loyalty.jpg

The Ultimate Question 2.0 and the Net Promoter Score

Danny Ryan:Hello and welcome to the ThreeWill podcast. This is your host Danny Ryan and I’m here with Tommy Ryan. How’s it going Tommy?

 

Tommy Ryan:It’s going well Danny.

 

Danny Ryan:Good. Today we have a book that we’re going to go through. A book that I read through recently. Actually read through a couple of times. It is called The Ultimate Question 2.0 and it is about Net Promoter Score. You’ve run into Net Promoter Score a couple of times with our clients, is that right?

 

Tommy Ryan:Have yeah, definitely in the customer experience or customer service departments. They really care about that NPS score.

 

Danny Ryan:Cool and we have up on our … for many years as the Microsoft partner they would as part of becoming a partner and getting a certification around being a partner or certain level of a partner, they would have you take a TNS Global, which is some organization and actually go through and interview or have your customers take a survey about you. One of the things I brag about because I’m often bragging about us, but the last four times we took it, they would tell you what percentage of the Microsoft partners you were the top part of and we were the top 5% the last four times we took it. Good job to you in delivery and for doing great work on projects.

 

Tommy Ryan:Yeah, it feels crazy to be in the top 5%.

 

Danny Ryan:We’ll take it. So what happened is, the reason why I mention that is, that’s gone away and so I wanted to find some way of capturing how are we doing on projects. I ran into this by hearing about it sort of as a third party from projects and then seeing that it was something that we were starting to do for some of our clients. I picked up the book. I was at the library and I saw the book and I picked it up and I read through it the first time and I liked it so-

 

Tommy Ryan:There are still libraries?

 

Danny Ryan:There are still libraries, yes there are. They’re great places, Tommy, you might want to check one out sometime.

 

Tommy Ryan:My library’s audible.

 

Danny Ryan:I picked it up, read it through, liked it so much that I ended up ordering the book off of Amazon and having it delivered and then I marked it all up. I wanted to go through the book with you. For folks who are listening or haven’t gone through the book, this probably will serve as a little bit of a summary of what’s covered in the book. This is done by-

 

Tommy Ryan:Cliff Notes, what I liked in college.

 

Danny Ryan:Yes, you’re very familiar with Cliff Notes aren’t you? It’s done by a couple of folks from Bain Consulting, so this is, I’m not even going to try to pronounce his last names because I’m not going to. But I wanted to get us started with sort of what is a definition of what NPS is. I’ll just use NPS as an abbreviation for Net Promoter Score. The key question for this is on a zero to ten scale, how likely is it that you would recommend us or this product, service, brand to a friend or colleague? That’s the net promoter, sort of the question. That’s the ultimate question that we’re asking people.

 

The after that, you can do a follow-up question to this as well, which is what’s the primary reason for your score? So that tells you a little bit about why did they give 10, why did they give you eight, why did they give you a five. You’re trying to understand the main reason behind that. Then what you get are promoters. Promoters are people who respond either a nine or a ten and those are typically people whose lives have been enriched by the relationship with the company, so they’re loyal customers.

 

Then you have a seven or an eight, is what’s considered a passive and then you have detractors, which is anything lower than that, so a six or below. What you end up doing is taking from this and you can calculate your Net Promoter score, which is the percentage of promoters minus the percentage of detractors. So you could have the case of having a couple of folks who are passives and that would lower your score because obviously the percentage of promoters would go down at that point in time. In general, anybody that has a positive net promoter score is a good score. They have some well known published scores that are out there for published industries.

 

I looked through, there was a forum that was created for net promoter score called NPS loyalty forum, it’s good to see a lot of our clients are in this forum, but as a group of companies that were using this basically giving some feedback and input into net promoter score. One of the things that I liked about this is, is in the introduction, the how likely question is merely, and I’m quoting, this is a quote from page 14 of the book, “the how likely question is merely a practical shorthand for the question of whether you are observing the golden rule, and that’s treating others like you would like to be treated.” I thought that was a very insightful thing.

 

If I jump into that so, I just hit the introduction, one of the things that they get started with is bad profits, good profits, and the ultimate question. They start it out with “we live and work in a web savvy world in which customers have near perfect information. Only companies that put customer at the very center of their operations can successfully compete in such a world. Many companies also want to make themselves more mission driven than profit driven.” That’s part of, I think for you and I, last couple of weeks talking about our values and what those values are is more driven around the mission of what we’re doing, than just the profits.

