Net Promoter Score Archives - 6sigma

Shipping Email Notification: Customer Delight Examples

admin — Fri, 28 Feb 2025 05:55:56 +0000

Customer Delight Examples can come from the most unexpected places – like a shipping notification email.

If you buy from an online retailer this year, you will most likely receive an email communication about your purchase, probably showing something like:

Item Bought, Quantity, Price, and Amount Charged to your Credit Card
Date Shipped and Expected Arrival Time-Frame

All pretty basic, right? In fact, if the email only consisted of the above items and the product arrived within the expected time and in good condition, then you’d probably consider yourself a satisfied customer.

But, how much more effort would it take the company to say something with a little more emotional hook; something that would engender a smile, laugh, and ultimately build positive memory and loyalty? In other words, not just satisfaction, but loyalty —

My close friend recently purchased an item from CDBaby.com and the email he received went the extra mile — it showed the regulatory-compliance-payment items, but it also went a little bit further — and, that little extra effort created a smile, laughter, and loyalty:

Your CD has been gently taken from our CD Baby shelves with sterilized contamination-free gloves and placed onto a satin pillow.

A team of 50 employees inspected your CD and polished it to make sure it was in the best possible condition before mailing.

Our packing specialist from Japan lit a candle and a hush fell over the crowd as he put your CD into the finest gold-lined box that money can buy.

We all had a wonderful celebration afterwards and the whole party marched down the street to the post office where the entire town of Portland waved “Bon Voyage!” to your package, on its way to you, in our private CD Baby jet on this day, Tuesday, December 16th.

I hope you had a wonderful time shopping at CD Baby. We sure did. Your picture is on our wall as “Customer of the Year.” We’re all exhausted but can’t wait for you to come back to CDBABY.COM!!

Thank you, thank you, thank you!

Sigh…

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How to Game the Net Promoter Score

admin — Wed, 14 Aug 2013 19:10:33 +0000

Among other philosophical questions you’ve pondered, I’m sure you’ve also asked yourself “How to Game the Net Promoter Score?”. Well, I’m here to answer that question for you. How to apply an effective net promoter score program is a topic for a different day.

As more and more companies adopt the Net Promoter Score, I’m seeing various ways in which the Net Promoter Program has been implemented. For some of those implementations, it is accurate to say that the implementation of the program enables some gaming or hacking of the actual NPS score. In what follows, I’m going to highlight various misguided and faulty implementations of the Net Promoter Program that leads to an unhealthy focus on the score itself and, even, gaming of the NPS to make the score what the firm wants it to be, rather than a reflection of actual customer sentiment or loyalty.

Only Survey Customers

The Net Promoter Score measures loyalty to a service, product, but also to the brand. This is why the NPS in a properly implemented NPS Program also surveys respondents who are not customers. For example, have you ever visited a website while you are NOT logged in and are invited to take an NPS survey? The shear fact that you’re not logged in means the company doesn’t who you are, yet they want to know if you would be interested in taking their NPS survey. In this situation, what is being measured is affinity toward the brand and overall sentiment to the brand or, rather, the perception that respondent has for the brand in question.

Only Survey Happy Customers

As a corollary to the first, survey only happy customers. If you survey only customers with the highest likelihood of being happy and satisfied, then your NPS will be high. In this scenario, it will be to your advantage to increase your response rate, as to get more happy customers responding to the NPS survey, further inflating the NPS.

Keep NPS Survey Response Rates Low

The NPS Score is inversely correlated with Survey Response Rates. Why? Research has shown that customers who were surveyed but did not respond, behaved more like Passives or Detractors. If more and more of the “surveyed but did not respond” population begin to respond, then you can expect your NPS Score to decline. And because our motivation is to game the NPS Score to make it what we want and not have it reflect customer sentiment, we obviously don’t want this situation.

As a natural byproduct of the strategies described above, your response rates will be low. That’s okay. This means that your NPS will have the greatest likelihood of being high. The downside? Well, this improper implementation of the NPS Program means you actually won’t be collecting broad or big picture customer sentiment. The selection bias will be astronomically and statistically ridiculous. But, that’s okay. By keeping NPS Survey response rates low will most likely result in a higher NPS score, which is a really good way to game the NPS.

In All Seriousness

The above strategies are how some companies have implemented their NPS Program. I don’t believe the companies were deliberate in their gaming of the NPS, just misguided. Nevertheless, this leads to inflation of the NPS, making it impossible to do apples to apples comparisons of the NPS scores between industries or competitors.

An appropriate and proper implementation of the NPS Program (score only, not the Feedback Loop portion) is described below:

Implementing the NPS Program such that the broadest cross-section of your audience is surveyed and collected will ensure that the NPS will more likely be an accurate reflection of customer sentiment. To do so, it’s suggested that:

Survey Non Customers
Survey Customers with no transactions
Survey Customers with transactions

By surveying customers with transactions, customer with no transactions, and non customers but interact with your service or product or brand, you’ll be able to investigate the stratification of Promoter, Detractor, and Passive among the cross-sections of the respondents to give you a more accurate NPS and a Net Promoter Score that is not hacked, gamed, or manipulated.

