People Aren’t Perfect, Design Around Their Biases

Every day, people are faced with innumerable choices, and methodically weighing the pros and cons of each one is not only unnecessary, it is also mentally draining. In order to ease this cognitive burden, people have evolved two modes of thinking—intuitive thinking and rational thinking—to help us make decisions more efficiently. 1611_2typesofthinking2Intuitive thinking—also known as System 1 thinking—is fast, effortless, automatic, and takes place in our unconscious, while rational thinking—also known as System 2 thinking—is slow, effortful, logical, and takes place consciously. Intuitive thinking actually helps us reach successful conclusions more quickly and economically than rational thinking.

Intuitive thinking relies heavily on existing mental shortcuts—known as heuristics—and on cognitive biases. Heuristics are simple rules of thumb that our brains have evolved to help us reach satisfactory—though not always optimal—decisions swiftly and efficiently. Sometimes, however, heuristics fail and lead to cognitive biases, which are systematic errors in the way we think. For instance, people:

  • Are more affected by losses than by gains. One of the most important underlying principles of human decision-making is called Prospect Theory, which holds that humans do not make decisions based on a rational evaluation of the final outcome, but rather on an unconscious evaluation of the potential gains and losses of each choice.
  • Prefer simplicity over complexity. Biases and heuristics are all about lightening the cognitive load, so it is no surprise that people tend to choose options that are easier to mentally process, even when a more complicated option is actually better.
  • Are affected by current emotional and visceral states. Like cognitive processes, visceral states and emotions play an essential role in helping people make successful choices, but sometimes they can lead to biases. For example, people are more impulsive when they are hungry, thirsty, sexually aroused, or in other heightened states of emotion.
  • Are heavily influenced by those around them. People are naturally social creatures who automatically imitate the actions and mimic the emotions of those around them.
  • Make decisions based on context. Decisions are not made in a vacuum; rather, they are extremely dependent on context. Context can include the physical environment in which a person makes a decision, the unconscious priming effects a person encounters, how a decision is framed, and what other choices are available for comparison.
  • Misjudge their past and future experiences. Our memory is not like a videotape; it does not record every moment of an experience, placing equal emphasis on each second. Instead, it is like a camera, taking snapshots at certain crucial moments and then retroactively judging the experience based on those snapshots.

For more information on how to incorporate these biases into your efforts, see the report Behavioral Guide to Customer Experience Design.

The bottom line: Embrace human biases, don’t ignore them.

5 Market Research Lessons From Election Polling Miscues

161111_tornmarketresearchIn the NY Times article Pollsters Face Hurdles in Changing Landscape and Aaron Zitner discuss a number of reasons for recent high-profile polling failures, the Brexit vote and the U.S. presidential election.

Why should customer experience (CX) professionals care? Here’s what they say in the article:

The outcome also raises questions about the research businesses rely on to test new products and measure customer behaviors, since many of the same survey methods are used for market research.

The article brings up some good reasons for the poor predictions:

  • People are less likely to answer surveys, so it’s harder to get representative samples.
  • It’s more difficult and expensive to reach people via cell phones than it was by landline.
  • Decision factors are changing. For instance, education level was a more important decision driver in this election than it was in 2012.
  • The people who choose to respond to polls don’t fully represent the population.

My take: I’ve been talking about the need to shake-up market research for many years. As a matter of fact, my 2011 post Market Research Needs An Overhaul remains relevant today. All of the issues with recent polling projections are similar to what many companies face when trying to understand their customers. Here are five thoughts on how to prepare your market research efforts for the new realities:

