NPS strengths, weaknesses & its future with Maurice FitzGerald – E36 – FIRST HALF

Released on: 22. August 2021

Link to the second half of this discussion – https://www.cxgoalkeeper.com/MauriceFitzGerald2

CX Goalkeeper with Maurice FitzGerald 1st half – S1E36 is about NPS strengths, weaknesses and its future Customer Experience Goals with the CX Goalkeeper

The CX Goalkeeper had a smart discussion with Maurice FitzGerald

LinkedIn Headline: Editor in Chief – Content – OCX Cognition

Editor in Chief – Content, at OCX cognition. VP Customer Experience HP Software (retired). Former manager of the 23,000-member Net Promoter System (NPS) Forum on LinkedIn. Helping companies to improve customer experience and their methods of developing and implementing business strategy. Achieving this by coaching, speaking, blogging and writing.

You will learn:

  • The mismatch between inside-out and outside-in view based on Maurice experience
  • NPS is not dead
  • NPS is a generally accepted metric
  • The strengths of NPS and related weaknesses
  • The right 3 questions to ask to get valuable feedback
  • What really “action” mean

… and much more

Link to the second half of this discussion – https://www.cxgoalkeeper.com/MauriceFitzGerald2

How to contact Maurice:

Maurice’s Books: https://www.amazon.com/-/de/Maurice-FitzGerald/e/B06XSH2BG6/

Maurice’s golden nugget:

Doing CX research without already knowing that you will get the resources, the people, and the money that you need to implement related improvements is a waste of time. It’s damaging! It gives the impression to customers that you don’t care about their opinion.

Doing CX research without already knowing that you will get the resources (people & money) you need to implement related improvements is a waste of time. It gives the impression to customers that you don’t care about them. @customerstrateg on the CX Goalkeeper Podcast

Thank you Maurice!

#cx #customerexperience #loyalty #cxgoalkeeper #nps

#customerexperience #leadership #cxgoalkeeper #cxtransformation #podcast

Transcription:

Gregorio Uglioni 0:02
Ladies and gentleman a great pleasure to have you on my show. In this case, a short introduction from my side Gregorio Uglioni, the host CX Goalkeeper. In this episode and the next one I will discuss with Maurice FitzGerald about NPS. This is not the usual discussion high level, this is really in depth discussion about strength, weakness and its future, and therefore, I decided to split it in two different episodes. I hope that you will enjoy them.

Ladies and gentleman today, some really big, big pleasure. I’ve Maurice FitzGerald with me, Hi Maurice, how are you?

Maurice FitzGerald 0:39
Hey, Gregorio, Fantastic. Great to be with you, even with your football background after Italy, beating Switzerland. But you’re half Swiss, so you must feel good and bad.

Gregorio Uglioni 0:50
Exactly. But in this moment, I am feeling well, because I can speak with you really a great, great expert on customer experience. And I wants to say I’m really sorry that it’s not a golf pitch for you, I think it would fit a bit better to your hobby.

Maurice FitzGerald 1:07
It’s a question of age. Yes.

Gregorio Uglioni 1:11
Maurice as usual, I start all my podcasts on my webcast with the same question. And the question is, could you please introduce yourself?

