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Change management



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What will it take for your employees to start working on customer loyalty towards achieving that perfect 10?

Mirror mirror on the wall…

It is our experience that the challenge in working with customer loyalty is not just about getting individual employees to focus more on customer loyalty; the challenge is mostly with senior management. They are the ones who need to set an example. It takes courage to look at yourself in the “loyalty mirror” every day, constantly being measured to gauge whether it’s getting better or worse. The kind of proactivity required in order to focus on constant improvement is what separates mediocre senior management from the best – those who constantly move forwards and upwards.

This means that the company needs to reprioritise customer surveys, ensuring they are carried out consistently on a daily basis rather than just annually.

Perhaps this sounds expensive. Perhaps it is. But it would be far more expensive to not do it.

You must stop seeing dissatisfied customers as just a percentage/statistic. If a friend of yours approached you with a serious problem, would you ignore him/her or discard it at the bottom of a to-do list? No, you would deal with it immediately. This is how you need to start treating your customers. It is all about treating each other as fellow human beings. And from a business point of view, this approach really pays dividends.

You need to start contacting every single dissatisfied customer and turn them into a satisfied one, or perhaps even convert them into promoters. But this all starts with involving the entire organisation, from top to bottom, and everyone needs to feel that they are an integral part of the endeavour. When individuals feel a sense of ownership, their involvement and investment will be much greater.

Put customer loyalty on the agenda at management meetings. Not much will change if customer loyalty is delegated to a small group of enthusiasts – a small island in a big ocean of an organisation. A CEO needs to sit at the end of the table and the customer feedback needs to be read out aloud. Reading out comments from both dissatisfied and satisfied customers often has a greater impact and influence than simply looking at a statistic sent from head office once a month/every six months.

Based on the customer feedback, an action plan should be developed. This is one of the reasons a CEO needs to be at one end of the table, because then the process of change has real weight behind it. It will be so much more effective.

The action plan must be operational. If the goal, for example, is an NPS® of 80, what operational targets (such as allocation of time for correcting errors) should the company strive for? This is where the battle is fought to understand the connection between operational data and customer experience.

The action plan must be communicated to all relevant employees and a system must be established to ensure that feedback from dissatisfied customers is dealt with in real time. If the employee is confronted with problems as they occur, and is simultaneously reminded of what they are doing well and what they need to improve, then they have the opportunity to mend the fences and strengthen their strengths, to both the customers’ and the employees’ satisfaction.

As an executive, you should also have an overview of how each employee is performing. You can easily identify who isn’t doing well relative to the level of customer loyalty. As such, you will know how to allocate your resources. You can reward the high performers and guide the low performers towards improvement, with insights into exactly what is going wrong. The entire organisation and every individual employee is now united in moving the company closer to that score of 10.

In the case of a dissatisfied customer, the employee himself should receive the complaint so that he is able to take action proactively. The employee should also be able to see how customer loyalty develops over time, so that the improvements the employee is working on can be observed in the form of increased customer loyalty. And of course, as an executive or manager, you should identify when individuals make solid improvements so that you can give them the recognition that they deserve. This will become a positive feedback loop, which motivates them to continue to do even better.

It is here that we see the crucial significance of working with customer loyalty in a systematic way: the real value is the cultural change that gradually occurs, in which

every single employee starts to make individual improvements on a daily basis. Ultimately, it is not about the technique, but the habits – the good habits.

Depending on the organisation and how motivated they are to change, the processes can be implemented gradually, with a matching level of ambition.

Start by involving only those employees who have direct frontline customer contact. They might have the directive to always follow up on dissatisfied customers within forty-eight hours. Eventually this could be reduced to twenty-four hours. By comparison, successful companies such as Apple aim to answer dissatisfied customers within twenty-four hours – an aim they fulfil in ninety percent of cases.