  1. Embrace outliers. The traditional approach for dealing with data points that don’t fit a model is to ignore them or discount them as being “outliers.” But these counter-trend pieces of data can be much more than that. They may be a window into an emerging trend or a small signal about a set of customers that your current research is missing. When you see an outlying datapoint, don’t ignore it anymore. Think about what it might be telling you, and what insights you may missing.
  2. Always ask “who are we missing?” All research processes, including surveys, are biased in many different ways (see my Latest 9 Recommendations for NPS). You can minimize and address some of the biases, but there’s always the risk that you just don’t see some of them. One of the things you can do is to proactively look for the biases. Always seek to define the populations of people that you are missing or under-representing in your research, whether it’s caused by a demographic or attitudinal blind spot. If you can’t find them, then you haven’t looked hard enough.
  3. Listen, don’t just calculate. A lot of my insights about the election came from listening to what people were saying, not from crunching datasets. As the environment around your company changes, you need to spend a lot more time with qualitative, unstructured content. Why? Because structured data collection reflects historical assumptions, and may very well be missing the key variables required to fully understand changing customer attitudes and behaviors.
  4. Over-emphasize recency. If you’re building a predictive model, make sure that it is very sensitive to recent data. If you’re mapping out a long-term trend or trying to fit the data to a historical model, it may take a while for you to identify a substantive change in the environment. Even if you don’t change your core model, look at what it says if you significantly over-weight recent data points.
  5. Modernize your leadership. The way that organizations can and should use data is one of the shifts that is making traditional management techniques obsolete. That’s why you should adopt what I call Modernize Leadership: Shifting 8 Outdated Management Practices. This requires making a shift to Engage & Empower, Learn & Adjust, Detect & Disseminate, Observe & Improve, Purpose & Values, Strengths & Appreciation, Culture & Behaviors, and Experience & Emotions.

The bottom line: It’s hard to project from the past when the future is changing.

The Rise of Mobile CX (Infographic)

I’m sure you’re not surprised to hear that mobile customer experience is on the rise, but this infographic provides some more insights on what that shift looks like. It pulls from a variety of Temkin Group research, including: Data Snapshot: Channel Preferences Benchmark, 2016, Five C’s of Mobile VoC Disruption, Data Snapshot: Media Use Benchmark, 2016, and The State of CX Metrics, 2015.

You can download this infographic in different forms below, including in poster form.
the-rise-of-mobile-cx

You can download (and print) this infographic in different forms:

The bottom line: Make sure you have plans to be mobile first.

Design Lesson From… MA Department of Transportation

As you read the title of this post, you were likely thinking that there’s been a typo. Departments of Transportation (DoT) around the country have been called a lot of names, but good designers isn’t a common label. In this one case, though, I want to give a shout out for a part of the MA DoT’s roll out of MA’s new toll-less EZPass system.

1611_tollboothsbyeIn the past, if you did not have an E-ZPass transponder, you could go to a separate lane on the Mass Pike and pay a toll operator. The new system will completely eliminate the need for toll operators. If a car doesn’t have a transponder, then the system will take a picture of the license plate and charge the car owner with the toll fee plus a penalty for not using a transponder. So over time, the goal is for everyone to use a transponder.

Here’s where the design part comes in. The MA DoT is having a grace period of six months during which people who get a penalty for not using a transponder can get those fees eliminated if they get a transponder. Here’s why I think that it’s good design:

  • No matter how much the DoT tries to communicate the upcoming changes, a very large number of people won’t really understand (or care about) what’s going on.
  • The point at which many, many people will understand (and care about) the changes is when it truly affects them… when they receive their first bill with penalties for not using a transponder.
  • By providing a way to eliminate the penalties, the DoT will motivate a large number of people to get transponders — instead of just being upset with the DoT.

The key lesson here is that you need to design interactions based on how people really behave, not on how you’d like them to behave. While it would be great for everyone to understand and care about the E-ZPass changes prior to them going into effect, that would not be realistic. Most people do not pay attention to situations until they are directly affected by them. In this case, that moment is likely on the arrival of their first bill. So it is critical to design an experience around that moment which drives the behavior that the MA DoT is looking for — getting an E-ZPass Transponder.

In order for this part of the program to really work well, it is critical that those initial bills be designed to clearly communicate the option to eliminate the fees, and provide a simple path to do so. If not, then forget everything that I’ve said about good design; it will be a poor experience.

The difference between success and failure at this point comes down to what I’ve called the Design of Little Things (DoLT). All too often, people get the big things right, but fail to obsess about the DoLT that will make or break the experience.

I will be going through some toll booths without a transponder so that I can see what the experience looks like. If I find something interesting, then you might see a follow-up post.

