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NPS: the next step in CX

Across almost every industry - especially those being disrupted by technology or tackled by non-traditional competitors - a common theme is a renewed focus on customers.

This shouldn’t be radical – after all companies have long said they are customer focussed. What has changed is we have seen what happens when truly customer-focussed organisations, often not carrying a history, enter the market with new service and products.

That’s when customer feedback really comes to the fore and that’s when we need to have some science and rigour about genuinely understanding customer experiences and how we can improve them

At ANZ, we have chosen to do this by using the Net Promoter System (NPS).  NPS is not just a score – it’s a system which allows us to listen, learn and act on customer feedback.

" Across almost every industry today the common theme is a renewed focus on customers.” - Peter Dalton

It’s not a new system and indeed many companies around the world have been using it for some time. But it is a complete system and – critically – one which can be tailored and enhanced for individual companies.

Crowdsourcing

In essence, after an interaction with a company, customers are asked to rank how likely they are to recommend your services to a friend or family member. Based on this your company or brand receives a score. Customers are also asked to explain the score they provided.

It’s kind of like crowdsourcing but, instead of ideas, you’re after feedback and a deeper understanding of your customer experience.

Where NPS is used, the score is often the focus. Maybe a chart mapping how the organisation stacks up against competitors. So there’s often a temptation to try and ‘outscore’ your neighbours across the road.

The more critical point though is how NPS can help capture the right data - and make a difference that’s actually meaningful to customers.

I spoke to Katrina Bradley from Bain & Company (the brains behind NPS) about how it can help radically improve customer experiences and here are five things to help you understand how it can help.

• Calculating your score is important but it’s only one aspect of a NPS

The first step in driving improved customer experiences is to be able to benchmark where you are.  The net promoter score is a measure of customer advocacy for your company.

Customers are asked to rank on a zero to 10 scale “How likely are you to recommend brand X to a friend or family member?”

To calculate the net promoter score, we subtract the percentage of detractors (those who gave you a zero to six) from the percentage of promoters (those who gave you a nine or a 10). 

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Bradley says once you understand where you stand with your customers overall, the goal is to find out what they need from you the most to make their experience better and thus, improve your net promoter score.

“It’s also crucial that you ask your customers what the main reasons are for giving you their particular score”, she says.

• NPS tells you if your customers love you, hate you, or are indifferent

Measuring your net promoter score will also tell you how many of your customers are detractors, promoters or passives. 

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Customers who give a score of 9 or 10 are ‘promoters’. An example of a promoter is someone who tries Uber Eats then calls a friend and says “Hey, you should really try Uber Eats”. They are more likely to stay with you longer and promote your brand to their friends and family.

A 7 or 8 marks a ‘passive’. A passive customer is someone who might come back and try your product or service again but is less likely to hang around for long - and less likely to recommend your brand to others.

Customers who give a score of 0 to 6 are ‘detractors’. You don’t want too many of these. A detractor is someone who is much less likely to try your product or service again and also more likely to call a friend and say something like “avoid this company like the plague”.

• To be effective NPS must be part of your daily operations

With her experience working across many companies, Bradley says NPS becomes a vehicle to drive radical change in customer experience when it is embedded into daily operations.

“When set up correctly, NPS can give you rich insights about what’s most important to your customers and what’s getting in the way of a great experience,” she says. “Then it’s about how you set yourself up to learn and act on that.”

“Feedback should be flowing in from customers through formal surveys as well as the conversations your frontline are having with customers, this should then be prioritised and acted on by the appropriate team.”

“An effective net promoter system will see you focusing your resources on the things that truly matter to your customers and will deliver the greatest value.”

One way to do this is by establishing ‘learning loops’.

• Learning loops: A system to find out what your customers really want

This is so important. It sounds like a no brainer but trying to understand what your customers think and want without a system in place to listen, learn and act, is like assembling an IKEA flat pack without the instructions – you’re just guessing.

Luckily, there’s a really useful tool to identify and resolve the things that are most important to customers: learning loops – a crucial part of NPS.

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Bradley explains there are two learning loops, an inner and an outer loop. The inner loop allows frontline staff to drive service improvements within their teams, with a focus on the actions they can own and resolve.

“This could be done through regular team huddles and coaching sessions during which frontline team listen to and learn from customer feedback, and take action to resolve pain points,” she says.

“The outer loop is where the bigger issues are resolved. Things like technology, policy, product design, or process issues are escalated to outer loop teams who can fix them across the organisation.

“Feedback flows into the outer loop from the frontline teams as well as from customer surveys used to measure the net promoter score.

“In the outer loop, cross functional teams analyse the customer feedback, prioritise actions and fixes that will have the most impact, and then get it done.”

• Leadership and culture

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Once you’ve got the tools and the know-how, the million dollar question is how do you make it stick?

Once you’ve established a reliable metric (like your net promoter score) as your organisational source of truth, established the mechanisms for listening, learning and acting on customer feedback, it all comes down to leadership.

Bradley says sustained leadership commitment along with a shared understanding right across your organisation is an important step to improving customer experiences

“NPS should not be a set and forget,” she says. “To drive sustainable improvement in NPS requires continuing focus and unwavering commitment over a multi-year period. The goal should be to embed net promoter learning loops in a company’s operating rhythm.”

A critical factor, according to Bradley, is providing employees in the frontline and in supporting functions with regular fast feedback from customers, and then giving them the latitude and empowerment to make improvements.

“Companies who do this well will improve customer loyalty over the time and will build a culture of customer centricity” she said.

Following a successful three month pilot, ANZ has begun progressively rolling out Net Promoter System and this will continue into 2018.

Peter Dalton is Managing Director, Customer Experience and Digital Channels at ANZ

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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