 

Tommy Ryan:Definitely. Definitely.

 

Danny Ryan:The concept of what they call bad profit, so you probably have experienced this before, which is there is a bad type of growth. If you could imagine let’s say for instance, I’ve experienced this in the past where I have an overage on my data for, I remember I bought a card for my laptop and in one night it did a backup of all my stuff and I ended up the next day, getting an email the morning after and logging in and noticing that I had, it was like over $3000 in overage charges.

 

Tommy Ryan:Oops.

 

Danny Ryan:Now the company will make a profit off of that.

 

Tommy Ryan:How did that work in your expense sheet? Did anyone notice that?

 

Danny Ryan:Yeah did anyone notice that. I think Linda would notice that, yes. There is some mad negotiation skills we ended up working that down but I think they realized that this was a … well one of the things that’s interesting from this is that I did have … I recently from my home internet had a similar situation and I noticed I was going to get dinged again and midway through this, they changed their policy on it and they gave you three months of, basically three months of mulligans. Which, I think they did this-

 

Tommy Ryan:Right. That’s Comcast?

 

Danny Ryan:-yeah this is Comcast. They ended up doing this because I think they probably got feedback on the net promoter score saying like I wouldn’t recommend you guys because I got overage charges when I started using your service so I have a feeling that, that was a part of the feedback cycle that they were getting from customers. Which, was really neat to see them do that. “Whenever a customer feels misled, mistreated, ignored, or coerced, profits from that customer are bad.” Okay.

 

We don’t want bad profits, right, because those folks could easily … they’re looking for an alternative at that point.

 

Tommy Ryan:Yeah, that’s not how you build loyal customers, for sure.

 

Danny Ryan:Yes, absolutely.

 

Tommy Ryan:No one likes to feel tricked into a service. They want to feel good at the end of the day that it’s been something they want to buy again.

 

Danny Ryan:Interesting to see, they cover a couple of companies that, some pretty well-known companies in this case. For instance, Vanguard, this is a quote, “Not long ago vanguard reduced prices by as much as one-third for customers who had recently made large investments or had maintained healthy balances for an extended period of time.” So they’re really trying to take care of those folks who are their core business and basically there are a lot of benefits that they ended up seeing coming from this.

 

Another one that in the pursuit of good profits, “Amazon could easily afford to advertise more than it does. Instead, it channels its investments into free shipping, lower prices and service enhancements. Founder and CEO Jeff Bezos has said if you do build a great experience, customers tell each other about that. Costco, the leader in customer loyalty among warehouse retailers rocketed up from startup to the fortune 50 in less than 20 years while spending next to nothing on advertising and marketing.” Don’t get any ideas, Tommy.

 

“Its customers are so loyal that the company can rely on customer word of mouth for growth.” How many people do you talk about like your experience at Costco, some of the bargains that you got. I typically, you’re hearing from other people about …

 

Tommy Ryan:That’s right.

 

Danny Ryan:You hear from other people about the return policy. You’re like Costco will take anything back and that leads to these conversations with other folks.

 

Tommy Ryan:Frank Ryan uses that all the time.

 

Danny Ryan:Shout out to Frank. Let’s see, yes. So Isadore Sharp, founder and chairman of the Four Seasons hotel group, “Our success all boils down to following the golden rule. Golden rule behavior is the basis for loyalty and loyalty is the key for profitable growth.” I had sort of mixed two quotes there, but I thought that was interesting. The second was from Enterprise, another company that really focuses in on net promoter score. Good stuff.

 

“What is the question that can tell good profits from bad? Simplicity itself, how likely is that you would recommend this company or this product, or this friend to a colleague. The metric that produces this is the net promoter score.” Cool. So jumping further into this, “Reflecting on our findings, we realize that they made perfect sense. Loyalty after all, is a strong and value-laden concept. Usually applied to family, friends, and country. People may be loyal to a company that they buy from, but they may not describe what they feel in those terms. If they really love doing business with a particular provider of goods and services, however, what’s the most natural thing for them to do? Of course, recommend that company to someone they care about.”