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Ignore the “Net” in NPS: Manage Promoters and Detractors Independently

admin — Fri, 07 Jun 2013 14:40:18 +0000

Mobilizing an entire organization to a single number, such is the benefit of the Net Promoter Score. But, doing so can be misleading and can lead to behaviors overly-focused on the score and, moreover and ironically, completely miss the spirit of NPS: Improving the Customer Experience. Yes, improving the Customer Experience and improving the NPS score are not always synonymous. And, when we think they’re one and the same, we can say Goodbye Customer.

To the detriment of most companies and organization, too many are focused on the NPS score. As a consequence, they often miss the mark. The “Net” in NPS is too far from the bone, as it were, and so it makes sense that the mark is often missed by organizations.

What is needed is an understanding of the component and atomic parts of NPS. That takes us closer to the bone and the heart of the Customer Experience.

Net Promoter Score

For review, NPS is calculated by taking the % of Promoters Less the % of Detractors (img src: Satmetrix).

As you can see, the value of NPS is that it is statistically very difficult to obtain promoters – there’s only a 2/11 chance of obtaining a promoter. With 7/11 of the weight slanted toward detractors, it forces the enterprise to listen and focus it’s efforts on reducing the root causes of detractors.

“Net” in Net Promoter Score (NPS)

I claim that focusing on the “Net” in NPS encourages us to miss the mark. Let me explain. Suppose the following:

Net Promoter Score (Daily)
	Day 1	Day 2	Day 3	Day 4
Promoter
Passive
Detractor
NPS	40	40	60	50

Given the table above, would you agree that Day 1 and Day 2, because the NPS was the same, that the customer experience was “flat” – that is, there was no change in the actual customer experience? How about Day 3 and Day 4? Would you say that there was a degradation in the customer experience?

Now, let’s see what happened on Day 1 and Day 2.

Net Promoter Score (Daily)
	Day 1	Day 2	Day 3	Day 4
Promoter	60	50
Passive	20	40
Detractor	20	10
NPS	40	40	60	50

As you can see, 60% of Day 1 were promoters and 50% of Day 2 were promoters. Additionally, Day 1 had 20% detractors and Day 2 had 10% detractors. Yet, both Day 1 and Day 2 had an NPS of 40%. Would you still say that both day 1 and day 2 were the same in terms of customer experience?

Now, let’s see what happened in Day 3 and Day 4.

Net Promoter Score (Daily)
	Day 1	Day 2	Day 3	Day 4
Promoter	60	50	70	75
Passive	20	40	20	0
Detractor	20	10	10	25
NPS	40	40	60	50

Looking at Day 3 and Day 4, would you say that the customer experience was better on Day 3 than on Day 4? After all, Day 3 had an NPS of 60 and Day 4 had an NPS of 50. Surely, an NPS of 60 is better than an NPS of 50, right?

As you can see, Day 3 had 70% promoters and day 4 had 75% promoters, yet Day 4 had a lower NPS. Most organizations would be in a firefight, trying to understand why Day 4 “dropped 10 points”.

Manage Promoters and Detractors Independently

My example underscores the importance of managing Promoters and Detractors Independently of each other. This subtle, but most important nuance in the Net Promoter Score program is often missed, sending organizations in a tizzy chasing the overall NPS, when the individual component parts are telling an entirely different story.

Miss the Mark, Customer as Collateral Damage

Until organizations understand the subtle difference between the component parts of the Net Promoter Score and continue to manage the “Net” of NPS and not its atomic parts – Detractors and Promoters – the customer will continue to be the casualty. Evaluate how you are managing your NPS program. Test what I’ve shared here. You and I owe it to our customers.

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Net Promoter Survey of Facebook Promoted Posts

admin — Tue, 23 Oct 2012 11:15:49 +0000

I recently decided to try my hand at marketing. No, I’m not a marketer – I don’t even claim to profess to know anything at all about the topic. Though, I certainly would appreciate a private tutor to help me with it. But, I thought I’d give it a shot. I published a little, fun Kindle Book recently and decided to try marketing it on Facebook as a Promoted Post. A promoted posts is where one creates a post, it shows up in your timeline, and when you pay $7.00 (the cost of a facebook promoted posts), your post containing the marketing message supposedly stays in the timeline longer and is seen by more people.

Results?

The reality is I have no idea what the results of the campaign were. Yeah, I lost $7.00, but here’s what I learned:

If you’re going to try something, you need a way to keep score – this answers whether or not the thing you’re trying is working out or not.
If you’re gonig to try something new, do so in a quick and cheap way. This approach supports the concept of Minimal Viable Product (MVP) and is also well in alignment to the principles of Lean Manufacturing.

Net Promoter Score

Well, several days after the campaign and well after my $7.00 went into a black hole, I received an email from Facebook asking me to complete a survey. Awesome – I like surveys, so I decided to take it.