Employee involvement

You can formulate an excellent job description, but if the incentive structure creates behaviour that results in a different outcome to what the job description intended, then that is what they’ll aim for. Perhaps there are some employees who are not particularly interested in going the extra mile for the customer because they will not be rewarded for it. They can hide away in the organisation – especially in the larger corporations. That is why there should be an emphasis on customer loyalty even during the recruitment process. Find employees who already have the correct mindset to make a difference.

Fascinating new research findings have shown what motivates employees – and it is no longer the salary that takes centre stage, despite the fact that many companies are still very old school in this area. Of course salaries should be paid, but beyond that it’s a bad incentive model. “Meaningfulness” is essential. This is why a focus on the customers and making a difference for them is a motivating goal for an employee. McKinsey uses, among others, Emerson Electric as a case study (US Fortune 500 company). Their CEO, David Farr, is known for asking all employees the following four questions:

But what do you do about the employees who already have some of that fat-cat-ism? How does the manager engage them? McKinsey has discovered what they call “The meaning quotient”. In the same sense that we have an IQ and EQ (emotional intelligence), we also have an MQ. We all know that a high IQ and EQ are necessary among employees to perform at a high level, but if there is a deficit MQ – not enough meaning behind what the employee is doing – then he will not perform to his full potential.

  1. How do you make a difference? (meaning)
  1. What are you currently working to actively improve? (constant improvement)
  1. When did you last receive coaching from your manager? (personal development)
  1. Who is our biggest competitor? (creates solidarity)

All four questions ensure that the employee feels meaning, makes constant improvement and feels commonality with his colleagues.

Find out what motivates your employees. But start by investigating how they are managing in relation to customer loyalty. Do not judge them by how nice they are as a colleague. Instead, allow your customers to be the judge. Those who do least well are also those who are least motivated – and you should focus your attention on them.

At this point, I would like to give you a little warning. Do you remember the example earlier in the book about the butcher who felt he was not affected by the greengrocer’s success and was therefore unwilling to help him? We need to develop a corporate culture that is fully focussed on our common humanity and going above and beyond the call of duty for both customers and colleagues.

For example, when a sales manager talks to his employees, he can have a more constructive dialogue because he can focus on the issues that matter and can identify where the necessity of both optimization and reward should be placed.

Sales employees often have their own agenda. Of first and foremost concern is covering your own backside. So if you suspect dissatisfaction among a certain salesman’s customers, it is important to back it up with solid facts and at the same time try to foster a corporate culture that promotes solidarity, within which everyone helps everyone else to make a difference.

Apple

Apple is among the best in the world when it comes to customer loyalty. Many believe that this loyalty stems primarily from the fantastic products or design, but it has been proven that the most important factor for their promoters is the way the employees in the Apple stores treat them. employees discuss customer feedback as a part of their daily routine. this kind of corporate culture has produced very significant results.

From an npS® score of 58 when they started measuring in 2007, it had risen all the way up to 72 in 2012.

Bolia.com

An example of a company that has implemented a system that produces natural employee participation is the furniture design group bolia.com. bolia.com has many stores in many countries and therefore has the need to benchmark performance and customer feedback between the international stores. bolia.com has therefore developed a real time customer feedback system that provides both an international view of performance for the entire group and within each store. Customers also have the opportunity to provide direct written feedback and ideas for the bolia concept, the collections and each store and sales representative. this encourages strong customer and employee incentive and participation to improve the stores and performance. At the top level, weekly follow-ups are made based on the results. negative feedback is quickly collected by a central team and the customer is contacted with the intention of converting them from a detractor to a promoter. At bolia.com all strategic business plans are developed with a focus squarely on the customer and this culture has produced sales records several years in a row.

What makes the difference?

Investment will need to be made financially, emotionally and time-wise for the NPS® programme to function optimally. It is necessary to reduce the distance to the customer to achieve change in the score and in customer experience.

Neil Berkett is the chief executive at Virgin Media. When they introduced their NPS® in 2006, there were a number of things that they immediately needed to improve. Neil said, “It really doesn’t help to force the programme down the throats of the employees. They all need to believe in the concept behind NPS®. It’s necessary to convince them – and this is a management responsibility – that this is something that can help the individual.