Maurice FitzGerald 1:21
Sure, I’ve, I suppose everyone thinks their lives was a bit complicated in in different ways. As you know, when you had Micheal Brant, recently, his time in Japan was very formative for him and so on. I was born in Ireland, my parents were both academics, they when I was nine years old, they decided to develop their career in the United States, we moved to Seattle. I finished high school and went to university as an industrial engineer in Ireland. But I still had a green card. And at the time, I had a mentor after doing an internship with ici and he said, You should join our fast growth industry because that’s where the greatest promotion opportunities always are. And we looked at the list. And for him, the fastest growing one was actually gets fired Wrangler Jeans in the clothing industry, before clothing and clothing was massively offshored. And I worked with them at the start in Georgia and North Carolina, Ireland for 18 months, France for four years briefly in Italy and Spain, 18 months in Scotland, before seeing an ad in the Sunday Times that described exactly the warehouse or the design and automation job that I was doing with Wrangler, but for Digital Equipment Corporation for double the pay in Holland, because clothing industry is extremely cost centric. And at the time, the high tech wasn’t. And I went through and stayed with digital through merging with Compaq through merging with HP had had a couple of memorable customer experience. Experiences, finished my career with hp. I’d been on the European leadership team for quite a while and joined the corporate software leadership team, first as Chief of Staff then head of customer experience, which reported directly to the division leader who reported to the CEO Mac Whitman at the time. And that stuff was all fun, but I want to pick out what was my big breakthrough customer experience event. And that was while I was living in Paris. And we that vision of wrangler I was in was responsible for the Benelux France and Italy. And we, my boss was a person who could legitimately claim to be a co inventor of stone washing as a way of washing jeans. And he was very interested in what it was that the resellers, the stores boutiques at the time, we were avoiding supermarkets and big chains, what they thought of all of this, and what they wanted us to improve. And I said fine, I’ll go out with a salesperson. And I’ll ask the most important ones just give me a list. And I’ve because I was an engineer I wasn’t structurally it was matrix. I was reporting to a Corporate Engineering Manager. And he was extremely negative about this. His view was we already know what the boutiques and the customers want. They want the rivets to see They attach, they want the stitching to be strong, they want the jeans to last a long time. They want different things for their shirts, they want different things for the jackets and so on. And but it was all very technical, very strength and so on. And they said, just don’t do this. And in a while a tendency I have that continued throughout my career, I decided to do it anyway. And went in with open questions to these people and just said, no, what could we do better. And the list that they had had nothing in common with what my corporate boss had. And it was also really different from what the division manager to my reported locally was, was saying, what they were saying was things like, Well, if you’re going to tell us that you’re going to deliver on the Thursday morning, it has to be Thursday morning, because I’ve arranged for my family or my friends to come over and unload the truck and put all the stuff on the shelves. I said put, don’t you care of the deliveries are incorrect. And he said, No, what really matters to me is to have stuff on the shelves for the weekend. If it’s wrong, and I’ve not, and I’ve sold it time, if I was wrong, and I’ve not been able to sell it, I’ll send it back to you on Monday.

And it was a list of things like this, none of which were expected. And what that taught me was the well, it just taught me that you if you haven’t asked customers what it is they want and what what they want you to improve. You don’t know. And you’re gonna get surprises. And I found that to be absolutely through true throughout my career in the different companies. You can’t tell without asking. Now, technology changes that scenario over time, and there are some at least partial answers that you can get without asking customers, but I imagined we’ll talk about that. I was given the the opportunity to retire back in 2016. And I did I retired early. And well, I decided that I would write a few books and that that would empty my brain. And I wrote books on customer experience strategy on net promoter system on saving costs without screwing up the customers. And unfortunately, or unfortunately, that didn’t let me empty my mind and just go spend my life no longer thinking about that stuff. Because to my surprise, the book sold well continued to sell well, then I get asked to do all sorts of things like speak to people on a podcast and and I enjoy that. And I still do what I would call professional stuff that I think is fun. And as distinct from that, I think is necessarily high impact or whatever. It’s just things that I like doing like speaking to you.

Gregorio Uglioni 8:23
Thank you very much for this. Great pleasure to have you on this podcast. And allow me to say that you forgot your newsletter, because this is an outstanding newsletter, I am really looking to get it and to read it because it’s really full of insights. And sorry, it’s not really something fluffy, but it’s real stuff.

