Does your Net Promoter Score (NPS) matter?

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DOES YOUR NET PROMOTER SCORE (NPS) REALLY MATTER?

To answer this it is important to really understand what we asking our customers when we use NPS.

Recently, after a perfectly OK meal in a restaurant, someone asked me this question: Would I recommend the restaurant to friends or family? Without hesitation, I said ‘NO’. Queue shock and gasps. The meal was ok, the service was fine, the atmosphere was nice. How could I be so mean? I didn’t think I was being mean. It was all fine but a recommendation from me is a reflection on me, it is saying something about me and my standards – for food of all things. I certainly wouldn’t recommend a food experience that was a bit, well, “meh”.

In the professional B2B world the stakes are a lot higher. Social media – yes that includes LinkedIn – has created a whole business out of self-promotion. Recommending or promoting someone else’s business is an easy way to do this with little effort. It is the ultimate win/win. A recommendation from a customer is the most effective sales tool you can have and in turn, the recommender gets to add value to their brand. But this delicate equilibrium can only exist if your customers trust that recommending your business, and your company’s hard work, will reflect well on them.

So, how do you find out if your customers trust you enough to recommend you? Enter Net Promoter Score or NPS. A clever, albeit obvious, idea –ask them!

And we have been asking, NPS is everywhere and we are obsessed. It can influence the whole mood of an organisation. But can you confidently say that that all of your promoters really are recommending your company? Not until you answer at least the following questions:

Are your Senior Leaders driving a culture of valuing the feedback, not the score?

We are often asked: ‘Do you measure NPS? Head Office needs us to provide an NPS number’.

One does not need a doctorate in psychology to know that if there is motivation, implied gain or actual gain, to reach a target number, then that will drive certain behaviors to reach that number. A commitment to consistently gathering the data with integrity needs to come from the leadership team, visibly and regularly. Helping our clients get this engagement from their leadership team is the first thing we do in any CX project, see how we do it here.

Is your organisation measuring it with integrity, or are you chasing a number?

Teams are often trained to find clever ways of making sure that NPS moves in the right direction. A new and improved NPS score is then announced and celebrated. NPS is very useful but only if the culture and approach for gathering it ensure that it is done with the intention of really understand the customer. It’s crucial that organisations do not distract by chasing and competing for a number. This is about the customer after all.

Is Transactional NPS concealing the truth?

Yes, in the last 5 minutes I had a great experience with your customer service team member. But will I recommend your business just based on this? No, of course not. But I will answer 10 because I am a nice person and I don’t want the individual who just really helped me to suffer. This use of NPS is manipulative and gives you absolutely no insight into your customers’ intentions for recommending you.

So, does your NPS score matter?

Does it reflect if your customers are actually recommending you in the marketplace, or has your organisation become better at understanding how and when to gather the responses in order to ensure a score is achieved?

Only when you can answer that should anyone care what the score is.

Does NPS Work for B2B Companies
* Net Promoter® and NPS® are registered trademarks and Net Promoter SystemSM and Net Promoter ScoreSM are trademarks of Bain & Company, Satmetrix Systems and Fred Reichheld

Susan and Bill have Relationship Problems! (Part III)

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The last time we met Susan and Bill, they were discussing survival tactics. Thankfully, they have managed to get the company back on an even keel – excuse the boating pun – over the past few months and now have a new challenge to face: becoming a ‘Unique’ company.

At the last board meeting, the CEO (an avid sailing enthusiast) asked them to prepare a strategy that would transform the company from an ‘Even Keel’ company to becoming the best in the marketplace.

“I don’t want us to be competing on price. I want us to be seen by our clients as leading edge in the market, innovative, really easy to do business with. Now it’s up to you two to make that happen. Get back to me by 23 September with a strategy for making this company ‘Unique’. And it better be good.”

Unfortunately, Susan and Bill are at loggerheads trying to plot a course towards that ‘Unique’ organisation that their CEO so desperately wants them to become.