 

So again, this is … you’ve taken then … what’s nice about this is taking the really long surveys that we’ve typically had and just narrowing it down to … on our customer satisfaction, it’s really narrowed down to three questions and having really short format for this is a nice thing. You’re really trying to figure out what is that key question we should ask. Cool.

 

Tommy Ryan:Yeah and I noticed that on GoToMeeting, at the end of some of your meetings they’d pop that up and you’d say ooh, that’s the net promoter score right there, in action.

 

Danny Ryan:“NPS merely measures the quality of a company’s relationship with its current customers and high-quality relationships are necessary, but not a sufficient condition for profitable growth.” So here they describe some things that you also need to pay attention to maintaining a profitable business. They’re saying how important that is. One of the other things, I’m sort of jumping off of that I got out of this book, is this gives something just do everybody can measure their financials and that’s a very … you have hard numbers there and for this, they’re saying to monitor this just like you might monitor your financials. You want to know what your NPS score is because it’s really telling you how are you doing as a company.

 

Chapter five, the Rules of measurements. They notice, they point that most surveys are too long. “They create unnecessary complexity and waste customers’ time. They are design to generate research reports, not daily front line learning and behaviors. They are often anonymous, which eliminates the possibility of closing the loop with individual customers. They are constructed in a language the researcher not the customer. Response rates are typically low so the results are often unreliable.”

 

I think that was one of the things that as we’re doing this, it’s not like we’re having customer interactions, like thousands each day, we’re typically wrapping up projects and have two or three sponsors on those projects. So principle one with the rules of measurement, “Ask the ultimate question and very little else. Choose a scale that works and stick to it.” We’re doing a zero to ten scale. It’s interesting that they have the zero in there because everybody knows you have the concept of one, which is first place, and that can sometimes throw people off but if you have a zero in there, they realize that’s the lowest. So that helps understand, break up some confusion about that.

 

Tommy Ryan:That’s good idea.

 

Danny Ryan:“Aim for a high response.” What was interesting is they go into some of the rules of measurement and actually saying sometimes the people who wouldn’t give you the tens will not respond back to the survey. So your real net promoter score is typically lower than what you get back because they’re not thrilled with your service so you can factor that in as you look at your NPS. So you’re going around bragging about it, but most likely people who don’t have good things to say about you won’t even take the time to do the survey.

 

They give some …

 

Tommy Ryan:What about being anonymous or not? What’s the rule of thumb there?

 

Danny Ryan:They issue I mentioned earlier where you can do, they suggest doing closed feedback loops on this and that’s one of the things there’s no way for you to do a closed feedback loop unless you have the contact information for that person. You have to do that in order to be able to have that processed for follow-up.

 

Tommy Ryan:Okay.

 

Danny Ryan:A lot of these, like if you … one case they talked about, like the Apple store, if you go in there and after you’re done you rate them, you’ll get follow-up from the store manager about your experience if you put in a negative experience. There’s no way they could do that unless, well Apple does it because they track everything on you with … you need to have some way of following up and closing the loop. That’s why I don’t even have an option for ours on our website to do it anonymously. I’m sure you can also, you could use anonymous surveys if you wish to.

 

Apple retail, I just mentioned them. “The retail division’s mission, he declared, was to the enrich the lives of customers and employees. The stores would be places for people to gather and learn, not just buy. There be designed to encourage an ongoing relationship with customers, not merely a one-off purchase transaction. The delighted customers, Jonson believed, would tell their friends and colleagues about their wonderful experience at the store. He envisioned the neighborhood surrounding each Apple store become populated with customer advocates who will promote the brand and act as missionaries to help convert PC using friends and neighbors into Mac enthusiasts”

 

Sounds religious. We’re sending out missionaries. “Mission of Apple retail, similarly is to enrich lives and a vital role for NPS is rigorously measuring how consistently the division achieves this mission. When customers score their experience at a store a nine or a ten, Apple can assure that Apple’s employees have enriched those customers’ lives and in so have enriched their own.”

 

About halfway through the book. Getting through here. One of the things that was interesting is they say you can use the NPS score for employees, which they call the ENPS. Your employees, as you can imagine the question there is how likely would you recommend to your friends and family working at ThreeWill. It’s a question about internally looking at this. Apple retail uses this, Rackspace uses this. They have settled on one central question to determine employee engagement, on a scale of zero to ten, how likely is it that you would recommend this company as a palace to work?