And, sure enough, the survey is centered around the Net Promoter Program.

View the survey below.

Below are the specific questions Facebook asked in the survey:

How likely are you to recommend Facebook to someone you know? (0 = Not at all Likely / 10 = Extremely Likely)
What percentage of your friends do you assume see each of your posts in their newsfeed?
- Their choice of wording is strange. “Assume” is weird. “Believe” might be a better option.
Are you aware of a new option to ‘promote’ a post on Facebook?
- Again, weird survey question. Of course I’m aware – I already did it.
Please share any feedback you have about the option to promote a post you make on Facebook.
How satisfied are you with what happened when you promoted a post?
- completely dissatisfied
- very dissatisfied
- somewhat dissatisfied
- neither satisfied nor dissatisfied
- somewhat satisfied
- very satisfied
- completely satisfied
Why were you either satisfied, neutral, or not satisfied with your promoted post?
- Again, odd question.
How likely are you to recommend the promote option to someone you know?
- Interesting. A Net Promoter question for their promote a post product. Answer: Not likely.
How satisfied were you with the following:
- The report of how your promoted posts performed
- How many of your friends saw your promoted posts
- How many of your friends either commented or liked your promoted posts
- The way the promoted posts looked in the newsfeed
  - My answer to the above questions? Completely Unsatisfied. Why? Well, I never received a report, so I have no idea how the actual promoted post performed.
How much better or worse do you feel the option to promote a post makes your experience on Facebook?
- Much worse
- Worse
- Neither better nor worse
- Better
- Much better
  - Again, odd question. Actually, it’s terrible questionnaire design.
  - A better question would have been: “Thinking of the feature of promoted posts, from a scale of 1 to 10, where 10 is Definitely, rate the option of having the option to promote a post”
What percentage of your friends do you assume see each of your PROMOTED posts?
- This question is slightly varied from question #2; question #2 focused on posts in a Facebook timeline in general, whereas this question focuses on the Promoted Posts feature and how many of my friends I think saw it. My answer – I have zero idea. There were no reports to tell me otherwise.

So, thinking of the Facebook Quarterly earnings on October 23, 2012, my guess is that many on Wall Street will be curious about how Facebook’s attempts at creating other revenue streams are going. If other customer’s experience is like mine, the answer would be “not very good”. But, knowing what I know about Mark Zuckerberg, I’m sure they’ll figure this out and quickly find a product that is good for customers as well as for Facebook monetization efforts.

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Macaroni Grill: Ordered Chicken but Got Beef and the Net Promoter Score Survey

admin — Wed, 11 Jul 2012 15:22:59 +0000

A few weekends ago, my wife and I went to Macaroni Grill for dinner. We had a great server who was funny, helpful, and courteous. After looking at the menu, I decided to order a meal with Chicken – some new summer entree and I don’t remember its name well. But, I was looking forward to trying something new.

Boy, did I get something new and surprising.

Raw Beef or Cooked Chicken?

We finally got our food and in the course of eating, I took a bite of what I thought was a mushroom. But, it turned out to be mostly raw beef. Here’s the picture below:

Getting Beef when I was expecting Chicken was one surprise. But, receiving raw beef was not good because it is a safety issue and is also pretty disgusting.

We told the server, and instead of not charging me for my meal, she gave me and my wife desert for free. All in all, the desert cost $7.00 – which was nice, but not quite correcting the raw beef experience. I didn’t fight it because the server was very nice and we courteously said “thanks”, paid, and then left. But, we didn’t leave with the best of memories or experience.

In the following pages, you’ll see what I mean.

The Net Promoter Score Survey

On my Macaroni Grill receipt, there was a website where I could respond to a survey. So, I did. It turns out it was a Net Promoter Score survey:

So, obviously given my experience, I didn’t rate my Macaroni Grill experience very high. I was certainly not a Promoter and I was certainly not going to recommend that my friends or family go to Macaroni Grill after my experience. So, I rated Macaroni Grill a “0” – I was a definite Detractor.

Am I a Detractor or a Promoter?

In the text box, I shared about my experience along with my Net Promoter Score. Then I hit submit. If you turn to the next page, you’ll be surprised as much as I was.

And, since I gave a low score, I was considered a Detractor – which is a lexicon in the Net Promoter Score program. By doing so, this was the next dialogue shown to me in the survey, which showed empathy for my negative experience, then promised to share my feedback with the Restaurant Manager of that specific Macaroni Grill:

What happens next is interesting and I think you’d be surprised as much as I was.

For completing the survey, I received a $5.00 off coupon off my next visit. Which was not happening anytime soon or at all.

I wasn’t planning on visiting Macaroni Grill based on my experience. But, thanks for the Macaroni Grill coupon.

I have to admit, I was surprised that the Macaroni Grill actually have a detractor outreach program – that was my experience next.

Net Promoter Score Detractor Reach-Out

About 2 days later, I received an email from the Macaroni Grill General Manager for the Murfreesboro, Tennessee area. His email was personal, demonstrated empathy, and committed to make things right with me. I appreciated it. Below is his email.

