In this video interview I will explain the most important things about a Customer Experience Programme.
What is Net Promoter Score®? Why is the annual customer survey dead? And learn about touch-points and closed loops.
I am here with Christian from Relationwise and Christian, and could you tell me a bit about yourself and your company?
I am from Copenhagen and I have been working with customer experience for quite a few years now and have even written two books on the subject. One is called “Recommended” and the other is called “Naked Marketing”. Furthermore, I am the Director of a tech company where we provide customer experience programs whereby companies can find out how many customer ambassadors they may or may not have. It is often the case that companies think they have many happy customers but when you then ask the customers they might have a different opinion about your company.
Yes, you are absolutely right. I don’t remember the numbers exactly but you have probably seen the study where customers are asked to what degree a company delivers what they promise and then the executives in the company are asked to what degree they believe that they deliver. The discrepancy is huge.
Yes, 80% of the CEOs believed that they deliver excellent customer service and when you ask the customers it was only 8%.
So what is the smart way for, let’s say a small or medium sized business to, on an ongoing basis, measure customer satisfaction or loyalty? How do you go about that?
It all starts by asking just one question. A lot of people are baffled that it is really just one question, but the thing is that companies have been asking too many questions for too many years. There was a guy called Fred Reichheld, who found out what the ideal question would be to ask our customers and it is the recommendation question. You just need to ask that question to your customers: How likely are you to recommend our company from 0-10? After that you can divide your customers into three categories: If they give you a rating of 9 or 10 they are your promoters who would be happy to recommend you. They are basically customers for life. If they rate you 7 or 8 they belong to the group of passively satisfied customers. My guess is that most companies have most of these passively satisfied customers. They aren’t dissatisfied but are impartial and will happily go to your competitor if they get the chance. The final group is the detractors. They give ratings between 0-6. The people in the detractor group who rate you between 0-4 they are ready to badmouth you and that’s not a good thing.
It is true then that any type of business can benefit from this? It’s not only the large companies? And is it both consumer facing and B2B?
Yes, absolutely, even the smallest businesses can benefit from this. They all have customers who are dissatisfied. The whole concept of creating customer ambassadors is for any company small or large. If you have only five customers whom you have a close relationship with it might not make sense, but if you have at least 100 then it might make sense to ask them this question in real time.
I suppose the value lies in the fact that it becomes actionable. You can react and respond to the critical group of customers who are not completely happy as well as those who are happy. Is that correct?
Well, the first thing you need to do if you have detractors is contact the dissatisfied customer and do something about it. You would be surprised how much picking up the phone or sending them an email will do and will turn them from being dissatisfied customers to at least passively satisfied ones. You also need to discuss with your front line team how you can improve the service and the customer experience slightly in order to turn the passively satisfied into customer ambassadors and customers for life.
It is interesting about this one ultimate question. I had a talk with Bob Hayes in Bogotá in Columbia where we were both speaking at a conference. Interestingly he doesn’t believe in the ultimate question as a valid way of measuring customer satisfaction or loyalty. When I think about what you are saying now and if you are a small or medium sized business you won’t have a big department who deals with these things. It seems like a really plausible way to get some sort of feeling about how your customers are doing and the fact that it is actionable. The fact that you can look specifically at one person and see if they are happy or not happy or in between and say; “Thank you” and “we would like to understand better why you are not currently happy” and then start working with them individually.
There are different opinions about just asking one question and there is no ideal answer to it. In a perfect world I would like to ask my customers 100 questions but what happens if you do that? Nothing! The response rate will be zero. Therefore, I would say that the best possible thing we can do is use the Net Promoter Score. At least I haven’t seen a better alternative to it. You can of course ask more questions, say once a year, but when you do it in real time I would only encourage you to ask one question.
To me it makes sense because at least it is something. Maybe it is not the perfect way but it gives you something to work with and you get feedback from your customer and are able to work with that feedback, which as you mentioned is also crucial. It is not just a matter of getting a report. It is a matter of getting the insight from individual customers and then following up on it.
The thing is companies spend a lot of time creating the survey, making it really nice and with a nice fancy PowerPoint presentation. That has taken up about 80% the time spent on this and very little has been spent on looking at the results. I think we actually need to flip it so that you spend minimal time on the survey. We can let the IT-systems and the technology sort that out. This means that we can spend all of our time on the customer feedback because that is the only thing that will actually increase the score. One thing is to measure the score, which is really simple but the tricky point is to increase the score and that is really where you have to focus.
I understand that you have been doing really well in your home market in Denmark but what about elsewhere? Are you doing business elsewhere?
We actually just set up some customers in Japan, in India, Australia and Canada so we are all over. We have an office in London and they speak English there so if you speak English you can work with us.