Maurice FitzGerald 8:50
Correct. Like I enjoyed that’s one of the things I enjoyed doing. I was doing it for my own website for four years. And then I sort of put it my frozen for a while and now LinkedIn has a team, they invite you to do newsletters you can’t just spontaneously decided and well in business strategies like in my own business strategy in general, you win by either being better than your competitors or being different. And my observation of every other newsletter that I receive on LinkedIn is they’re all blog posts. And as I said, Okay, well, I can’t claim that I can write better than these people. But I’m going to be different. I’m not going to do a blog post I’m going to do is shoot a series of short items of my own and highlighting other people’s things. And that’s, yeah, I’ve been really surprised how quickly that’s growing. I’ve only done I do it every second Monday. I’ve done three so far. And I’ll certainly try it for six months. See, do I continue to enjoy writing and sharing the the stuff that I, that I see that I find interesting that other people right

Gregorio Uglioni 10:10
there now it’s a real time feedback, please, please continue after the six months because it’s really full of, in my words gold nuggets that seems professionals can use leverage and also share with others. Right? Thank you more realize

Maurice FitzGerald 10:26
Sorry, I’ve got to quit my email program that keeps pinging. So I’ve just quit it.

Gregorio Uglioni 10:33
No problem. If I have you, let’s say on the line or on the show, then I need to ask a bit out of the box questions and not the standard questions about customer experience. And therefore, please allow me to ask the first first question, is NPS really dead?

Maurice FitzGerald 10:55
One of the entertaining things you can do is do an internet Google search on that term. And you’ll certainly find plenty of people who think that it is or that it should be. And yeah. I remember I was introduced, interviewed, I don’t know 18 months ago about by a woman from the Wall Street Journal, it was writing on the topic. And but her observation was the opposite, which was that more and more companies were including NPS numbers in their annual reports and, and that type of thing. I think and there’s also a recent sort of Gartner Forrester article saying, predicting a big decline in the use of NPS, I don’t think it certainly isn’t happening, I don’t believe it will happen. And it’s for just one reason. And that is that NPS is far easier to communicate than any of the other metrics. That has advantages and disadvantages. But if you walk into a room, and you say, Okay, I’m measuring CSAT, they are all sat the overall satisfaction metric, and 73% of our customers are satisfied. Well, one of the issues is that in CSAT, there isn’t any standard definition for what proportion of the customers are satisfied. And if you’re measuring on the most common one to five scale. Some people consider everybody who isn’t the one, the lowest score to be satisfied, and others consider only the top two box to be to be satisfied. So you have to explain it every time. And you have to put up potentially with somebody who’s being painful in the room, disagreeing with your explanation of it. And that’s terribly time wasting. And with the NPS, you don’t have to do that. Just about everybody you’ll encounter in business has a basic conception of detractors, passives. And promoters. They may think the metric isn’t very valid, they may have all sorts of opinions, but you don’t have to explain what it is. I guess that’s really the the main point about that, and it’s really the only reason that I think it won’t go away. Yeah, I mean, the opposite extreme. And people that say, IP sauce, came up with a wallet allocation rule. You’ll see people come up with all those the Temkin Experience Index. There’s even the American Customer Satisfaction Index, which people believe they know what these things are. But once it’s an aggregate thing, which you’re calculating as a result of a weighted or an unweighted average of multiple questions, then every time you speak to a new audience, you have to explain what the metric is again, and deal with somebody who’s got their PhD in statistics disagreeing with your methodology and putting everybody else in the room to sleep, right? And so yes, compound metrics can be better predictor of better predictors of customer retention, churn, and so on and so on, and even revenue trends, but they’re really difficult to communicate. So, NPs will stay and stay with us because of its simplicity.