It’s been about 1 week now and I haven’t received the $20.00 coupon the general manager promised to send me. But, I give him some credit for reaching out to me.

NPS Lessons Learned

There are several great lessons from my Macaroni Grill experience:

Macaroni Grill provided a way to receive feedback via the survey on the receipt. This is an example of what I call “Continuously Listening” – which is a mark of maturity in the world of customer interaction.
Taking action on that feedback is an example of what I’ve called the Customer Feedback Loop or NPS Feedback Loop.
The Net Promoter Score is a great way to mobilize an organization toward improvement, but the score itself is not where the value lies. The true value of the Net Promoter Score is in the program, NOT the score itself. The heart of the program is the Customer Feedback Loop – listening to customers, then systematically taking action on that feedback to improve the business.

All in all, my entire experience with Macaroni Grill can be best described by this Macaroni Grill Customer Journey Map:

click to see larger image

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NPS Customer Feedback Loop, Closed Loop System, and Lean Thinking

admin — Mon, 02 Jul 2012 11:45:35 +0000

This article explains the heart of any Net Promoter Program: The Net Promoter Score Feedback Loop.

The Net Promoter Score (NPS) is a metric that more and more companies are using as a measure of loyalty and, proponents argue, is a leading indicator of future profit and earnings. One of the critical components that many companies miss and fail to implement is the closed-loop customer feedback system that makes customer insights into actionable improvements.

In what follows, I’ll share my experience of how I’ve been able to blend Lean Thinking (or just plain continuous improvement) with NPS – this approach, coupled with visualizing the customer’s journey via a Customer Journey Map – will make for a powerful combination.

Customer Feedback Loop

Below is the high level Customer Closed-loop Feedback System I’ve designed and used at several companies:

If you’re looking at it and wondering to yourself “Hmmm, man, that looks a lot like the Toyota A3 approach or PDCA“, then you’d be right. That’s exactly what that is, with a few minor changes that I’ll describe below.

Step 1: Collect Customer Verbatim Comments

This is the step where verbatim comments from Detractors, Promoters, and Neutral survey respondents are collected. In this step, we’re primarily interested in the Detractor verbatim comments.

Step 2: Categorize Verbatim Comments into Themes & Frequency

[callout title=”What is the Deming Cycle?”]The Deming Cycle is best known by the acronym PDCA. Learn more about it from a fun LEGO Model[/callout] In this step, we want to categorize the detractor comments into major themes. Then, we use basic tick sheet methodology to start ranking each theme by frequency to ascertain the gravity of the customer complaint.

In this step, we need to satisfy the MECE Principle: Mutually Exclusive and Comprehensively Exhaustive. This means that if I tick x in one category, I cannot also tick x into another category.

Step 3: Visualize Data in a Pareto Chart

To make sense of the data, it must point us somewhere that is both directionally correct and actionable. One effective way to do that is to visualize the data in a Pareto Chart. Using the Pareto Principle, we hope to find the 80/20, in order to better align and mobilize our scarce resources as well as attack the 20% of the problems affecting 80% of our customers.

Step 4: Apply Root Cause Analysis

Once our Pareto is reasonably sufficient, we must then attack the first few bars in that Pareto. The next step is to do the 5 Whys or a more thorough root cause analysis. This step might even include Hypothesis Testing, if necessary in order to validate or invalidate our hypothesis.

Step 5: Implement Practical and Simple Countermeasures

Once hypotheses have been validated, then it’s important that we implement simple and effective countermeasures. This step must be done quickly and not get caught up in red tape or corporate bureacracy or else the defect will continue to negatively impact the customer, of which internal strife and internal infighting will be the cause. Get it done quickly, but apply effective and simple countermeasures that surgically attack the root cause(s).

Step 6: Measure and Adjust

In order to learn and to improve, we must measure our efforts in order to gauge whether we actually improved the customer experience by reducing the defects they have shared with us. Ideally in this step, if we did things correctly, by effectively attacking the largest bar in the Pareto in a previous step, that bar which was the largest representation of a customer complaint should now be the smallest. This would represent success on behalf of the customer.

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Net Promoter Score and Six Sigma: A Match Made in Business Heaven

admin — Wed, 22 Jun 2011 11:17:17 +0000

Net Promoter Score Six Sigma are two methodologies that fit perfectly together. One is meant to measure customer loyalty by identifying the sources of dissatisfaction; the other is a methodology meant to eliminate the root causes of customer dissatisfaction. Using the Google Correlate tool, I’ve been able to see some interesting and sometimes crazy relationships and also validate that I’m not alone in thinking that NPS and Six Sigma are a good fit for each other.

Google Correlate is a tool that one can search Keywords on to see what other keywords are searched in conjunction with it and then Google provides the correlation coefficient (R^2) to see how closely the words are searched together.

No, correlation is clearly not causation. The tool simply tells us which keywords are searched together.