EPISODE III: Becoming a ‘Unique’ Company

Susan – Sales Director

“Uniqueness is a simple sales concept. Uniqueness = More Sales. It really is as simple as that. We can become Unique if Bill and the product development team provides me with market-beating products. That’s the thing they can’t seem to grasp.”

Bill – Marketing Director

“Becoming Unique is a complex brand concept. It’s how you are seen vis-à-vis the competition. We’re a services business and the differentiating factor is the quality of our service and account teams, not the products. That’s what Susan fails to grasp.”
Susan’s view is (as usual) very simple: “Give me decent products/services and I’ll sell them. If the products/services are unique, we’ll sell more of them. It’s not really my job to DESIGN them, so don’t go asking me about transforming this company into a unique organisation.”

Bill has a slightly more nuanced view. He accepts that it’s his job to translate customer needs into the sorts of products and services that the clients will love and buy, but he also makes the valid point that he and Susan are in a B2B services business. That means that Susan’s account teams (as well as the Service/Delivery teams) have a key role in crafting a Unique solution and experience for her clients.

Bridging the Gap

As usual, Bill is half-right. And so is Susan.

But let’s start by bringing a little clarity on the terms we are using. Let’s begin with a definition of what ‘Unique’ means in the B2B world.

Uniqueness
In the B2B world, Uniqueness means that your clients have a fantastic Experience working with you, and that you provide a world-beating Solution for them.

Experience is a measure of how easy you are to do business with and if your clients see you as a true business partner that is critical to their success. You can have the best products or services in the world but if your clients can’t work with you, they won’t see you as a true business partner.

Solution is a combination of innovation, leading edge and value-for-money. These are three related but slightly different concepts. If you get good scores for all three, the chances are that you have an offering that can help your clients improve their standing in the marketplace in a way that none of your competitors can provide. When we talk about Solution we’re not just talking ‘product’. As Bill says, it’s as much about how the account managers, sales and delivery teams position your company’s product or service, as it is about the product/service itself.

Is your company ‘Unique’?

So when Bill and Susan’s CEO talks about wanting to be a Unique company, he’s really talking about building a B2B brand that excels at all the different elements that we group under the headings Solution and Experience. And that means the Bill and Susan need to work together to get all those elements right. But as the methodology above shows, you can’t build a unique B2B brand without having an excellent service to underpin it. So Bill and Susan and going to have to rope in the Operations Director as well. We wish them well on their journey.

Ultimately, the answer to the question about whether your company is Unique will be dictated by your customers. But you’ll never know if you don’t ask them.

Contact us if you want to find out.

Susan and Bill have Relationship Problems!

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The Susan & Bill Trilogy

Susan and Bill have relationship problems.

When we updated our Customer Relationship Quality (CRQ™) methodology in 2014, we created a storyline around two fictitious characters. The first was Bill, a thoughtful but somewhat introverted Marketing Director. His counterpart was Susan, a more aggressive but low-attention-span Sales Director. They may be fictitious but they bear more than a passing resemblance to some sales and marketing directors we have met in the past.

Episode 1 finds Susan and Bill having relationship problems. Well, their problems are primarily related to understanding the relationship their company had with its main corporate clients. However, there is also some evidence of tension between Susan and Bill themselves. This is the sort of natural tension that exists between Sales and Marketing in any large organisation.

EPISODE 1: Susan and Bill have Relationship Problems!

Susan – Sales Director

“I need real customer feedback. Something that helps my sales teams manage their key accounts. For the long-term. All Marketing are interested in is some box-ticking exercise for the folks in HQ.”

Bill – Marketing Director

“I need to provide HQ with Net Promoter Score (NPS®) metrics. It’s our corporate policy. For some reason, Sales just don’t seem to get it. NPS is a useful tool if they could only figure out how to use it properly.”

Net Promoter Score

Net Promoter Score (NPS) is a simple easy-to-use metric for measuring customer loyalty. Many large, well-known companies now use it as a key business metric. The concept behind NPS is simple: loyal customers are more willing to recommend you to a friend or colleague. To find out how loyal your customer base is, measure their willingness to recommend. The higher your NPS score, the more loyal your customer base is.

