How Likely Are You To Recommend Our Service..?

Fred Reichheld claimed in a 2003 Harvard Business Review article that the simple measure of consumer recommendations, called the Net Promoter Score is an accurate predictor of revenue growth. The subject is not without controversy and there are those that argue that the score is too simple, too narrow and no better than other measures of customer satisfaction.

We can leave the debate to the academics and experts but this writer’s opinion is that in the service business, there is a lot to be said for such simplicity.  As consumers, we are constantly being asked for our “valued” opinion and provided with a list of self-serving questions along with the chosen ranking methodology.  I say “self-serving” because the questions focus on what the company has determined represents the quality metrics in their business.  In the cases where I am moved to provide feedback due to poor or perhaps exceptionally good service, the values that concern me are not captured in these predetermined questions.  Judging from the lack of response, I am convinced that no one really reads the narrative in the comments box that is usually provided.  Certainly, no one seems to have the time to provide a personal response.

My conclusion is that survey experts prefer methodologies that reduce customer input into values related to specific quality metrics.  “On a scale of 1 to 10, how would you rate the skill and knowledge of our Moving Consultant?”…and so on. The theory seems to be that the average scores will reveal which quality metric requires attention in order to improve the quality experience for the customer.  My experience, from our industry, is that the surveys are collated by junior staff and the data input produces reports which are generally ignored.  In other words, we dutifully survey our customers but fail to genuinely listen to the comments provided.

“Just Say Yes” – A More Meaningful Approach to Customer Satisfaction

The Importance of Aligning Staff and Company Objectives

I believe that customer satisfaction in the service business is best achieved when the objectives of the staff providing the service are closely aligned with the objectives of the company.  Simplistically, the company wants to grow profitably and retain loyal customers by providing great customer service.  This is why the customer service provided by “Mom and Pop” shops or sole proprietorships usually provides a great customer experience.  There is direct alignment between the company objectives and the staff because the owners are the service delivery staff.

The first step to creating a more meaningful quality improvement system is creating this alignment.  The simple way to do this is to connect the staff incentive system to the quality system.  Ask your staff why they work at your company.  Many will answer by saying it is a great work environment.  They appreciate the opportunities to learn and improve their skills, etc.  Unless we happen to be independently wealthy, the primary reason most of us work is for the paycheck.  Of course, the other values are important in determining workplace satisfaction but let’s not be shy.  Our prime motivation is that we need the paycheck.

So, step one in designing our Customer Survey and Quality Improvement Program is to make the Quality Improvement Program and our Staff Incentive Program one and the same.

Keeping it Simple

Most variations of the Net Promoter Score use a numerical scale.  “On a scale of 1 to 10, how likely would you be to refer our company to your colleagues and friends?”  I prefer to make it even simpler.  “How likely would you be to refer our company to your colleagues and friends, Yes or No?”

I believe most customers make an overall determination of the customer experience based on the service provided.  Most customers are capable of understanding that service delivery is a human endeavor and even when service issues develop during the process, customers recognize when a company or an individual is doing the very best under the circumstances.  Therefore a binary determination of customer experience is not only valid, it is elegant in its simplicity.

In addition, one of the true values of such a simple survey system rests in the ability of the customer to provide their comments.  This means that rather than providing a numerical response to the self-serving survey question, the customer really gets to tell you what is on their mind.  Here is the interesting thing about keeping it simple.  Not only does a simple system increase the likelihood that the customer will actually respond, it encourages customer comment to reveal what is really on their mind.

Customers are smarter than we give them credit for.  They really do know what determines quality and a great customer experience and if you give them the opportunity, they will tell you in detail.

Survey Mechanism

Let’s continue to keep it simple.  Whether you use a computerized or manual operating system, set up a program to schedule an e-mail to the customer two days after the completion of every service transaction.  I suggest you avoid the temptation to send an automated e-mail.  Not only are these impersonal, spam filters usually trap them.

The e-mail should be sent by the service coordinator who “owns” the customer experience. Since our business stresses the importance of a single customer contact from beginning to end, it lends itself well to this idea.  In fact, as a service provider, this is our only unique differentiating factor – personalized customer care requires the involvement and engagement of a person.

While automated e-mails lack any personalization, the e-mail which accompanies the Just Say Yes is sent by the service coordinator so the personalization is and should be very genuine.

Imagine this:

“Good day Mrs. Jones.  I’m glad that we were able to complete the delivery in one day and I hope that your daughter, Sally, is happy to be settling in to her new home.  As I mentioned to you, our company is very focused on customer service so your comments regarding our service are very important to us.

We measure customer satisfaction with just one simple question, YES or NO.

Based on your experience, would you be willing to refer our service to your colleagues and friends?

To provide your response, just press Reply to this e-mail and we hope you will Just Say Yes.  If you would care to remark on any aspect of our service that we might improve please feel free to comment.  I can assure you that all the comments are reviewed by senior management and form an important part of our quality improvement program.

Thank you,”

The initial reaction from most companies to this suggested method relates to the additional work we are imposing on our staff and managers in sending the e-mails and in reviewing customer comments.  The questions usually relate to the possibility of automating the process.

My answer is if your personal service is the real differentiating factor that defines your service, we can use automation to make our processes more efficient and allow our staff to be more customer facing but we must not automate this intimate and important customer contact.  We must be sincere and we must be prepared to listen.

Listening to the Customer

It is my recommendation that each Just Say Yes customer response be reviewed by the most senior manager in the enterprise.  The immediate objection is that the CEO simply does not have the time to do that.  My answer is that there is no better use of the CEO’s time than to listen to the customer.