So, today, I present Lean Six Sigma and Net Promoter Score:

Indeed, correlation is not causation. But, at the same time, it really makes sense to me to see positive correlation between lean six sigma and net promoter score (NPS).

Wht is the Relationship?

At bottom, practitioners of lean and six sigma are aiming to create a better customer experience. And, theoretically, the Net Promoter Score (NPS) is a measure claimed by Bain and Company to measure loyalty of customers to a company. The NPS can be measured by one of two questions:

How likely are you to refer (company name or service or product) to a friend in the next (number of months)?
How likely are you to (purchase x product) in the next (number of months)?

According to Bain and Satmetrix, the response to those questions on a 1-10 scale gives us a sense of the percentage of Promoters and Detractors and is a predictor of loyalty. If this is true, then the relationship between those who practice lean six sigma are interested in improving the customer experience by reducing the number of detractors.

That makes sense to me. But whether the Net Promoter Score itself is a decent predictor of loyalty is a different topic. I’m not so sure about that, but the Google correlate data between the keywords “lean six sigma” and “net promoter score” is interesting.

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Qwest Customer Service NPS Loyalty Program: Irony of the Detractor

admin — Wed, 21 Jul 2010 10:30:12 +0000

The Irony of the Qwest Customer Service NPS Loyalty Program.

I’m considered “Mass Market”. Let me explain.

I received an email recently from Qwest Communications requesting that I complete a survey. I read the email, then the signature had the executive’s name, which caught my eye:

Dan Yost
Executive Vice President
Mass Markets

Is that what I’ve become? A Mass Market? Does Qwest really call their customers “Mass Market”?

Here’s that email:

Dear Valued Customer,

As part of our commitment to improve your experience with our product, services and people, I am asking for your assistance in providing valuable feedback by participating in our Customer Relationship Survey.

Your opinion is extremely valuable to us, and the information collected from the survey will be reviewed and acted upon by Qwest as part of our continuous improvement efforts.

Satmetrix, a leading provider of customer experience management solutions, will be conducting the survey on our behalf. The survey will take about 5-8 minutes to complete. To access the questionnaire, please click here.

Thank you in advance for your time and consideration.

Yours sincerely,

Dan Yost
Executive Vice President
Mass Markets

The irony in all of this is this: the incredibly impersonal, corporate-speak email is about a customer relationship survey asking for Net Promoter Score from Satmetrix information – on whether I’d recommend Qwest to a friend.

Message or Messenger

It’s clearly both. The message that Qwest sent is impersonal; the messenger’s job title puts me squarely amongst millions of other blob-like customers – heck, we’re a Mass Market; kind of akin to “a bunch of customers” or “a grundle of people” or “revenue producing population” – you know, all really warm and fuzzy labels that repel rather than create loyalty.

To their credit, they probably recognize that Qwest Customer Service and Qwest products aren’t very good and that there is wholesale Detractors (NOT Promoters) for Qwest.

At least they are trying.

How Qwest Can Improve

Simple measures can make a big difference.

Instead of “Dear Customer”, how about using a variable that inserts the customer’s first name instead. That would be more personal and show that you might care a little bit.
The title “Mass Markets” is just so impersonal. Even as an internal job title, it’s just not good – I’m sure there are human resource professionals that would agree with me on this point. Regardless, if Qwest chooses to keep that as an internal job title, at least don’t announce it in the signature of a huge email campaign. “Mass Markets” – please.

I think if Qwest had done my two suggestions above, it would’ve been a much better email communication. And, heck, the content of the email might actually be more aligned with the spirit and intention of the email.

Below are screenshots of the Qwest Net Promoter Score (NPS) Survey:

This next section in the Customer Satisfaction Survey is interesting because it asks my propensity or asks me to gauge how much of a detractor I have been:

How many friends or colleagues did you advise against doing business with Qwest or CenturyLink in the last 6 months, if any?

Now, in this next section of the customer satisfaction survey, I’m asked about my perception on the reputation of Qwest or CenturyLink:

Please rate your satisfaction with Qwest of CenturyLink for each of the following. Check “Not Applicable” if you do not have experience with a particular area:

Is easy to do business with

Is innovative

Is my preferred company to do business with

Is customer focused

Delivers value relative to cost

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Goodbye Customer: Customer Retention Programs and Win Back Initiatives

admin — Sat, 22 Aug 2009 12:29:00 +0000

Goodbye Customer.

There are reasons customers leave. That is sometimes what we say, without knowing the full costs and burden that proposition means on the business. What we fail to acknowledge is the most effective customer retention programs produce excellent customer experiences in the first place.

Ironically, businesses are often unaware that their actions are pushing the customer away while at the same time trying to recover and retain them through expensive customer retention programs. Metaphorically, this is like pushing the customer away and pulling the customer back — at the same time. It is no wonder that customers have had enough.

Businesses push the customer away and pull the customer back — at the same time!

Awareness is the missing piece. Shmula.com has developed a simple framework that can serve as a helpful model for the true costs to the business and the burden on the customer — because of our push/pull activities.