The bottom line: Design for how people really behave, and obsess about little things.

Exploring Multiple Emotions During Contact Center Interactions

In a previous post, I discussed results from a joint study that we conducted with Mattersight Personality Labs (MPL) to examine customer emotions within contact center interactions.

MPL isolated the occurrence of four specific emotions: joy, anger, sadness, and fear in more than 118,000 calls across 11 large brands. In addition to detecting the customer emotion, we also analyzed the lengths of the calls, the percentage of calls transferred to other agents or supervisors, and the Net Promoter® Score (NPS®) provided by customers right after their calls.

To normalize the analysis across companies, we divided the data for individual calls by company averages. So a “1.0” is equal to company average.

While the previous post examined the individual emotions, this post looks at the combinations of the four emotions. While less than 1% of callers experienced all four emotions, it happened during more than 650 calls­—more than enough for us to analyze.

1610_emotioncombinations

As you can see in the chart above:

  • Joy plus Fear creates the longest calls. When the calls contain all four emotions, they are almost two and a half times as long as an average call. The next two combinations, which are also more than two times as long as an average call, also contain joy and fear.
  • Multiple emotions create longer calls. The only calls that are shorter than average are those where we could only detect sadness. The next shortest calls were those that only had joy and anger.
  • Anger plus Fear creates the most transfers. When callers exhibit both anger and fear, the calls are transferred at a rate that is seven times the average. The next highest transfers also happen when the caller demonstrates fear.
  • Joy creates the fewest transfers. The three types of calls that have the lowest transfer rates all contain joy, as do six out of seven. The only types of calls without joy that also have below average transfer rates are those that only contain sadness.
  • Joy raises NPS. When a caller feels only joy, the call results in the highest NPS. Joy is also a part of the calls that earn the two next highest NPS.
  • Anger plus other emotions lowers NPS. The lowest NPS occurs whenever anger is combined with another emotion. The worst combination is anger plus sadness.

The bottom line: Anger and fear are terrible emotions to occur on a call.

Report: State of Voice of the Customer Programs, 2016

1610_stateofvocprograms2016_coverWe published a Temkin Group report, State of Voice of the Customer Programs, 2016. This is the sixth year that we’ve benchmarked the competency & maturity of voice of the customer programs within large organization. Here’s the executive summary:

For the sixth straight year, Temkin Group has benchmarked the competency and maturity levels of voice of the customer (VoC) programs within large organizations. We found that while most companies think that their VoC efforts are successful, less than one-third of companies actually consider themselves good at reviewing implications that cut across the organization. Respondents think that in the future, the most important source of insights will be customer interaction history and the least important source will be multiple-choice questions. And although respondents believe that technology will play an increasingly important role in their VoC efforts, they also cite “integration across systems” as the biggest obstacle to their VoC success, and this concern has only grown in the past year. In addition to asking questions about their VoC program, we also had respondents complete Temkin Group’s VoC Competency and Maturity Assessment, which examines capabilities across what we call the “Six Ds”: Detect, Disseminate, Diagnose, Discuss, Design, and Deploy. Only 16% of companies have reached the two highest levels of VoC maturity, while 43% remain in the bottom two levels. When we compared higher-scoring VoC programs with lower-scoring programs, we found that companies with mature programs are more successful, they focus more on analytics, and they have more full-time staff, more strongly coordinated efforts, and more involved senior executives.

See the State of VoC reports from 2010201120132014, and 2015.

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Here are the results from Temkin Group’s VoC Competency & Maturity Assessment:

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Modernize Leadership: Detect and Disseminate

1609_ML_DetectDisseminate

In a previous post, I described how today’s management techniques reflect outdated assumptions of technology-enabled practices, human behavior, and the meaning of success. That’s why organizations must shift to what I’m calling Modernize Leadership.