NPS is easy to calculate. It’s based on a single question: “Would you recommend Company XYZ to a friend or colleague?”. The problem is that Sales Directors find it hard to turn the answer to that question into a clear set of actions. Actions that can be used to improve a complex web of relationships in a large corporate account – or across an entire customer portfolio.

Does NPS work for B2B Organisations?

Yes, but!

On its own, NPS is not sufficient for understanding complex B2B relationships. It does provide a good starting point but in complex B2B relationships it must be supplemented by other metrics. These metrics must help account managers take action at an INDIVIDUAL account level, as well as helping senior executives focus on a small number of strategic initiatives across ALL accounts.

Deep-Insight’s unique Customer Relationship Quality (CRQ™) methodology helps Sales Directors do exactly that. CRQ identifies which accounts are its greatest Ambassadors, and which on the point of defection (Stalkers and Opponents). More important, the CRQ methodology identifies – for each account manager – what needs to be done to transform an Opponent into an Ambassador.

Relationship Segmentation

NPS tells you if you have a problem but not how to fix it. CRQ tells you what the problem is and exactly how to address it.

Back to Susan and Bill

Bill needs NPS data in a comparable format to data from other parts of the organisation, with feedback on brand, image, product and pricing. With Customer Relationship Quality (CRQ™), Bill gets his NPS data in exactly the way he needs it. That keeps Bill and his Marketing team happy.

On the other hand, Susan gets detailed account-level customer relationship feedback for her sales teams. Each account manager gets an account report for every client. They can looking at levels of Trust and Commitment for each client so that they, and Susan, can avoid any surprises when contracts come up for renewal. That keeps Susan and her Sales team happy.

Join us next week for EPISODE 2.

Trusted Relationships = Consistently Good Service

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Trusted Relationships

At Deep-Insight, I spend a lot of my time trying to help our clients figure out how to build strong trusted relationships with their B2B (Business-to-Business) customers. Trust is all about honesty, fairness and acting with integrity. It’s one of the most basic elements of human interaction. And perhaps the most basic element of good account management. As they say:

“People buy from People” and
“You don’t buy from a person you don’t trust”

B2B is all about establishing strong people-to-people relationships. Trusted, committed relationships. And yet, here’s an interesting statistic. When we look at the correlations* between the various drivers of customer retention in our Customer Relationship Quality (CRQ™) methodology, guess what the strongest correlation is?

It’s between Service Performance and Trust.

When I first noticed this correlation, I was somewhat puzzled. It didn’t surprise me that Trust was strongly correlated with Service Performance. But why is it the strongest link of any of the elements in our model? Why does the level of service have such a strong impact on the degree of trust between the client and a service provider?
 

The Importance of Consistently Good Service

The answer is actually straightforward, when you think about it in real life. Many – no, most – of our clients operate complex businesses where their interaction with customers is based on a complex (and sometimes bewildering) array of services. Even manufacturing companies are heavily service-orientated these days. As an account manager or account director, you might like to spend your time having meaningful conversations with senior executives about where their business is going and how you can help. That is important but the reality of day-to-day interaction is often explaining why that critical piece of machinery has not been delivered on time, or why the network that manages their business has fallen over again.

When the basic delivery of service is a constant issue and source of frustration for customers, account managers find the trust built up with key client contacts erodes quickly. Responses like “I’ll sort that out for you” are fine, as long as the service issue really is sorted out. But ongoing service problems can be notoriously problematic. This is particularly true when processes or technology need to be changed in order to fix what’s broken. It’s frustrating for the client and it’s frustrating for the account manager but, most important of all, it’s damaging to the long-term relationship. Ultimately the revenue stream from that customer will erode.

Trusted relationships are based on consistently good service delivery. That’s what the data says. And that’s why getting the service right (and right first time) is so critical.
 

* Correlations based on tens of thousands of customer responses over more than a decade. Service – Trust R-Squared = 0.74