The function above attempts to highlight the relationship between costs, complexity, loyalty, customer touches or interactions, and recovery.

Our example shows an interaction between a customer and a website, but it could be an interaction between customer and anything: a device, a brick-and-mortar store, or any other business.

Customer interacts with a company website for commerce
Customer has a a question or problem, she searched the Help Pages or engages in some site self-help
Customer has not resolved her concern, so she engages the live chat service
Customer orders item, maybe. At some point, Customer has another concern, causing her to call the company
Customer interacts with Intravoice Response System (IVR), a form of automated self-help
Customer maybe interacts with a human
More Customer Interaction. . .

At each point above, there is an opportunity for Customer retention and recovery, but there is a cost. Indeed, the Recovery Curve is such that the costs of recovery increases as there are more interactions, while at the same time decreasing customer loyalty.

The Goal is to Reduce Interaction

Aza Raskin, the Head of User Experience at Mozilla Labs[1. Aza Raskin is the son of Jef Raskin, the inventor or the Macintosh. Aza is the Head of User Experience at Mozilla Labs. Aza has been interviewed by shmula.com and that interview can be found here.], and a good friend of shmula.com, has said:

the fundamental goal of interaction designers is to reduce interaction

From a customer’s perspective, they want to find something to buy, buy it, and move on. Indeed, proponents of Lean Thinking would clearly agree and so would the customer.

From the perspective of Lean Thinking, we think of Reducing Interaction as the reducing “non-value added activities” — activities that the customer would consider waste.

When There is Added Interaction

If there has to be a recovery activity, then the quality of that recovery activity must have the goal of increasing Loyalty. Doing this has a three-fold purpose:

The sooner the business can resolve a customer concern, the better
If (1) is satisfied, it prevents further unnecessary interactions, prevents further costs, and preserves or increases loyalty
If (2) is satisfied, then this could potentially mean incremental revenue in the future from a repeat customer

A Case Study

Amazon.com clearly subscribes to the “Reduce Interaction” mantra. I can share many stories, but I won’t to preserve confidentiality. Zappos.com, on the other hand, has taken a stance on the “When there is Added Interaction” front by making Service a key differentiator and it has clearly helped them win market share. Now, both Amazon.com and Zappos.com are one big family.

Another Case Study

My experience at Home Depot has gained some popularity and will now be part of an upcoming book — details later. In that experience, I sent a tweet explaining my recent experience at Home Depot. That tweet quickly made its way to Facebook and the rest of Twitter. Home Depot communicated with me via their resident Twitter-er and then things ended there, without resolution. Clearly not a closed-loop feedback.

Home Depot has a call center, thousands of customer service representatives, and now a team of Twitter agents that monitor social media channels. When things don’t go well, costs grows and loyalty decreases. The framework above clearly describes my experience and the experience of most customers.

Reminder

Companies often speak in terms of Features, Shiny Objects, and the like. Companies often call this “Innovation” or some other buzz word. From a customer’s perspective, their mental model is this:

I won’t really remember your features or their details, but I’ll remember how I felt; I’ll remember my experience — both the good and the bad.

So, let’s design our products, services, and our business on behalf of the customer. Many people and businesses forget this simple fact; let’s get grounded in the customer — that is good for the customer and good for business.

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Customer Service Retention Example A Chance for Redemption

admin — Tue, 24 Mar 2009 13:21:07 +0000

Customer Service Retention Example – A Chance for Redemption is an article about my experience at Home Depot – what they did to respond to my dissatisfaction and what they did in an attempt to win back my loyalty.

In a very tough economy, keeping customers happy should have more considerable weight and attention from companies. I had a negative customer experience recently at Home Depot, where they had a chance to redeem themselves from a very poor customer experience.

On March 18, 2009, I went to Home Depot to buy some tools to help my son with his Boy Scout Pinewood Derby car. I’m completely unskilled when it comes to tools or wood carving, so I needed help. I asked someone at Home Depot to help, but the person I asked was very irritated at me and sent me to another department. At that department, the associate said: “sorry, can’t help you.” It turns out, I just needed sand paper and a hand saw, which my neighbor let me borrow.

Following that experience, I sent this Tweet:

I have 296 people following me on Twitter and all my Twitter updates also updates my Facebook page, where I have 350 friends. So, ~600 people saw that Tweet. Six people responded to that Tweet on my Facebook page:

So, negative word-of-mouth from 1 negative experience quickly reached ~600 people. We know from Net Promoter Score (NPS) studies that a Detractor is quite costly to a company, with some studies showing that a Detractor carries a Net Cost of at least $300 USD, not to mention the 600 people that my negative word-of-mouth reached. The same study shows that a Promoter carries a Net Benefit of $1,700 USD.

Moreover, this blog has 1359 Feed Subscribers and an average daily visitor count of 930 unique visitors. So, 1359+296+350+930 = 2935 people are quickly reached from one negative word-of-mouth experience.