I’m writing individual posts for each of the eight key changes required to modernize leadership. In this post, I’m examining one of them, the shift from:

Amass and Review to Detect and Disseminate

Here’s some more information to better understand this shift:

Outdated Thinking
Here are some ways in which leaders must change how they view the world:

  • Leaders rely on periodic, deep understanding of the business. But the pace of change is increasing, and that point-in-time understanding of the past does not always provide a meaningful view of the future, or even how to compete in the present. Leaders need a more continuous set of insights.
  • Leaders often act as if customer insights are difficult to gather, so they periodically ask for a large project to provide a Powerpoint-dump to their executive teams. But current technology allows for more ongoing collection and presentation of insights.
  • Customer insights teams are required to focus many of their resources on the needs of the leadership team, providing support for a few key decisions. At the same time, a myriad of decisions across the organization are being made without the benefit of strong customer insights.
  • Customer insights teams aim to provide “statistically significant” insights, requiring large datasets and extensive timeframes for collecting data. But it takes only a few datapoints to create actionable insights when they are presented to employees across the business who have more context about the business.

Galileo Galilei, the father of the scientific method, once said:

All truths are easy to understand once they are discovered; the point is to discover them.”

Modernized Leadership Actions
Here are some ways in which leaders should act based on a modernized perspective:

  • Build a customer insight backbone. Given the state of technology, companies need to stop viewing customer insight as a set of market research projects and see it as a core organizational infrastructure. That’s why companies need to build what we defined in 2010 as customer insight & action (CIA) platforms. The goal should be to enable a continuous flow of customer-insightful decisions.
  • Distribute role-based insights. All employees make decisions on a regular basis, and many of those would be improved with a deeper understanding of customers. But distributing a common set of monthly Powerpoint slides is not the answer. Engineering teams, for instance, don’t need the same information as the legal department. Companies must tailor insights for each organization to provide the right information at the right time to fuel the decisions that are being made by employees with different roles.
  • Tap into the power of context. While analysis of large datasets may be great, people across an organization can often act on smaller timely nuggets of data. A call center supervisor, for instance, only needs to see one negative piece of customer feedback to kick off a coaching session if she is already concerned about that phone rep. These relevant datapoints fuel what we call contextual insights.
  • Raise all employees’ customer-awareness. Since insights can be more easily distributed, leaders should look for ways to tap into the insights in order to make everyone in their organization more aware of (and empathetic to) customers’ needs and perceptions.

The bottom line: Turn customer insight into a continuous, distributed capability.

Report: Net Promoter Score Benchmark Study, 2016

1610_npsbenchmarkstudy_coverWe published a Temkin Group report, Net Promoter Score Benchmark Study, 2016. This is the fifth year of this study that includes Net Promoter® Scores (NPS®) on 315 companies across 20 industries based on a study of 10,000 U.S. consumers. Here’s the executive summary:

As many large companies use Net Promoter® Score (NPS) to evaluate their customer loyalty, Temkin Group measured the NPS of 315 companies across 20 industries. With an NPS of 68, USAA’s insurance business earned the highest score in the study for the fourth year in a row. Four other companies also earned an NPS of 60 or higher: Cadillac, USAA’s banking business, Apple, and USAA’s credit card business. In addition to earning some of the top scores, USAA’s banking, credit card, and insurance businesses also all outpaced their respective industries’ averages by more than any other company. Comcast, meanwhile, earned the lowest NPS for the second year in a row, coming in just below Time Warner Cable, Cox Communications, and McDonalds. And while all 20 industries increased their average NPS from last year, utilities enjoyed the biggest improvement in its score. Out of all the companies, US Airways’s and Advantage Rent-A-Car’s scores improved the most, whereas TriCare’s and Lexus’s scores declined the most. On average across the industries, the youngest consumers gave companies the lowest NPS, while 35- to 44-year-olds gave them the highest NPS.

See the NPS Benchmark Studies from 2012, 20132014, and 2015.

Here’s a list of companies included in this study (.pdf).

