Allegiance Blog

There’s a lot of debate around Net Promoter Score® (NPS) as “the ultimate question.” In the meantime, companies continue reporting customer satisfaction scores with NPS and with aggregate averages. These discussions miss the mark. The point should be to drive improvement:  if you aren’t taking direct action on the results, then you are actually losing ground to your competitors. So what metrics can help drive that focus on improvement?

Start by telling the story. How would you tell an executive in 30 seconds or less what a “7.78 average satisfaction rating” means? On the other hand, executives should react if we tell them that only 38% of the company’s customers are Promoters, and that the differential annual value between a Promoter and a Detractor is $162 (as a real-world example of a B2C company we recently worked with). Armed with this knowledge and with understanding of what creates Promoters and Detractors, executives can make good decisions and also gain a leading indicator of progress by watching the % of promoters grow in their segment.

The background research for Net Promoter was based on a series of longitudinal studies that examined actual customer behaviors associated with their feedback (documented in Reichheld’s book, The Ultimate Question, and in dozens of case studies over the years). The beauty of Net Promoter isn’t in the score – its strength lies in its ability to easily communicate action plans based on a proven segmentation strategy. It turns out that customers who rate you as less than 9 (on a 0 to 10 scale) are actually not with you (i.e. they aren’t “Promoters”), and they are prone to go elsewhere with their money. Prior to the research in Fred’s book, conventional wisdom found that a score of 5 on an overall satisfaction or recommend question was “neutral” and therefore “ok” and so an average score of 7.78 was generally perceived as good.

However, we all know that a focus on a score, including NPS, is missing the point. A single metric always focuses the discussion on scores, while a focus on improvement and the resulting financial metrics would better serve the business. Reporting averages makes action even more difficult. Take the first step by simply reporting “top box” scoring (% of customers that score a 9 or 10) and see what dialogs result. What percent of your customers are really with you?

Steve is a founder and Principal Consultant with Waypoint Group.  Contact Steve at steveb@waypointgroup.ORG

My wife and I celebrated our wedding anniversary by going to our favorite restaurant. Usually, we have a great experience, but this time everything went wrong. The server was inattentive, the food was cold, the drink glasses went empty, etc. When we returned home, my wife and I were faced with a dilemma: What do you do when you have a bad service experience with a company you love? 

As a subscriber to this restaurant’s Facebook updates, I logged on and thrust my opinion into cyberspace. My wall post clearly illustrated my disappointment. As a loyal, engaged customer, I felt I owed it to the restaurant to provide feedback about my experience. Besides, any responsible business would want to know about the experience of a loyal customer, right?

It has been weeks, and I have heard nothing in response to my feedback.

There is a lesson in this for all businesses. Social media has become the no. 1 online activity, so it’s essential for businesses to pay attention. When a small percentage of customers share their experiences with your company via social media, you have an opportunity to engage or re-engage these customers. To use social media to your advantage, consider the following:

Get involved.  Businesses should be actively monitoring what is being said about their brand on social media sites and across cyberspace. Seek out not only feedback posted directly on your Facebook page or directed at you on Twitter, but research your brand. Find out where your customers are talking and become part of that community. Take the opportunity to engage customers who mention your brand and learn from them. 

Ask for more.  As it becomes more difficult to solicit feedback from customers through common survey methods, follow your customers online and connect with those who are already talking about you. With technology such as Allegiance SocialVoice, you can turn unstructured social media comments into structured data by reaching out to customers with a survey to ask specific questions about their experience or brand perceptions. You’ll find that many of these customers will appreciate your effort to engage them and learn more.

Actively manage feedback.  It’s okay to be reactive to specific social media mentions about your brand. Many times you’ll be able to identify “quick wins” where intervention is warranted to resolve an issue and save a defecting customer. However, it’s also important to allow social media data to paint a bigger picture. With Allegiance SocialVoice, you can pull social media feedback into a single platform and include it in analysis with other data collected across your organization. Here you can report on what type of feedback has come via social media alongside data collected with surveys and other tools. This gives you added insight.

If you’re only using social media sites to promote your brand and obtain additional customers, you’re missing out on a huge opportunity. As customers see your willingness to consider their opinions posted online, loyalty will surely increase. Those companies who act on the wealth of information customers share on social media sites will surely gain an advantage.

I’m a little late working on this blog post because of a family emergency, but it seems fitting that I write it this morning – and on this very topic – as I fly from Long Beach to Salt Lake City, using both this airport and JetBlue for the first time. After driving 40 miles to the airport, I’m hoping for a smooth experience as I make my way through these “firsts.”

As JetBlue is well known for its brand promise of bringing humanity to air travel, I am looking forward to the “JetBlue experience,” to find out what it’s all about. The company touts more legroom, free DIRECTV and XM Satellite Radio, and free-flowing snacks at no charge. (What? No WiFi?) It also has a Customer Bill of Rights, should we be delayed and stuck on the tarmac for some reason. (I hope we don’t have to experience that portion of the promise.)