So, 1359+296+350+930 = 2935 people are quickly reached from one negative word-of-mouth experience.

In this economy — no, in any economy — a firm cannot risk having negative word-of-mouth or risk producing a bad customer experience: not good for the customer; not good for company.

A Chance for Redemption

My original tweet above, however, caught the attention of Home Depot, to which they responded with the Tweet below:

My initial reaction was very positive — wow, Home Depot monitors Twitter and responds quickly to negative word-of-mouth in the Twitter stream.

I sent @HomeDepot a direct message, containing my email address; I didn’t receive a response for a while, then I received the Tweet below:

The Tweet was followed-up with an email, which is below:

Pete I’m very sorry to hear that you were treated so poorly. Which store did you visit? I take your experience very seriously and would like to pass your comments along to our store and local leadership.

We are making improvements across the board, but it takes feedback from customers like you to make direct changes in specific stores, send additional resources, etc¦

Also, I’ve alerted our Customer Care team, who may contact you as well to resolve this matter and thank you properly for taking the time to give us this feedback.

Please let me know where this happened, and if it’s a normal occurrence at that location, or something unique to this visit.

XXX XXX, Corporate Communications Manager

The Home Depot

I responded to @homedepot’s email with my detailed experience on March 20, 2009. Since then, no feedback or response.

Lessons Learned

Most customers are charitable and give companies the benefit of the doubt; most customers are willing to give several chances to a company. I’m certainly in this camp.
This means that, from the firm’s perspective, there is ample chance to win-back customers through simple empathy, listening, and reaching-out, not necessarily by giving of anything monetary.
If you are going to have an outreach effort like Home Depot above, execution is key. This means that the initial outreach must reach a conclusion. This is where Home Depot fails. They made a good effort, but no conclusion was reached. I’m happy they reached-out to me, but no feedback was given regarding the negative experience I shared with them.
Monitor Twitter, Facebook, and other social media. Negative word-of-mouth can quickly diffuse to millions of users. My single negative word-of-mouth tweet quickly reached ~600 people. Most likely, some of those ~600 people will not purchase or recommend Home Depot, because of my negative word-of-mouth experience.

Insult to Injury

One more word of advice: a customer’s 1st negative experience can be considered “injury”. Customer Service can take on a balming effect or it can add “insult” to the initial “injury”. Keep this in mind as you frame your Customer Experience strategy.

Hippocratic Oath for Customer Experience

“Do No Harm” ought to be our mantra; “Do No Further Harm” is a great one to have as well.

The post Customer Service Retention Example A Chance for Redemption appeared first on 6sigma.

Reducing Customer Service Contacts

admin — Tue, 27 May 2008 05:36:12 +0000

In some organizations, the Customer Service function is largely viewed as a cost center, draining resources of the firm. I maintain that this perspective is what less mature companies support. More mature companies and, subsequently the more successful ones, understand the strategic fit of Customer Service in the overall value chain and it’s functional role in the supply chain.

In what follows, I’ll take a hypothetical iPhone defect case and show how customer service in this example plays a pivotal role in the overall iPhone supply chain ” a key player in the overall product value chain.

Strategic Fit of Customer Service in the Supply Chain

In a supply chain network, the Strategic Fit of Customer Service is often the voice-of-the-customer post-release of the service or product. The phrase start with the customer and work backwards is really a misnomer. Why? Well, in most products or services, it really starts with the customer and ends with the customer ” that is, the customer’s voice is heard at the level of product design and then the voice-of-the-customer is heard at the market monitoring level, post-release of the product or service.

We know ” through pretty accurate anecdotal evidence ” that the supply chain of the iPhone looks like the following:

From a high-level, we speculate that the following are the material suppliers of the Apple iPhone:

Samsung: The Singapore facility manufactures CPU and Video processing chips.
Infineon: The Singapore facility manufactures Baseband Communications hardware.
Primax Electronics: The Taiwan facility manufactures Digital Camera Modules.
Foxconn International: The Taiwan facility manufactures internal circuitry.
Entery Industrial: The Taiwan facility manufactures connectors.
Cambridge Silicon: The Taiwan facility manufactures bluetooth chipsets.
Umicron Technology: The Taiwan facility manufactures printed circuit boards.
Catcher Technology: The Taiwan facility manufactures stainless metal casings.
Broadcomm: The U.S. based facility builds touch screen controllers.
Marvell: The U.S. based facility builds 802.11 specific parts.
The Apple Shenzhen, China facility assembles the hardware, holds inventory, and handles the pick, pack, and ship steps of the fulfillment process.

If I am correct in any of my research and assertions above, it’s easy to see that if there is any disruption in material flow of any supplier into the Apple Shenzhen, China facility, then production either slows or halts altogether.

We also know that the Austin, Texas Apple Operation is largely where Apple Care physically sits, with another office just outside of Sacramento, California. So, for any contacts into their Call Center, then that is most likely where the contacts will enter (they also have, we understand, outsourcing partners, but Texas Apple Care is the headquarters).