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Here are the NPS scores across 20 industries:
1610_rangeofindustrynps

Here are some other highlights of the research:

  • Five industries toped the list with an average NPS of 40 or more: auto dealers, software, investments, computers & tablets, and appliances.
  • The bottom scoring industries are TV service providers, Internet service providers, and health plans.
  • USAA’s insurance, banking, and credit card businesses earned NPS levels that are 30 or more points above their industry averages. Five other firms are 20 or more points above their peers: com, credit unions, Chick-fil-A, Apple, and Trader Joe’s.
  • Five companies fell 25 or more points below their industry averages: RadioShack, Motel 6, eMachines, McDonalds, and Days Inn.
  • US Airway’s NPS increased by 31 points between 2015 and 2016, the largest increase of any company. Eight other companies improved by 25 or more points: Fifth Third, 21st Century, Fujitsu, DHL, MetLife, HSBC, Commonwealth Edison, PSE&G, and Hannaford.
  • TriCare, Lexus, Mercedes-Benz, Baskin Robins, and Nordstrom had double-digit declines in NPS between 2015 and 2016.

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If you want to know what data is included in this report and dataset, download this sample Excel dataset file.Screen Shot 2014-10-17 at 4.05.17 PM

P.S. Net Promoter Score, Net Promoter, and NPS are registered trademarks of Bain & Company, Satmetrix Systems, and Fred Reichheld.

Start Talking About Emotions (Video)

To help celebrate “The Year of Emotion” on CX Day (and beyond), Temkin Group created this fun, short video: Start Talking About Emotion.

The bottom line: Add the Five A’s of an Emotional Response to your vocabulary

Free eBook: 25 Tips For Tapping Into Customer Emotions

1609_ebook_25emotiontips_finalAs part of our CX Day celebration, we’re giving away this free eBook: 25 Tips For Tapping Into Customer Emotions.

Here’s the executive summary:

Emotions play an essential role in how people form judgments and make decisions. Consequently, a customer’s emotional response to an experience with a company has a significant impact on their loyalty to that company. To help you improve your customer experience, we’ve compiled a list of 25 examples from companies who are tapping into customer emotions, which you can emulate at your own organization.

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The eBook contains 25 tips across four areas: Experience Design, Organizational Personality, Organizational Empathy, and Customer Segmentation.

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The bottom line: Apply these lessons to tap into your customers’ emotions

Infusing Humanity Into CX, Discussion With Barry Schwartz

It’s CX Day in New Zealand, so that’s reason enough to kick off Temkin Group’s CX Day celebration. I can’t think of a better way to start CX Day in The Year of Emotion, then to share my Q&A with Barry Schwartz.

During this one hour video focused on Infusing Humanity into CX, we discuss some of Barry’s key findings about people and happiness, and explore what it means for customers, employees, and leaders. Sit back and enjoy the discussion, and then follow the links below for more information.

In case you don’t know Barry (and you should!), he’s the Emeritus professor of psychology at Swarthmore College, and has spent forty years thinking and writing about the interaction between economics and morality. 

This Q&A was a real pleasure for me, because Barry has heavily influenced my thinking over the years. He’s one of the key thought leaders of our time, and I believe that all CX professionals (and all leaders) can learn from him.

Here’s some of Barry’s work that we discuss:

Here’s some of our research that we discuss:

The bottom line: Thank you Barry Schwartz!

Report: Tech Vendor NPS Benchmark, 2016 (B2B)

1609_technpsbenchmark_coverWe just published a Temkin Group report, Tech Vendor NPS Benchmark, 2016, The research examines Net Promoter Scores and the link to loyalty for 62 tech vendors based on feedback from 800 IT decision makers in large North American organizations. We also compared overall results to our benchmarks from the previous four years. Here’s the executive summary:

For the fifth year in a row, we examined the link between Net Promoter Scores® (NPS®) and loyalty for technology vendors. We surveyed 800 IT decision-makers from large North American firms to learn about their relationships with their technology providers. Of the 62 tech vendors we evaluated, IBM, HPE outsourcing, IBM SPSS, and VMware earned the highest NPS, while Cognizant, Capgemini, and Infosys received the lowest. Overall, the average NPS for the tech vendor industry decreased by almost 2 percentage points from last year. Our analysis shows that promoters are much more likely than detractors to increase their spending with tech vendors, try new products and services when they are announced, and forgive tech vendors after a bad experience. We also found that Software AG and HPE outsourcing are the top companies for purchase momentum, while IBM SPSS, IBM software, and IBM outsourcing have the highest Temkin Innovation Equity Quotient, and HPE outsourcing and IBM SPSS are at the top of the Temkin Forgiveness Ratings.

