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March 29, 2017

Archives for February 2012

Why NPS should stand for Near Pointless Scoring

By michaelpace on February 28, 2012

NPS and Behavioral scoring model

Just stop for a second and answer a question for yourself:

Why are you measuring Net Promoter Score (NPS)?

  • Does it provide you the best insight to your customer’s satisfaction?
  • Maybe you read The Ultimate Question six years ago, and have found your silver bullet to customer service?
  • Or your boss told you to do it?

Does anyone else struggle with what to do with a score of 27 when last month was a 29?

Do you end up looking at all the verbatim to understand the differences?

Do you ever wonder if someone’s score of 6 is another person’s 8?

Just stop again, and think why are you tracking NPS; for what purpose are you asking people “would you recommend our services/product to a colleague, friend or family?”

(Most probably) The reason you ask this question is to understand “how likely is my company going to retain you as a customer?”  If that was the question you needed the answer, would you consider possible other ways to skin the cat?  The primary purpose of Customer Service departments is to retain customers.  Yes, great customer service can fill the top of the funnel with new, super-qualified and efficient leads. (Learn more about the traditional funnel and how to Flip the Funnel) However, if Customer Service is not focused first on retaining customers, they become a worthless cost center.  Let me be clear, there are clearly differences how companies approach retention (ex. Zappos and <insert name> cable company).  Back to the heart of the matter; if you step back there are more ways than just NPS to answer the question “how likely is my company going to retain you as a customer”.  It is not the silver bullet.

One recent trend that has peaked my interest is customer behavior scoring.  This scoring uses variables, determined by the organization, that help leaders, management, and agents understand how often engage with your product or service, how effective customers are at using your product/service, and how much of your full suite of solutions are they utilizing.  By leveraging behavioral data, you take the subjectivity out of scoring.  This methodology is gaining steam with SaaS model businesses.  For example, you should be able to infer a customer’s likelihood of retention or attrition by understanding how often they log into your application.  This data can be presented in more raw form to analyst teams to create proactive programs and/or fed to front line associates with specific actions to take if contact is made.  There is considerably more actions that can be taken based on behavioral data than from subjective Net Promoter Scoring.  A Boston based company Apptegic is making some nice progress bringing these tools to market.

And while I think behavioral scoring is incredibly interesting, I am not sure it is the answer either.  However, if you are able combine the emotional and subjective scoring with the behavioral and objective scoring, you start to see a much clearer picture of an actual customer.  Emotional scoring (NPS/CSAT) measures the depth of the relationship, and behavioral scoring can measure interaction; together you get what I would call an Engagement Score.

NPS and Behavioral scoring model

And it gets even more interesting if and when you are able to understand the potential impacts of their social graphs.

NPS, behavioral and social graph

Now, you have a clear understanding of who your brand advocates are, and can develop programs to leverage their enthusiasm and the power of their voice.   You can also be more prepared if you have active participants with loud voices who are more likely to comment on displeasure.  Once you understand which box your customer is in, you can develop effective actions to be taken by your leadership, marketing and floor associates.

All I am trying to say is NPS is not the only game in town.  We should all be questioning why we do things.  And finally, if you get to the root of you quest (the why), we can develop solutions that meet and exceed our needs in this dynamic landscape.

Are you fed up with NPS?

Are you using another customer scoring system that is working for your business?

Does a combination score lead us closer to a “silver bullet”?

Putting Social Media in Context or Don’t Hate the Tool, Hate the Carpenter

By michaelpace on February 20, 2012

They say frustration is the mother of invention.  This post is rooted in frustration.  My frustration lies with smart social strategists and users consistently doing the following:

  • Making social media the objective
  • Consistently bashing one social media tool versus another, whether it’s Google +, Pinterest, Twitter, Facebook, MySpace, Path, etc…
  • Fostering conversations on “who owns social media”

Social media is a tool, plain and simple.

  • It is not the result; it’s a way to get there
  • I have lots of tools in my toolbox, including hammers, saws, screwdrivers (manual and electric) wrenches, and so on.  It doesn’t mean one tool is better than another, they just serve  different purposes.
  • Nobody should “own” the tool.  The phone system is a tool, you don’t see Marketing asking the Customer Service team for permission to use the phone.