So, more completely, then, the high-level iphone supply chain may represented like this:

Market Monitoring, Defect Data

When a product is released into the market, there can be many channels of market monitoring of the health of the product. In the medical device or pharmaceutical industry, where I once worked, the Market Monitoring phase of the product lifecycle represents a large portion of the product, especially in how it meets regulatory concerns, etc. Marketing and Public Relations also have an especial interest in market monitoring since the voice-of-the-customer post-release can and, usually does, help the firm improve their product or service.

Let us assume the following:

Apple Care (Apple iPhone Customer Service) has a program for collecting product health, post-release, of the product. These can be from inbound contacts to the Apple Customer Service or through blogs or through message boards.
In this program, Apple has a simple and elegant way of making that information actionable, involving collecting data, stratifying of the data, root cause analysis, then practical countermeasures to improve the iPhone through upcoming releases of the product.

iPhone Defect Data

Extending this hypothetical iPhone case, let’s say that Apple Customer Service collects inbound iPhone Defect Data using a very simple check sheet, like the following:

The first column shows very broad defects as reported by the iPhone customers. On the right column are the simple counts. This is called a check sheet. Other variants of this simple quality tool are to collect by day, time, shift, product color, version, etc.

The next step to make this data actionable is to visually render it in a way that points to an healthy area of opprotunity. Below might be a picture that can help us ” an iPhone Pareto of Defects:

The above picture is a Pareto Chart, showing the check sheet data, in visual format. As a consumer of this data, the Apple Customer Service folks might want to pay closer attention to the first and second bars of the Pareto, because those two bars represent iPhone Touch Screen defects.

The Pareto above naturally leads the consumer of this data to ask Why? ” What’s going on with the Apple iPhone Touch Screen?

The next step, then, in the lifecycle of product monitoring and improvement is to conduct a Root Cause Analysis, focused on areas where the opportunity trade-off is good. In other words, to truly get-to-the-heart of Touch Screen defects, Apple must meet with the suppliers of the iPhone Touch Screen technologies. Based on the Supply Chain network drawn above, Apple should meet with BroadComm, the supplier of the iPhone Touch Screen technologies.

In that meeting, both Apple and the supplier can look over the data, go to the Gemba, and conduct root cause analysis on what’s going on with the Touch Screen.

iPhone Defects Root Cause Analysis

There are several tools that can aid in the process of Root Cause Analysis. Basically, it is a simple approach of asking why several times until you arrive at an atomic but actionable item. To visually view the process of the 5-why’s, a tool called an (Ishikawa Diagram) or a (Cause-and-Effect Diagram) or a (Fishbone Diagram) is often helpful ” this tool is referred by either of these names.

Main Components of an Ishikawa Diagram

At the head of the Fishbone is the defect or effect, stated in the form of a question.
The major bones are the capstones, or main groupings of causes.
The minor bones are detailed items under each capstone.
There are common capstones, but they may or may not apply to your specific problem. The common ones are:

People

Equipment

Material

Information

Methods/Procedures

Measurement

Environment

After completing your Fishbone Diagram excercise as a group, it is helpful to test your logic by working the bones: top-down OR bottom-up like:

this happens because of g; g happens because of f; f happens because of e; e happens because of d; d happens because of c; c happens because of b; b happens because of a.

The excercise above is crucially important ” you must test your logic so that it makes pragmatic sense and that the atomic root cause is actionable ” that is, you can do something to correct it, reduce it, or eliminate the root cause.

Once you or your team arrive at a root cause for a specific capstone, then you typically cloud it to identify it as a root cause. A good rule is that there is typically *NOT* 1 root cause for a problem, but potentially several. Below is a diagram of one fishbone, decomposed:

Once the Apple folks and the Apple iPhone Touch Screen supplier arrive at the root causes of the iPhone Touch Screen defects, then the supplier needs to put-in-place countermeasures so that the next shipment of the Touch Screen ” perhaps in the next version of the iPhone ” won’t have this defect anymore.

In fact, there can be much Public Relations and Marketing campaigns from this effort: Apple can show the public that it has listened the concerns of the market; Apple has done this by fixing the defects that most pains that market, in relation to the iPhone product. There can be much branding from an effort like this.

Conclusion

Customer Service plays a key role in the value chain of a product or service. Some firms view and, consequently behave, as if Customer Service were simply a cost center. These firms miss the point altogether: Customer Service is a major vehicle for hearing and learning about what the market is perceiving and feeling and experiencing from our products or services. This data and information can be made actionable through the strategic and smart utilization of Customer Service.

Disclosure

The data above is only hypothetical. The process above works and, if done strategically and with an eye toward the customer, then Customer Service can be a major player in how our products and services can be improved and how we can shape the signals we send to the market and, consequently, how the market can begin to perceive the firm.

I love Apple, but I don’t own an iPhone. I would love an iPhone and would gladly accept a free iPhone from Apple and/or other free Apple products. Apple can join the other companies that have sent me free stuff here.

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