 

I thought that was interesting that you can use it internally as well to see how well you’re … internally doing. Close the loop, chapter eight is closing the loop with customers. There’s a story in here about mailing from a cable TV provider calling in and you can … the computerized voice begin the survey with these words “Please provide feedback on the performance of your representative. I ignore that request because the excel, the rap excel that what she had trained to do.” Basically this was something where the issue wasn’t … the person, the issue was the process and the support system behind the person and understanding that. I think we’ve talked about this a couple weeks ago or maybe even a couple months ago, of how we were trying to buy a service and it wasn’t so much that person but it was the whole support system behind it, and you needed to have some way of understanding that there was an issue.

 

In this case, they were talking about how are we going to respond to this. The whole, the end of that questionnaire ends up with we really value your business and this guy, he’s upset because you dealt with a very bad experience and it’s almost like it puts really bad … tastes in their mouth if you’re saying, if you’ve had a bad experience and then telling them, we really care about your business.

 

Then he talks about an experience with Verizon Wireless where he put in a negative response and he wanted to see what the feedback, he’s put a three out of ten and “A few days later I found a message on my home answering machine from a manager at the Verizon store where I had purchased my cell phone. I called her back, she explained that she had received my feedback and she wondered if I could take a few minutes to discuss how she might improve my experience.” So that’s one of the things with this, if you do get any detractors, it gives you or I the chance to go back to them and talk with them and say, well what is it that we could do better.

 

Tommy Ryan:Right.

 

Danny Ryan:Part of this we cover in the retrospectives I think as well as getting some of that feedback but interesting to read that. Then there’s a section on creating customer communities groups of people that provide regular feedback on the company’s products and services. For a lot of the net promoter score, the customer service stuff that we’ve done, has it been typically internal communities or external communities or what does that look like so far? For some of the companies that we’re … I know I’m doing a lot of talking here.

 

You mentioned that we’ve helped out with a net promoter score for some of our customers, has it been for customer facing or has it been employee facing or a combination of the two or what does it look like so far?

 

Tommy Ryan:Customer facing, and then there’s one solution that is really employee driven but based on customer experiences so what they’re hearing either as someone in the store, is someone just out there in the world listening or getting feedback about their services and ways to improve. So they’re essentially submitting that as a suggestion and having a closed loop process to make sure they get back and close that loop.

 

Danny Ryan:Nice.

 

Tommy Ryan:Also, using the NPS to justify certain projects, to say this will help this aspect, that is driven poor NPS scores.

 

Danny Ryan:Got you. We’ve got through the majority of the book, the last part of it is really about some of the barriers that you’ll run into when trying to put this into place. A lot of it you need to have the management of the company behind it, which is a lot … I think you guys were … both you, Bruce, and JM have all been very behind this as a way of measuring and as a way of understanding how were doing on projects. You really need to have that as a part of the process of what we do.

 

I know I’ve been trying to, I’ve been tying this into as were wrapping up projects to go and do, get our net promoter score out of that and it’s been wonderful. A part of this I think that is great as well is that customers know that you’re doing this and they know that there’s going to be a chance for them to provide input, hopefully positive, but also if you do have a bad experience, that we care about it. I think when you’re working with smaller companies, one of the things that’s really nice about that is you know that ultimately the owners of the company really care about providing a great service.

 

I think this is one of the ways that were really checking every single project that we did a good job.

 

Tommy Ryan:Yeah, if you care about it you would measure. I think we find that we have the best management around a concept or idea or a value based on measuring it. It’s great that we’re doing that. I think we’ve cared about it over the years and tried to collect that information one way or the other but I think the NPS score is a very nice simple way to do that and a standard way to do that. It’s nice that these surveys have gone down to, we used to have like a two page survey, now it’s down to three questions. I think that we get more participation that way and we don’t overburden our customer with filling information that we can’t really act on and it’s just data.

 

Danny Ryan:Yep. Some of the things that I’ve done just to make it, just to encourage people a little bit more is like I have a Starbucks gift card, just to say thank you for taking the time to take the survey, on the form as well as it’s got a question about are you able to receive gift cards. I don’t want to get them in trouble with their corporate if they’re not able receive any gift cards. That’s just been another way I think of a real way of somebody saying hey we’re going to take the time to send a gift card as a follow up as well, helps promote this.