Imagine a company where the CEO responds personally (not an automated message) to each of the customers that took the time to make a comment.  In today’s age of faceless executives that are inaccessible, would your company stand out?  Imagine a company where the CEO walks among the staff and engages personally with them about customer comments.  Staff respond powerfully to what the leadership demonstrates is important to them.  Is there really a better or more important use of the CEO’s time?  Do you think this would affect the staff’s view of the importance to company of customer satisfaction?

Imagine a company where periodic management meetings had a priority agenda item devoted to customer comments regarding their service.  Imagine if the managers actually took those customer comments seriously and used them to improve their service.  Would that affect customer perception and loyalty?  Would that have an effect on staff focus on customer satisfaction?

What About the Incentive?

Let’s continue to keep it simple.  For every “Yes” received, a specific dollar amount is entered into a distribution pool.  At the end of the period (usually annually), the pool is either evenly distributed to every staff member in the enterprise or it forms the basis for performance-based multipliers.

Let’s look at an example.  Our company has 100 staff including managers.  It performs 5000 unique service transactions per year.  If we use $50 as the contribution for each “Yes” then:

• 5000 transactions – 50% return rate = 2500 returns
• 2500 returns  – 80% “Yes” rate = 2000 “Yes”
• 2000 X $50 = $100,000 (Program Cost under an even distribution)
• $100,000 divided by 100 staff = $1000 per staff member

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We can also use this method to determine the basis of a performance-based multiplier.  In such a system, Key Performance Indicators (KPI) objectives are agreed with each staff member at the beginning of the year.  For example, the KPI among the KPI objectives for one manager might be:

• Meet gross margin ratio objective of 30% – 50 points, add 5 points for each percentage in excess of 30%, deduct 10 points for each percentage below 30%
• Meet sales target of $2 million – 50 points, add 10 points for each $100,000 in excess of $2 million, deduct 10 points for each $100,000 below $2 million

If the company achieves $2.5 million in sales with a 28% gross margin.

• Margin Target – 50 – 20 = 30 points
• Revenue Target – 50 + 50 = 100 points

• Incentive – Base of $1000 X 130 points (130%) = $1300

Using these methods, the company has a great deal of flexibility in designing incentive systems focused on customer satisfaction.  It can also incorporate KPI targets specific to each staff and management function so that incentives are meaningful and have the right financial impact.  A company should never worry about paying out large incentives if the program is designed correctly.  A large payout means that the company will have performed exceptionally and both the company and its staff share the financial rewards.  Alignment.

Include All the Staff

It is important that all staff and managers are included in the program regardless of job or management function.  We are all in this together.  We are all relentlessly focused on customer satisfaction.

What does someone in the accounting department or a warehouse worker that is not customer facing have to do with customer satisfaction?  The answer should be obvious.  Each staff member regardless of function has an important role in directly affecting customer perception or supporting those that do.  More importantly, the program can bind the team together with a singular focus on the importance of customer satisfaction not only to the enterprise but also to themselves personally.

It is also important that all managers and executives regardless of role are seen to be part of the program.  Using the performance-based multipliers allows us to structure the program to account for management using incentives based on KPI targets.  Even sales commission can use the Just Say Yes based multiplier binding the sales team to the focus on customer satisfaction.  After all, it is the sales people that have an important hand in setting customer expectations.

Utilizing the Collected Information

Those companies using automated operating systems are able to collect the Just Say Yes data as part of each service transaction.  This will allow the analysis of the performance data by all the key data fields captured in the service transaction.  For example survey return ratios and “Yes” performance can be analyzed and compared by coordinator, branch, sales person, service partner, corporate client, etc.

The results of publishing such information on a current basis cannot be underestimated.  Beyond monetary incentives, most of us have competitive natures that are rewarded by positive recognition.

Just Say Yes performance data and comments can become a very important and positive element of period reviews conducted with corporate accounts.  I have personally been involved in corporate account reviews that were getting bogged down in hashing over one or two service failures and negative comments.  The mood perceptively changed when Just Say Yes data presented a more representative picture of the overall performance.  Presentation of selected transferee comments turned a potentially negative review into a very positive one.  Even the presentation of slightly negative customer comments was used as an opportunity to reflect on quality improvement initiatives which were a direct result of the program.

Managing the Program for Success

Even the best-designed programs can turn into a tired entitlement program if it is not managed properly.  Making the program come alive and utilizing it to bind all the staff within the company into a singular focus on customer satisfaction is the responsibility of leadership.   The senior management must keep an active focus on the program by publishing results on a current basis.

• A daily update of survey returns reported visually in prominent locations
• Periodic internal marketing campaigns focused on staff that have gone beyond the call to promote customer satisfaction
• Management reports on quality improvements based on customer comments
• External marketing opportunities with corporate clients, industry media

Expect a bit of skepticism at first.  We are all hesitant to accept change and most of us are cautious about being the first to jump on any bandwagon.  Expect some criticism of the program and the size of the first incentive checks presented.  Then watch the staff “do the math”.  When it comes to incentives, it does not take us long to figure out that with a little effort the survey return ratio could easily go up a few percentage points and that with some tweaking our “Yes” ratio could be improved.  It will not take long for us to convert that math into visualizing the size of the next incentive checks.

Conclusion

I hope the ideas presented in this article provide some food for thought.  Regardless of the debate on whether Net Promoter Scores are an accurate predictor of a company’s revenue growth; I believe it can be accepted that a positive focus on customer satisfaction can be an important foundational element of successful service companies.

Whether you choose to adopt such a program or utilize a few key concepts from the article, remember one of most important precepts of quality improvement – When it comes to listening to your customer – Just Say Yes!