Hopefully, my homemade “infographic” can put social media and its surrounding terms in context.
Putting Social Media in Context

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*CLTV = Customer LifeTime Value

While I consistently use the carpenter analogy (just because you swing a hammer, doesn’t make you a carpenter, it just makes you more dangerous), I thought including Lord Vader may connect with my audience a bit more.

Do you have social pet peeves or things that generate frustration?

Do you use a different analogy?

Do you do one of those things that drives me crazy?  If so, we should fight on the playground at Three o’ Clock High style.

Is it time to flip Customer Service on its side? – along with Marketing, Sales, Product, etc…

Inception: Flipping Customer Service on it's sideBy michaelpace on february 15, 2012

I am not sure who originally designed how organizations should be aligned. Maybe it was the armies of the past, the mafia or some random Joe who gets no credit for how 99% of businesses are structured today. There is a Marketing Department, Sales, Customer Service, Product, IT, Human Resources, Accounting and each have their own little silos of metrics and goals. Great companies typically have a global vision, and each of the departments work together to develop an integrated strategy to deliver the vision and, more specifically, yearly goals. Each department outlines initiatives that have positive and negative impacts to budgets. They eventually get approval and proceed to execute. But what are the goals they are executing against? The goals that relate only to each department. The hope is, magically, the sum of the parts will add up to corporate goals. So Marketing starts executing on their acquisition and loyalty strategies. Sales works on their acquisition goals. Product may lead the pack or follow Marketing and Sales lead. And Customer Service takes all the flow down and tries to deliver something that more often than not, looks like adequate to good customer service.

This methodology has been in place for more than 100 years, so it obviously works well. And I am just some poor customer service blogging schmuck from Massachusetts. But why do we align this way? Why do we accept it? Skill set? Competencies? Scalability? Mentorship? Obviously, it is not to deliver a common goal. Maybe it is time to realign (yes, before the apocalypse of 2012). What if we flipped everything on its side, and aligned by organizational goals? (horizontal mambo baby!)

R & R Department (Retention and Referral)

This department is purely focused on keeping customers and making it easy for them to recommend your product, service or brand. If in some parallel universe someone asked you to deliver on goals, as stated above, would you really align by historical standards? Probably not, you might organize as follows:

Marketing:

  • Focused on maintaining communication and relationships with current customers
  • Developing loyalty programs
  • Incentives to deliver referrals
  • Communications to improve Average Revenue Per Unit or Customer
  • Communicating and partnering with other R & R areas to act as 1 unit

Product:

  • Delivering solutions to know bugs, enhancements and issues
  • End recipient of Voice of the Customer (VoC) program
  • Communicating and partnering with other R & R areas to act as 1 unit

Customer Service:

  • Act as the primary point of contact for customers to interact with the organization
  • Execute on retention, loyalty and referral strategies
  • Serve the customer
  • Cross sell value
  • Community Management
  • Be the primary internal resource to additions to the Voice of the Customer program

Sales:

  • Accountable for established relationship management, specifically in B2B sales

Acquisition Department

The Acquisition Department is purely focused on the acquisition of new customers. This department doesn’t look too much different than today, since acquisition for some odd reason typically has priority over Retention and Average Revenue Per Customer – even though 5 billion studies prove it cost considerably less to retain a customer than to acquire.

Actually, I don’t need to go over the following areas again. Just take what they do today, and remove the stated above responsibilities.

Broader infrastructure departments (IT, HR, G&A, etc…) would continue with Business As Usual, however they may want to align their resources to specific departments (R&R, Acquisition & General)

Aftermath

Now because you have “dis”organized, you will need to fill the potential gaps in skill set and competency development, leveraging scale and competing resources. Circle of Excellence teams can provide the forums for both the skill development and communication. In my own humble opinion, I would rather matrix these responsibilities than to matrix goals.

There are a lot of ways we work that exist only because that is how it’s been done for 100 years or 10 years (don’t get me started today on Net Promoter Scoring), but that doesn’t mean we need to continue or not try different ways to get things done. Even something as predictable as how an organization is aligned should be subject to questioning and asking the question of why do we do this?

Is anyone actually organized this way?

What are the other possibilities with this scenario?

Am I a little crazy?

Image credit: Warner Bros.