Where they are keen to make the change because they see it helping themselves, their colleagues and the entire company. It was the task of selling the NPS® programme to the frontline staff and really getting them to believe that this was something that they should believe in, that was difficult,” says Neil.

And the whole thing needs to be kept together by a professional team that can implement best practices, monitor the internal communication, create guidelines and say,

Virgin Media decided that the NPS® was the best way to create a cultural change in the frontline. They had just completed a merger with Telewest and NTL, and had therefore inherited a frontline delivery capacity that was below par. And with the new Virgin brand, they also needed to somehow change the experience that was being delivered to customers, through customer service, and through touchpoints (contact with customers) in the business. And NPS® was seen as a motivation to bring about this cultural change.

A template for success

Initially, it is essential that top management are brought into the programme. It is not something you just agree on and say, “Yes, okay, NPS® is the right step forward.” Management must be a part of the decision making process in relation to how one must act. Of course we’re not talking about the routine decisions that are taken every single day, but certainly the key structural improvements.

The results should be routed to the frontline. You need insight into the knowhow that is in the frontline because these are the employees who actually create the change. It is also important to produce proof as you move through the programme, in order to maintain acceptance by those who still doubt the value of NPS® – create the proof because there is no doubt that this proof is important in the company.

“Okay, guys. It’s a scale between 0 and 10. Promoters are 9s or 10s.” The team must ensure good management regarding what is right and wrong in relation to rolling out the programme.

But the programme also requires delegation, to establish exactly who is responsible for closing the loop on the customer. Make it clear. Have the process designed up front, before the surveys are sent. It is therefore important that the programme is centrally coordinated and that you have a core team who can relate to all the business functions and areas, because everyone has an interest in customer experience – not just the research department. This is relevant across the entire company.

If you want to go one step further, then integrate it with your CRM system. See customer feedback directly, together with all the other information about your customers. This will enable you to obtain the big picture about a single customer. It is great to get feedback and then say, “How can I help you with your problem?” But it is even better if you can see the information, together with which products they use, where they live, etc.

Zappos

The Ceo at Zappos says that what made the difference to his business was when they began to define the culture. they developed ten company values – not just a nice list to hang in a pretty picture frame, which employees would not have the motivation to comply with. they really delved into how to get employees to comply with the new corporate culture. the following is a good example:

Some employees of Zappos were visiting one of their partner companies. After the meeting they had a couple of beers, got slightly drunk and were on their way back to the hotel. One of the employees from the partner company had really been looking forward to a pizza back at the hotel, but when they returned they were told that it was too late. They no longer served pizza at that hour. the woman was really down about it. So one of the Zappos team said she should try and call Zappos, because they always offered fantastic customer service. It was said as a joke – they were, after all, slightly drunk – but the woman thought, “okay, if you offer such good service, then I’m going to call right now.” Zappos has 24/7 support, so she called them right then and there. “Hello, I would like to order a pizza.”There was silence and then the support rep told her diplomatically, “you do know that we sell shoes – right?” “Yes, I know that, but I was told that Zappos offer a fantastic service, so I would like a pizza. I’m down on venice beach, and it’s one o’clock in the morning.” Now there was even more silence at the other end of the line. “Give me a moment,” she was told. A couple of minutes passed and then she was told, “I’ve found three pizza restaurants in your area that are still open. The addresses are…” It would be impossible to define guidelines to anticipate what to do if customers call and ask for something out of the ordinary such as a pizza. You can only provide fantastic service if it is part of the culture. It all depends on making a strong corporate culture. Just like a society that has good culture, good values, ethics – a company needs these things too.

Summary

  • put customer loyalty on the agenda. Make it a daily habit.
  • Make a strategy for involving employees.
  • Start the process today and start small. Success often builds on a series of small improvements. you might start with customer feedback readings at your next management meeting.