Gregorio Uglioni 14:55
And I think that’s, that’s that’s what I’m also sharing as In India, it’s extremely easy to communicate. And also in the boardrooms, were not always the customer as the first place. They start understanding what the NPS is, they start understanding that NPS is important that customer centricity is important. And therefore it I think it’s something good to start, but it’s only one metric. And also to challenge a bit what you were saying, I think there are quite a lot of different methodologies, how to measure that, how to put that Eastern Standard or one one standard methodology to for that,

Maurice FitzGerald 15:36
I have to give a kind of nuanced answer on this. Because yes, there is there is a reference methodology and how can I say almost nobody uses it. NPS is a registered service mark, I think it is of Fred Reichheld being an SAT metrics. So kind of, by definition, they’re the custodians of what it means. And they do each and act even distinguish a little bit between what Fred says, and Ben says, though, they’re almost identical. And but they do have some differences between what they say which are relatively minor. Now, the current thing that is a standard for promoted by Bain for NPs, not NPS itself, nobody disagrees is on what the standard is for the measurement, ideally, on a zero to 10 scale, zero to six are detractors. Seven eight surpasses nines and 10s are promoters. And Fred and Rob and this hat metrics, people have been really explicit that it doesn’t matter much, if you decide that you don’t want to do it on zero to 10, that you want to do it on a one to five scale. But if you do that don’t change just be consistent. And the the, at HP, we moved at one point from a zero, a one to five scale to a zero to 10, on the recommendation question, which we’ve been asking, answering, using for years and years, even before we introduced the NPS as the standard across the company as the single metric. And zero to 10 does give you slightly higher results. In some cultures, notably, for example, in in Japan, people can be very reluctant to give you the very top score, and they, they’re more likely to give you a nine, if you like and not want to give you a 10. Whereas on a one to five scale. Even if they love you, they may say that there’s still a few things, they should improve. So we’re going to give a four, and so on. And so the scale, the basic score calculation is fine. But of course, you learn nothing from you don’t learn anything about what to do from the score. You learn to you learn that from additional questions. The current standard for the additional questions is not the first question. Why not? Why did you give us the score? Not? Why did you do it? Because based on your latest interactions with us, just the word why. And the way Rob Mark explains that is he says, that’s the one that translates best. And then when you do it, and you’re in a multinational, if you’re going to do it in 70 languages, just doing that is the simplest approach. And it’s not gonna get screwed up as you go multinational. But over the years that discovered which makes some sense, that if you ask why to detractors, they’ll tell you what they want to, they want you to improve. passives will tell you why they don’t care too much about you. promoters, will tell you Oh, yeah, because you know, this, your salesperson is wonderful, and so on. But most of them won’t tell you what you should improve. And actually, what you want from the promoters and from everybody is to find out, what is it that we can do better? So there is a third question on the standard, which is what can we do better? Or what should we do better? And very, very, very few companies use that standard. And oddly, and I’ve had multiple cases of this, someone say, oh, but adding three questions is too complicated. And then you look at what they’ve actually done and they’ve got 50 questions.

Originally, the technology didn’t exist to do excellent natural language processing on the answers. And people were concerned that just reading text answers would produce excessive bias. And maybe that’s maybe that’s the case. The, I’d say the main difference with set metrics and nice set metrics is the company name and in the training is, would place quite an emphasis on driver questions in in that training. And I didn’t use to support that as a prospective I do now, for reasons that will become clear. And these are just trying to determine which things it is, at a statistical level can contribute the most to the people becoming detractors, promoters, or are passives. And so it’s asking a whole series of additional questions. The reason that I didn’t used to like it is that that deteriorated into a methodology to produce internal scorecards that weren’t used to drive anything. So like, if you had 20 functions in a company and say, Wow, let’s put into questions for each function. And even ones that didn’t necessarily have any contact with the people who were answering the surveys. And it gave the wrong impression that everything was equally important. So that’s the band perspective is that the driver questions aren’t generally useful, which is correct, I believe they’re periodically useful. That’s because the things that are important can change over time,

Gregorio Uglioni 22:04
and expectation management. Because if you continuously ask your customer what we can improve, and you cannot cope with the change, then it’s

