Millennium Mat has developed a unique culture in which employees make production decisions for their teams and share in the financial benefits of their success. The leaders of these teams are called CEOs and they steer everything from hiring to process. Their employees, whom Millennium calls partners, are expected to bring forth their performance-improving ideas. Companies of all sizes and in all industries could learn a lot from Millennium’s approach, which has propelled its business to almost 40 countries.
Ian Malpass, founder of Millennium Mat, joined me on the podcast to discuss what it takes to forge a culture that’s truly self-directing and self-correcting. You can listen to our conversation on iTunes, Stitcher or through the player below.
Large companies tend to focus on traditional financial forecasts—earnings estimates, sales targets and so forth. After all, it’s how the market measures their value and whether they’re worthy of investment.
The intense pressures to meet these goals can cause some executives to make short-term cuts that can undermine their long-term strategies. Some would argue that we need new gauges of corporate strength. The Net Promoter Score is a very powerful measure, but so is another: customer lifetime value. This measure helps companies identify their most valuable customers and build those relationships.
Peter Fader, a marketing professor at the Wharton School of the University of Pennsylvania, returns to the Net Promoter System Podcast to discuss the importance of measuring customer lifetime value. He recently founded a company called Zodiac that specializes in estimating customer value.
The Net Promoter System’s “outer loop” mechanism supports improvements that go beyond the individual or team.
Its explicit purpose is to prioritize and support the kind of customer-friendly changes that employees and teams can’t make on their own. But there’s an implicit purpose as well. An effective outer loop makes employees feel supported. It gives them a voice in the firm’s priorities. It creates confidence that the company’s priorities support customer centricity—and that leadership is putting its money where its mouth is.
Read more: The Net Promoter System’s Outer Loop
A lot of companies find themselves a situation in which their competitors are increasingly adding value to their products, while they’re struggling to figure out which features and services might move the needle with customers. The leaders of these companies aren’t sure what level of service will capture more of their market—or if they should even focus on service.
It’s the classic “how to play/where to win” question. Companies can’t invest in everything. To succeed, they must distinguish themselves from competitors. Often this means meeting customers’ deepest needs—aspirations they might not even be aware of.
Bain Partner Eric Almquist has spent much of his career researching these questions. In this episode, he discusses the 30 elements of value that draw customers most to a product or service. Companies that fulfill more of these needs have customers who are more loyal.
Does the Net Promoter Score gauge a customer’s broader relationship with a company or just the customer’s most recent experience? Or both? Who should make follow-up calls to customers? I discuss these questions and more in this short episode of the Net Promoter System Podcast.
The goal of the Net Promoter System is to create a culture that encourages employees to bring energy, enthusiasm and creativity to their jobs.
Developing that kind of culture requires inspiring leaders. We’ve all seen those people who seem born to be leaders. They have an uncanny knack for motivating the people around them. They show gratitude and connect with people in authentic ways.
You might chalk it up to charisma or a rare innate gift. While that might be true, it’s possible that they studied their own behavior and learned how to mobilize the best qualities of their personality.
In this episode, I talk to Bain Partner Mark Horwitch, who has been studying what makes a leader inspiring. He says it comes down to 33 qualities. Most of us have some of them, but none of us have all of them. He says that when we know our strengths, we can develop them into true leadership assets.
Learn more: How Leaders Inspire: Cracking the Code
After all, people use their phones for everything. Consumers surveyed by Bain last year said they would miss their phone more than their wallet. Broadband service and Wi-Fi has become a basic need to businesses, and you’ll rarely see a more agitated customer than the one who can’t access a free Wi-Fi network.
However, many are not delivering memorable customer experiences that make people’s lives easier. My latest post on LinkedIn discusses how the telecom industry could benefit from some simplification.
You can read the post here: Simplify Before Your Customers Hang Up
Huddles are short, interactive team meetings, usually 15 to 30 minutes. These regular get-togethers—often daily or weekly—are a critical element of the Net Promoter System.
These meetings might be brief, but they reconnect employees to a company’s core mission. They reinforce their commitment to serve customers better and create more promoters. They also connect the inner loop mechanism to the outer loop and help speed learning.
In this short episode of the Net Promoter System Podcast, I discuss their role in building customer advocacy and engaging employees. You can listen to the episode on iTunes, Stitcher or in the player below.
It’s a question just about every manager wrestles with: How do I get my employees to do what I want them to do? How do I get them to be more empathetic to customers? To take feedback and make meaningful changes?
Obviously, fair pay is essential, but there’s far more to it. After all, motivating people requires tapping into deep emotional needs for autonomy, purpose and affiliation.
I had the good fortune to sit down with Daniel Pink, author of the 2011 best-seller Drive: The Surprising Truth About What Motivates Us. In the book, Dan breaks down the scientific research on motivation and explains why simple carrot-and-stick approaches rarely result in the behaviors that companies want. I cite his work all the time with clients.
Recommended reading: Your Best Employees Work for Love, Not Money
The Net Promoter Score is a simple measure, but building a process and culture that results in deep customer relationships can be very complex. In this episode, I answer listeners’ questions on everything from competitive benchmarks to best practices for following up with customers.