So what’s all the hubbub about a brand promise? A brand promise is the expectations you set with your customers.  It’s a combination of the brand purpose and the reality of what the brand can deliver. It defines the benefits a customer can expect to receive when experiencing your brand – at every touchpoint. It must be delivered consistently at every touchpoint so as to create predictability. Customers will select your brand because they know that, every time they choose your brand, they will have the same experience. This doesn’t happen on the first interaction – it takes many interactions for customers to begin to trust your brand.

And that introduces another concept related to the brand promise – trust.  The brand promise sets expectations, and expectations are aligned with trust. Predictability begets trust, and trust begets loyalty. Over time, I expect that I will trust JetBlue to deliver the same excellent experience every time.

Expectations are an integral part of your customers’ satisfaction levels. As a matter of fact:

Expectations – Performance = Satisfaction

Let’s think about that for a second. Customers try your brand with a set of expectations (your brand promise) in mind. How you perform against those expectations leads to some level of satisfaction. If performance meets or exceeds expectations, then customers have a higher level of satisfaction and/or loyalty. If performance is less than expectations, then the brand promise has been broken – no explanation needed on what that means for your company. One sidebar to note here: consumers have higher expectations of iconic brands.

A critical and required component of delivering on the brand promise consistently is to socialize it with your employees. We have all heard that engaged employees drive engaged customers.  In order for employees to hold up their end of that deal, they must first know and understand the brand promise. It needs to be communicated to employees (starting with the employee onboarding or orientation program), and it must be reinforced regularly.

JetBlue’s brand promise is to bring humanity to air travel.  I read that the company defines humanity as friendliness, flexibility, and caring.  JetBlue’s founder and former CEO David Neeleman was quoted as saying, “The JetBlue brand promise dictates how employees execute at the various stages of the customer experience, from the time customers check-in at the gate to the time they land and claim their luggage. And consistency in the experience is key, or else the brand suffers.”

Has JetBlue lived up to its brand promise for me? Well, as I said earlier, it takes time and several interactions before you feel that brand predictability. It’s too early to tell. The flight attendants are friendly, but their service hasn’t really been unique relative to other airlines I’ve flown recently (including Southwest, Continental, Delta, and American). As I write this, about half way into the flight, the DIRECTV system is still not working…stay tuned!

My last business trip resulted in no less than four feedback opportunities: the airline, the hotel, the rental car company and the travel agency.  Each of these organizations sought my feedback to help improve my customer experience.  Marvelous!

It seems every time I buy a product or service, the provider offers the opportunity to give them some feedback through a customer survey. Although the feedback opportunities are wonderful, my service providers are mired in the details of asking about the logistics of their service. Executing flawlessly merely provides them feedback that they delivered what I expected. This is useful information, yet often empty. In fact, we call these feedback surveys “happy charts,” meaning that an extremely high percentage, as high as 90%, of customers, are “happy” with the experience they just had unless a significant service failure occurred or an expectation went unmet.

In the early stages of truly understanding what drives loyalty and advocacy, many of my clients focus on the details of executing a process without failure. Basic service/product quality is really the metric being captured. Yet meeting basic quality expectations isn’t enough today to enchant customers.

Voice of the Customer programs fall behind by focusing primarily on the quality of an experience. Knowing if a customer was greeted properly, if reservations were in order, and if the rental car had fuel are measures of basic service quality, core expectations of value for money. Today’s leaders take the next step and tease out what drives customers to extol the virtues of the experience.

Last year a colleague stayed at a hotel that was very close to the airport and provided a pickup service. He arrived and contacted the hotel for pickup, but they never arrived. Being tired and hungry, he jumped in a taxi. While he was checking into the hotel, the desk clerk asked if he was the gentleman that had requested pick-up. Finding out that he was, the clerk reimbursed his taxi fare. Wow! More than six months later, he still talks about how delighted he was with the hotel and recommends it constantly.

Does your organization know what customers love about you?

The whole love thing sounds a little squishy doesn’t it? That’s the challenge. Gaining the emotional connection with customers is truly the goal of any business. Emotional connection drives loyalty and advocacy. The Walt Disney Company knows what guests love about their experience; Apple knows what users love about their products. Do you?

The next time you review customer feedback results, see if you have the answer to these questions:

1. What did your customers love about their experience with you today?
2. Is there anything that they’ll tell their friends not to miss about their experience with you?
3. If customers could change one single thing about their experience, what would that be?

Look beyond the basic quality of the process to discover the heart of the experience. This will help you build an experience that truly enchants your customers.

A new research report from industry analyst firm Aberdeen Group called “Customer Experience Management: Engaging Loyal Customers to Evangelize Your Brand” reveals how organizations that achieve superior performance in customer retention and customer satisfaction grow and harvest customer advocates.

