, GS1 US, Giant Cement, Unilever, Pepsi, Energizer, and Hill’s Pet. Strategic thinker who provides consultative guidance and practical application of insights to complex client challenges across: Packaged Goods, Retail, Durables, Hospitality, Technology/Telecom, Home Improvement, Finance and Healthcare. Highly experienced in market dynamics of both business-to-business (B2B) and consumers (B2C) – including multi-tier structures with a B2B core client with consumers as ultimate end-users. Experienced in most research protocols, including customer experience, new product innovation, brand & communications, segmentation/positioning, qualitative exploration and in-store shopper experience. Masters in Market Research (MMR) from Southern Illinois University at Edwardsville. Bachelors in Marketing from Fort Lewis College in Durango, CO. Interests include: experimenting with new culinary tastes and styles, listening to local live bands from a wide variety of musical styles and most outdoor activities… regardless of the weather.
- 3. Goals and Objectives…for Discussion • Corporate Growth Strategy – Market-share objectives. – Revenue/profitability objectives. • Organizational Structure and Accountability – Divisional reporting structure. – Divisional/group goals, metrics and accountability. • External Market Environment and Influences – Industry assessment as Dynamic, Growth, Mature, Flat, Declining. – Competitive threats, actions, or likely potential response. – Industry reputation, category benchmarks or existing press coverage regarding brand, quality, ethics, service, market expansion, financials, employee engagement, public relations, investors, etc. April 3, 2015 © 2015 Sharp Business Intelligence 3
- 4. Net Promoter Score (NPS)™ Overview • History of NPS – Harvard Business Review (HBR) article in 2003, Frederick Reichheld proposed new customer satisfaction metric with intent to improve customer repurchase rates. – He claimed it was “100% accurate in determining revenue growth” and termed, “The One Number You Need to Grow”. – Such claims gained immediate popularity among the C-suite and NPS exploded in usage…and is now included in three-quarters of Fortune 100 customer experience programs. – Since 2007, tremendous debate has arisen regarding the efficacy of NPS for growth predictions. IPSOS Loyalty published an article in Journal of Marketing clearly refuting success and Maritz similarly published an article in Marketing Management – both led to Reichheld restating NPS is “simply irrelevant” in some markets and industries. April 3, 2015 © 2015 Sharp Business Intelligence 4
- 5. Pros of NPS™ as a Growth Metric • Simplicity of a “one-number metric for success”. • Unity of organization and staff around important goals. • Senior leaders LOVE simple analysis solutions. • Can help develop a customer-centric culture from top-down. • Interpretation is easy for most to understand and embrace. • Some type of Recommendation question is included in roughly 90% of all customer experience feedback programs. • Benchmarking is super easy (though not always relevant) April 3, 2015 © 2015 Sharp Business Intelligence 5
- 6. Cons of NPS™ • Lack of concrete evidence linking to financial performance (e.g. profit, revenue growth, or investor performance). • May work adversely in mature or complex industries where a majority of potential customers may have already tried brand. • NPS is purely an outcome metric and alone will not provide detailed diagnostics to truly understand “why” and “what”. • Measure can be highly volatile with small sample sizes, in mature markets, or sectors with long purchase cycles. • “Halo effect” of response bias of most satisfied customers being ones to respond and NPS’ assumption of a positive response • NPS is often solely a closed-ended question and doesn’t allow for clarity April 3, 2015 © 2015 Sharp Business Intelligence 6
- 7. “Sand Traps” to Avoid with NPS™ Based on over 10 years experience guiding companies as they develop NPS – or other Customer Experience metric – programs into their organization, here’s some actionable tips to help you prevent the potentials pitfalls. 1. Assuming it is the ONLY number you need to know. 2. Making NPS one person’s or one division’s responsibility. 3. Building too many OR too few questions in the survey. 4. Managing very low customer response rates. 5. Not implementing timely follow-up processes into system. 6. Forgetting “lessons learned” from previous waves of feedback. 7. Keeping any learning and future plans to yourself. April 3, 2015 © 2015 Sharp Business Intelligence 7
- 8. Summary of Critical Success Factors “Sand Traps” to Avoid 1. Assuming NPS is ONLY number you need to know. 2. Making NPS one person’s or one division’s responsibility. 3. Building too many OR too few questions in survey. 4. Managing very low customer response rates. 5. Not implementing timely follow-up processes into system. 6. Forgetting “lessons learned” from previous waves of feedback. 7. Keeping any learning and future plans to yourself. Recommendation 1. Build a customer-centric focused feedback program that both monitors and diagnoses “what” and “why” changes occur. 2. Customer-centricity is only successful if fully embraced throughout entire organization – starting with Senior Leadership on down – by creating a fully closed-loop process for feedback and action. 3. Survey length is ideal if 5-10 minutes, which can easily include roughly 8-20 relevant questions. 4. Shorter surveys and relevant questions enhance response rates (expect 15-40% early on) 5. ANY customer with an issue NEEDS to have it resolved quickly. Often a multi-pronged approach is required to fulfill the diverse needs of each group simultaneously; as sequential can be risky. 6. Track and publish all improvements, learning, and changes made to program for all to be aware. 7. Similar to #6, track and publish internally and externally all changes, learning and actions taken. Remember, customer-centric means full transparency! April 3, 2015 © 2015 Sharp Business Intelligence 8
- 9. Key Issues Going Forward • Near term Obstacles to Adoption – Identify what is ultimate goal of customer experience program and create metrics to ensure accurate measurement and progress. – Determine what units/divisions require own group scores. – Consider aspects of internal implementation and customer adoption. • Long term Obstacles or Areas of Resistance – Assess organizational structure and ability to respond to issues. – Clearly state consequences of lack of action or adequate structure. • Consider All Resources Involved – Financial requirements needed for proper implementation. – Personnel needed, either internally or externally. – Consider promotion activities, services offer/develop, etc. April 3, 2015 © 2015 Sharp Business Intelligence 9
- 10. Suggested Immediate Next Steps • Prepare thoroughly prior to rolling out any NPS program. – Develop “Core Team” of cross-functional advisors (accountability). – Identify all components of closed-loop system for feedback and action. – Determine appropriate NPS question modifications, if needed. – Identify key diagnostic questions and “root cause” measures to include. – Consider incorporating NPS as part of a composite metric for stability. • Set clear expectations with senior leadership on advantages and limitations of program. – DO NOT incorporate NPS into corporate compensation metrics. – Full transparency and disclosure – at all levels internally – and externally with customers is imperative to ensure authenticity. – Communication needs to be regular, relevant, and right (accurate). • Remember, this is a journey towards changing your organization to be one of true customer-focus…it takes time! April 3, 2015 © 2015 Sharp Business Intelligence 10