 

Tommy Ryan:Yeah it allows people to quote, you’re giving them a thank you to fill it out. The only thing that you worry about is does that impact what they would rate you? I don’t know, I haven’t thought through that process.

 

Danny Ryan:If it’s just … if it was $100 bucks, or something that was … it’s more of just a gesture would be what I … and id be interested to hear if people want to comment on this. For me it was more of, I’ve just seen this used before. Other marketers use the small gift card, the thank you with a coffee type of concept and it’s easy enough to download it and put it onto your card and the next day they’re buying a scone and a coffee thanks to you because they took a little bit of time out of their day. It’s not a great amount of money, but it’s something that’s just a way of saying thank you.

 

Tommy Ryan:Yeah, I didn’t know if the book said anything about that.

 

Danny Ryan:No, no, you know whether they said to try to, try different things with getting participation and so whatever it is that you want to try, so that was one of the things I wanted to try to see how that would … it’s not like I’m saying I’m going to send you a gift card if you give us a ten, they do say there’s parts or chapters that are tricky.

 

Tommy Ryan:I get this from Toyota, I’m sorry to say that, but you get the service department that tells you, you need to, I mean they almost tell you, you need to give the highest score. Or you get this question.

 

Danny Ryan:Oh threatened you.

 

Tommy Ryan:We, you know you get this question of why would not you wouldn’t give me a ten? Just let me know if there’s anything that I need to do to make sure that you provide me a ten. I don’t like that.

 

Danny Ryan:I will not give you a ten because you asked me that question. It seems subversive.

 

Tommy Ryan:Yeah it’s almost like a guilt trip that if you don’t give me a ten I’m going to get in trouble and at the end of the day, they should want to get honest feedback so they can know when things are not going so well for their customers. Otherwise, they get tens all the time and then the customer goes away and they don’t know why.

 

Danny Ryan:It’s funny because even their companies that will audit your NPS basically makes sure you’ve got a sound system put into place and some folks will try to trick the system where they’ll like not give a customer that they know of has had a bad experience will not give them a way of giving feedback. That’s a way of gaming the system.

 

Tommy Ryan:That’s bad.

 

Danny Ryan:It needs to be consistent, like for us, I’m trying to make sure that on every project, as we’re sending out the last invoice that attached into that and we’ll get this feedback on every single project. It was interesting to read. Anything else that you’ve experienced so far with net promoter score? I know I’m starting to cover it in the company meetings where I’m doing it both overall NPS, which I think is like a 94. Which, is wonderful to see. Then for that quarter, I’m giving a quarterly NPS, which was lower because we had some people who were eights who we didn’t interact with that much. I thought that was kind of interesting. We had some small interactions with some folks and they filled out the survey and I think if we did have a full fledged project with them, we might get a higher score.

 

Or get a nine or a ten but it’s just interesting to see that.

 

Tommy Ryan:Yeah it is because we know we’re not perfect so we want to hear that when we’re not so we can work on improving and you can’t improve unless you get honest feedback.

 

Danny Ryan:Yep. This is really rewarding to see this. I’ve liked hearing back from folks, especially the quotes that I’m hearing back as far as why they gave us a ten. It feeds me, I think it feeds you and it’s really nice to hear that they want to work with us again if they have the opportunity to work with us again, which is …

 

Tommy Ryan:A big part of what gets us up in the morning is hearing that. Definitely.

 

Danny Ryan:Awesome. Thank you so much, Tommy for taking the time.

 

Tommy Ryan:Like your socks.

 

Danny Ryan:Oh you, oh yeah. Let me see yours?

 

Tommy Ryan:These are repeats

 

Danny Ryan:I think these are new.

 

Tommy Ryan:They look new to me.

 

Danny Ryan:Yeah, I’m a little crazy. Thank you everybody for taking the time to listen to this. One of the great things about working with ThreeWill is that we will get your net promoter score at the end of the projects. We do care about successful projects. Especially if you’re doing anything share a point related, technology wise. We’re a great company to come and talk to. Definitely drop by our website and check out our services but thank you for doing this Tommy and thank you everybody for listening. Have a wonderful day. Take care. Bye, bye.

 

Tommy Ryan:Adios.

 

Tommy RyanThe Ultimate Question 2.0 and the Net Promoter Score

Join the conversation

This site uses Akismet to reduce spam. Learn how your comment data is processed.