Some of the most compelling survey findings include:

- 70% of firms that enjoyed Best-in-Class performance periodically used customer feedback to influence strategic decisions (versus 29% of Laggards). [By comparison, the report notes that even though "70% of Industry Average organizations indicated they collected customer feedback...only half of these organizations actually used feedback to influence strategic decisions."]

- 96% of respondents saw value in formalizing a strategy to encourage or incent loyal customers to promote the brand, product or service.

- 37% of respondents currently have a formal program in place to systematically identify and encourage loyal customers to become advocates for the brand, product, or service.

- Over the next 12 months, more than three-quarters of all organizations will either have in place, or be in the process of pursuing, a formalized program to promote customer advocacy.

The report also cites a  March 2009 Aberdeen study titled “The ROI on Customer Feedback: Why It Pays to Listen to the Voice of the Customer” which found that the number one pressure driving investments in customer feedback initiatives is to increase customer retention and customer loyalty.

Since every interaction that a business has with a customer is an opportunity to positively influence the customer experience as well as grow customer retention, customer loyalty and customer advocacy, it makes sense that customer feedback has become a critical component in these initiatives.

Kimberly Mathie, MarComm Manager, Allegiance

Trust is at the core of every relationship. In the aftermath of the economic crisis, our common challenge in bringing business relationships out of the proverbial tank and back into the light is renewing a level of trust with our customers, employees, and shareholders.

So how does a company do that? At the core, it’s about making offers that build trust–offers of stress-free service that really is stress free. Offers of discounts that are actually discounts. Offers of personal growth to employees that are made good. Each time we in the business world “make good” on a promise, trust is enhanced and deeper bonding occurs.

Here are three additional steps that organizations can take to enhance trust:

1. Offer customers/employees something unexpected
2. Deliver on the offer quickly without conditions (a.k.a. fine print)
3. Repeat as often as you can

Case in point – A few years ago, Bell South implemented a “just ask” program requiring every customer-facing employee to ask customers a simple question at the conclusion of every interaction: “Is there anything else I can do for you?”

The result was a rise in overall customer satisfaction and customer loyalty because a little offer goes a long way and sales increased based on that little question, adding $100M in the first year. Additionally, reward points were given to service people to be used ot choose from a catalog of goods enhancing the quality of work because they had to qualify for the opportunity and follow up with the sale.

Bob Caruso, Managing Director, Endeavor Management

Everyone who’s been watching TV or reading the news lately knows that banks have certainly had their fair share of challenges lately. But what’s been interesting to watch is how those challenges and the fall out from big bank failures and the economic crisis have impacted bank and credit union customer loyalty and engagement levels.

In a new report called the “National Benchmarking/Pulse of America report for Banks and Credit Unions” which was put together by Allegiance, 600 consumers per quarter were asked questions about their “primary” bank or credit union (i.e. the financial institution that they use for everyday purchases) between January-June 2009 (about 1200 responses). What we found was: 

1. Customer/member expectations of banks and credit unions have shifted away from the more traditional roles of industry leader, guardian and protector of customer/member finances. As a result, two items increased in their impact on customer/member engagement: 1) The perception that doing business with one’s bank or credit union saves customers/members time and money, and 2) Feeling trust in the financial advice customers/members get from their bank and credit union.
2. Credit unions continue to have much higher member/customer engagement levels than banks, but the gap is narrowing. Customers’ engagement with their banks stayed about the same with roughly 30% engaged customers from Q1 to Q2. Although credit unions continue to have much higher member/customer engagement than banks, credit unions saw a significant drop in customer engagement from 57% to 49% between January and June 2009. [The 8% drop in credit union engagement is the sharpest drop Allegiance has seen in credit union member engagement since the Allegiance National Benchmarking/Pulse of America survey began in October 2007.] In addition, the percentage of disengaged credit union members rose from 4% to 8%, most likely due to credit unions being forced to raise rates on credit cards and/or introduce variable rates.
3. Engagement levels among older customers have fallen. Engagement stayed roughly the same (rose on average by 5%) for banking and credit union customers/members age 54 and younger. However, customers 55 and older saw a 10% drop on average in engagement. (i.e. The push to engage younger customers through social networking may be leaving older customers/members disengaged. Therefore, banks and credit unions should not and need not abandon the practices that have grown their base of loyal, older customers.)
4. Both banks and credit unions appear to be focusing their customer/member engagement resources on the most profitable demographics. While engagement fell by 8% for customers with incomes of $50,000 or less, engagement rose by 3% for customers with incomes of $50,000-$150,000.
5. Banks and credit unions that had a multi-state and/or international presence experienced a huge 12% drop in customer/member engagement between Q2 2008 and Q2 2009, whereas banks and credit unions that only operated on a local or statewide level saw little change in their customer/member engagement levels during that same period.

To read about these and other findings, download the report  at: http://www.allegiance.com/resources/papers/poa-aug09-report.php

Kimberly Mathie, MarComm Manager, Allegiance