The report includes graphics with data for NPS, purchase intentions, likelihood to forgive, and likelihood to try a new offering. The excel spreadsheet includes this data (in more detail) for the 62 companies as well as for other tech vendors with less than 40 pieces of feedback. It also includes the summary NPS scores from 2015.

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As you can see in the chart below, the NPS ranges from a high of 61 for IBM software down to  a low of -10 for Cognizant IT services.

1609_techvendornpsclear

The industry average NPS decreased to 29.9 this year. The research also includes data for Purchase Momentum (how much customers are planning to buy), Temkin Forgiveness Ratings (likelihood of customers to forgive after a bad experience), and Temkin Innovation Equity Quotient (likelihood of customer to try a new offering). We not only list the results for each company, but we also show that NPS is highly correlated to each of these items (as you can see below for Purchase Momentum).

1609_techvendornpstrendandcorrelatoin

Report details: When you purchase this research, you will receive a written report and an excel spreadsheet with more data. The report includes graphics with data for NPS, purchase momentum, Temkin Forgiveness Ratings, and Temkin Innovation Equity Quotient for the 62 tech vendors that had at least 40 pieces of feedback. The excel spreadsheet includes this data (in more detail) for the 62 companies as well as for other tech vendors with less than 40 pieces of feedback. It also includes the summary NPS scores from 2015. If you want to know more about the data file, download this SAMPLE SPREADSHEET without the data (.xls).

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Note: See our 2015 NPS benchmark2014 NPS benchmark2013 NPS benchmark and 2012 NPS benchmark for tech vendors as well as our page full of NPS resources.

P.S. Net Promoter Score, Net Promoter, and NPS are registered trademarks of Bain & Company, Satmetrix Systems, and Fred Reichheld.

My Latest 9 Recommendations For NPS

We study 100’s of companies that use Net Promoter® Score (NPS®) and work with dozens of others that are in different stages of NPS deployment. We also publish one of the most comprehensive annual NPS benchmark studies. This gives us a unique view on how organizations use this popular customer experience metric.

Every year or so, after being asked a series of similar questions about NPS, I write a blog post with a collection of my thoughts. Before I get to my current thinking (which has remained relatively consistent over the years), here are some previous posts you might be interested in reading:

As you probably know, there are people who love NPS and people who hate it. I am neither. I’ve seen NPS used as an effective metric to drive change, and I’ve seen it used in ways that are harming organizations. I could also say that about almost every metric that I’ve seen being used.

Having established all of that, here are nine of my current recommendations:

  1. The choice of metric is not as important as people think. We rarely see a company succeed or fail based on the specific metric that it choses. That doesn’t mean that you can chose a ridiculous metric, but most reasonable metrics provide the same potential for success (and failure). In general, NPS is a reasonable metric to chose, as our data shows that it often correlates to customer loyalty. As organizations mature, we try to get them to use metrics that are more closely aligned to their brand promises.
  2. Driving improvements is what’s critical. Instead of obsessing about the specific metric being used, companies need to obsess about the system they put in place to make changes based on what they learn from using the metric. Successful NPS programs systematically take action on insights they uncover. If the program is working well, then the company isn’t debating scores. Instead, they’re continuously making changes to create more promoters and eliminate detractors.
  3. Promoters & detractors need their individual attention. The most important thing you can do with NPS is to understanding what is driving NPS. It turns out that the things that create promoters are not just the opposite side of the issues that create detractors. So you need to separately identify changes to create promoters and decrease detractors. All too often, companies focus just on detractors. This helps to fix problems, but it does not identify opportunities to propel your organization. By focusing on what causes promoters, you will get the opportunity to engage the organization in uplifting discussions—instead of just beating the drum about what’s broken.
  4. Sampling patterns really, really matter. The approach for sampling often has a very significant impact on NPS results (and results from other metrics as well). If you have multiple segments of customers and they each have a different NPS profile (as many do), then your overall NPS can change wildly based on the mix of those customers that are included in the NPS calculation. In B2B, this may come from combining results from enterprise accounts with smaller clients, or mixing responses from executive decision makers and end users of your products. In B2C, the variance may come form mixing data between new customers and repeat customers.
  5. NPS is for relationships, not transactions. Asking people if they would recommend a company isn’t a good question to use after an interaction. If a customer is a detractor on an NPS survey deployed right after a call into the contact center, for instance, then it doesn’t necessarily mean that there was a problem with that interaction. The contact center might have done a great job on the call, but the customer may still dislike something else about the company. If the contact center interaction had been problematic, then the customer’s NPS score might be temporarily lowered and not reflective of the customer’s longer-term view of the company.
  6. NPS is for teams, not individuals. Since NPS asks about the likelihood to recommend a company, it actually reflects the actions of more than one person. So if you want to look for someone to hold responsible for NPS results, think about making it a shared metric across a large group, not an individual KPI. Many companies that fall in love with NPS, start applying it to every part of their business, trying to give everyone their own NPS. While it’s worthwhile to look for improvements across the business based on NPS, you run into problems when you try to create to many levels of NPS.
  7. Compensation can be a real problem. When an organization shares a common metric (like NPS) and its people collectively have some compensation tied to it, then it can help align everyone’s focus on customer experience. But if the compensation gets too significant, then people start focusing too much on the number—questioning its validity and strong-arming customers—instead of looking for ways to make improvements. Remember, the majority of your discussions should be about making improvements, not data.
  8. Target ranges make more sense than single numbers. NPS is an inherently jittery metric; there’s only a porous line keeping passives from becoming promoters or detractors. And the situation is magnified by the sampling issues described above. That’s why we see many customer insights group wasting a lot of time running around trying to explain small movements in their companies’ NPS, as executives overreact to small movements. Instead of setting NPS goals as a specific number, consider defining a range (similar to a process control chart). As a start, think about adopting a 3- to 5-point range. That way you only react to results outside of the range or multiple periods of increases or declines.
  9. There are four loops to close. When people talk about closed loop and NPS, they often mean contacting customers after they answer the NPS question. But that immediate response is just one what we call the four customer insight-driven action loops: Immediate response, corrective action, continuous improvement, and strategic change. Any NPS program should put in places processes to close all four loops.

The bottom line: NPS success comes from the process, not the metric.

Net Promoter Score, Net Promoter, and NPS are registered trademarks of Bain & Company, Satmetrix Systems, and Fred Reichheld.

Use Customer Insights To Close Four Loops

Companies that have voice of the customer (VoC) programs (including NPS) often put in place a closed-loop process. Those efforts often focus on closing a single loop, immediately responding to a customer after they respond to a survey. But this represents only one of four loops that companies need to close.

In the report, Make Your VoC Action-Oriented, we introduced the concept of four closed loops.

1608_FourActionLoopsHere’s an example of the four loops for a restaurant chain:

  • Immediate Response. Reach out to a restaurant customer who responded on a survey that the bathroom was dirty and help take care of her ongoing concerns.
  • Corrective Action. Get the manager or employee to clean the bathroom in that restaurant.
  • Continuous Improvement. Create new process for restaurants to check and clean bathrooms on a regular basis.
  • Strategic Change. As part of new restaurant formats, design bathrooms so that they don’t require as much time from employees to keep them clean.

The bottom line: Make sure to build out four closed loops.

Sydney Signage Considers Customer Journeys

I’m having a great time in Australia, enjoying the country while (hopefully) sharing some strong CX skills and knowledge during events in Sydney and Melbourne. One of the things that I noticed in Sydney were the road signs. Here’s an example.

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The signage answers the basic question (it’s Yurong Street), and additionally it answers other questions for people who may want to go to Woolloomoolloo, the airport or Bondi.

This is a great example of Customer Journey Thinking. Whoever put together these signs was thinking about what travelers are trying to accomplish, not just focusing on their immediate interaction of getting the name of a street.

Thanks to all of the wonderful people (and creatures) that we’ve had the opportunity to meet (and to introduce to the red iGuy from our logo)! Read more of this post

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