Maurice FitzGerald 22:13
true. Yeah. And the risk with driver questions is that you’ll ask the questions you want to ask as distinct from giving the customer the opportunity to say what, what they want to say,

Gregorio Uglioni 22:24
exactly. I think the bias on surveys could be the one of the next podcast. But now, let’s say on the NPS, and what you’re mentioning, I think it’s really key. As a matter of fact, that, let’s say, in general, oil companies are sending out surveys. And we are not answering all the surveys because we are a bit skeptical about what we lead with the service and so on. Let’s say I say number perhaps is the wrong one. But 15 20% of the customer answer to these questions, if there are two, three or 10s. But it means then 80 to 90% of the customer are not answering what happens with this customer or what.

Maurice FitzGerald 23:10
And certainly, if we’re going to talk about the top three defects that would be right in that it certainly be in the top three, that it encourages. And I personally have encouraged this encourages the taking of action exclusively with people who have responded. So but then what about all of the risks? And we know there’s lots of research that shows that survey response rates have been declining over the years, particularly in consumer businesses in in b2b, particularly with large customers, it’s relatively easy to get high response rates, then you just have the question of are you actually talking to the correct person and people within a large company? So an example occurs to me, which is a German multinational e commerce company that I won’t name because I’m not, I don’t remember whether I’m allowed to name it. And with about a 20% response rate to a survey that was that was taken or initiated by you clicking on the order confirmation button, so we can in general surveys, survey research NPS research based on transactions isn’t useful. works best at the level of an overall brand or an overall product or service. Ecommerce for that would probably be an exception because if you order from Amazon or whoever, two thirds of the experience you’ve got is trying to discover the product evaluates it and place the order and the part after you’ve received it. And maybe the returns process if you need to return something is the other third. So you can get valid and good predictive data. And in that ecommerce company, NPs was highly predictive of future purchases, the amounts and so on. And let’s suppose that the survey shows that people who have been delivered more than two days later than expected are likely to be detractors. So if you’re only taking actions to try and recover those customers, who you’ve found out, are detractors because they told you in the survey, that seems really defective as a methodology, because in your operational data, you already know 100% of the customers that you’ve delivered more than two days late. So why is it? That almost no, I’m gonna take the risk of saying, no company? Does this meaning, take your most significant contributors to people being detractors and proactively close the loop with them? There’s Oh, my God, we know we’re about to even perhaps before they’ve been delivered, we know that we’re about to get delivered this person more than two days late. So why wait those two days? Why not send them an email or whatever? And say, No, we’re terribly sorry. And, and then you’re doing the closed loop and detractor recovery before it even happens. And by definition, you can do that from operational data. And you can’t do it from survey data. Because by definition, it’s after the fact. Right? Exactly. And if you’re able to deal with these things proactively, then why would you not do it? Yeah, I think that’s what you were getting at with, with this, right? It’s, it’s how do you the big defect is that it drives a behavior of not taking action with the people who haven’t responded to surveys.

Gregorio Uglioni 27:33
And I think you’re mentioned mentioned in one, one of the weaknesses is we can go to the next tool that that you mentioned, one, one comment from my side exactly what you’re saying it’s not enough to close the loop with your detractors. Because if I know that you are the type of detractor because something happened, I should sort proactively solve this issue for all the customer so that I can avoid adding additional detractors that are deteriorating my score.

Maurice FitzGerald 28:01
Absolutely. And that, of course, is something that we’ll get into in a moment when we talk about futures, because there was no technology to do this 10 years ago, and there is now and to help to do that without a lot of effort.

Gregorio Uglioni 28:20
We came to the end of the first half of this discussion if you want to get additional value, understanding the other weaknesses, and also the future about NPS please stay tuned for next episode together with Maurice.

If you enjoyed this episode, please share that word of mouth. Subscribe it, share it until the next episode. Please don’t forget, we are not in a b2b or b2c business. We are in a human to human environment. Thank you

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