Do you have a Net Promoter question? Feel free to tweet it to me to @rgmarkey on Twitter or write it in the comments field below.
The Net Promoter System has a mechanism called the inner loop that helps employees of all kinds get real-time feedback directly from customers. The feedback is usually positive—most employees do their job pretty well—so people typically become more engaged and enthusiastic. The occasional criticism or complaint about a specific interaction or decision can help individual employees and the organization learn to do their jobs better.
The challenge is to set up the inner loop in the right way, so that it reinforces learning rather than undermining it.
The best companies—loyalty leaders that grow profitably—do things to teach their employees to do their jobs better. In fact, the Net Promoter System was designed to help companies facilitate and accelerate individual learning. The system’s inner loop and huddle play important roles in encouraging feedback and coaching so that employees can serve customers better and contribute to the mission of their organizations.
Some people think that developing deep expertise simply requires time and practice, but there’s more to it.
Psychologist Anders Ericsson, coauthor of the new book Peak: Secrets from the New Science of Expertise, and his team have deconstructed what it takes to become a true expert in a variety of fields. What they’ve discovered can be applied at any company.
It’s a scenario that we routinely see: A company starts off using the Net Promoter System with great enthusiasm, gets a few quick wins and then hits a wall. The company’s leaders inevitably ask us, “What are we doing wrong?”
I’m asked this question so often that I developed an assessment tool that allows companies to measure their Net Promoter efforts in a straightforward and quantitative way. The premise is simple: We analyzed what Net Promoter leaders do and then worked backward to understand why they achieve stellar results.
It turns out there are a number of best practices that leading Net Promoter companies consistently follow, including having the right leadership at the top, having a reliable way to collect data and enabling employees to understand and share what they’re learning. And the more best practices a company follows, the more it will get out of the system.
If you’re not sure you’re getting the most out of the Net Promoter System, here are five questions to ask:
1. Do you know the factors influencing Net Promoter Scores for different customer segments?
Some customers generate more revenue than others; it’s a fact. But most companies don’t have a solid grasp of loyalty economics. They haven’t calculated the value of creating promoters among their customers. In a recent survey of Net Promoter practitioners, nearly three-quarters of respondents disagreed with the statement, “We have been able to calculate word of mouth and referral economics,” indicating they had not yet connected the scores they were collecting with loyalty economics.
For example, a bank looking just at aggregate Net Promoter Scores might conclude that its average customer hates long teller lines. But without probing further, executives will miss the fact that the bank’s high-value customers take steps to avoid lines—so reducing wait times won’t improve their experience as much as upgrading mobile tools.
2. How are your customer feedback response rates?
Net Promoter Scores are important in the right context, but don’t stop there. The trend in response rates is also important. If they’re starting to fall, it may be an early indicator of customer dissatisfaction. Leading Net Promoter companies also evaluate the mix of respondents, even if their response rates are strong, to ensure they’re getting feedback from the right people.
3. Who is leading my Net Promoter efforts?
At leading Net Promoter companies, the executive who’s running the effort usually reports to the CEO. If that person is more than two levels below the CEO, the company’s Net Promoter System isn’t getting the attention it deserves from leadership. The chain of command, however, isn’t as important as the leader’s ability to influence colleagues.
Some Net Promoter companies go a step further and create a central team or a customer advocacy office to put Net Promoter methods and tools to work.
4. Does your CFO believe in your Net Promoter System?
When you know the Net Promoter Scores for your key customer segments, the logical next step is to use that information to make investment decisions that will help your company grow. But problems can arise when a company’s chief financial officer relies solely on backward-looking financial metrics.
The success of any Net Promoter System requires support from every department and business function, from the very top to the front line. CFOs of top Net Promoter companies treat the system as a predictive tool that allows them to allocate resources in ways that serve customers best. These companies usually have a strong “outer loop,” a Net Promoter System mechanism for making systemic changes that support customers.
5. Can employees explain the Net Promoter System? And why that’s important.
We recently worked with a company that touted its strong commitment to the Net Promoter System. However, when the firm’s executives took our assessment, they realized there were some gaps to address. Even though top and middle managers were fired up about Net Promoter, the front line in one division saw it as just another corporate initiative. And while it was working well in another division, no one was sharing those best practices across the company. This company shifted its focus to training and saw some good results.
I invite you to try Bain’s Net Promoter System Assessment tool. We’ve set the bar high, so please don’t be discouraged if you’re not yet hitting all the marks. Very few companies are there yet.
Over the coming weeks, I will explore in more detail the best practices that the assessment tool measures. You can sign up on the right to receive our blog posts by email, or follow us on Twitter (@NetPromoterSys) for updates.
What qualities and experiences make for a successful chief advocacy officer? Not just anyone will do, regardless of how bright and ambitious he or she may seem to be.
The best CAOs aren’t always the people you might think of first, and they aren’t always working in predictable roles. But one thing is for sure: It’s important to choose someone who has the respect of the organization’s leaders.
In this short episode, I talk about some critical considerations for companies that are choosing a CAO. You can listen to it on iTunes or through the player below.
Learn more: Who Should Run Your Net promoter System?
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