NPS strengths, weaknesses & its future with Maurice FitzGerald – E37 – SECOND HALF

Released on: 29. August 2021

Link to the First Half of this Discussion – https://www.cxgoalkeeper.com/MauriceFitzGerald1

CX Goalkeeper & Maurice FitzGerald 2st Half – S1E37 is about NPS strengths, weaknesses & 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:

  • How to leverage scorecards properly
  • How to cope with the missing link between customer feedback and corporate strategy
  • How to structure the reporting line for CX managers
  • The impact of technology on surveys

… and much more

Link to the First Half of this Discussion – https://www.cxgoalkeeper.com/MauriceFitzGerald1

His book suggestions:

  • Ottolenghi Simple A Cookbook; Ottolenghi
  • The ultimate question by Fred Reichheld
  • Answering the Ultimate Question: How Net Promoter Can Transform Your Business; R. Owen, L. Brooks

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!

#customerexperience #leadership #NPS #cxgoalkeeper #cxstartegy

#customerexperience #leadership #cxgoalkeeper #cxtransformation #podcast

Transcription:

Gregorio Uglioni 0:05
Ladies and gentlemen, welcome back to the CX goalkeeper podcast. My name is Gregorio Uglioni. I am your host. And as promised and I am publishing the second half of the discussion together with Maurice FitzGerald, it’s a great pleasure to share this second part with you because it’s full of insight, I hope that you will enjoy this session. Thank you.

Perhaps are there other weaknesses that you want to mention on the system?

Maurice FitzGerald 0:32
Yes, and this has a risk of offending a lot of people. But that’s life. I don’t mind much. There’s a problem, which I believe I know the root cause of and people who are watching this, please feel free to disagree and write to us and tell tell me, I’m completely wrong about this. A substantial part of the NPS, where I’m going to say most of it, in general, no action is taken on the basis of the of customer experience research. It’s published as scorecards, people may be evaluated on the results of those scorecards for their annual reviews. But no new projects are defined, there are no strategic initiatives. And, and nothing enters into the corporate strategy because of it. And the I believe the root cause of this is that the majority of customer experience leaders report to the marketing leader. And the marketing leaders are measured on usually on two things, demand generation, and sales support. And what I’ve just described as the the gap and the need, determining the top two or three strategic initiatives that need to come out of what we’ve found, the marketing leader isn’t measured on that, and they don’t care. So the work of the CX leader gets treated as being interesting and entertaining market research. And it maybe we should really look at that seriously someday. Okay, that might have a note of cynicism in it, which isn’t intentional, but it is the reality, my preference, if the head of the of customer experience can’t report to the CEO, for some reason, reporting it to the chief of staff would be good, because the Chief of Staff usually sets the management agendas. And you can be sure that you’ll be in all of the communications, if you can’t report to the head of the business unit or division, then reporting to sales would probably be my top choice. Because let’s face it, if if customer experience work is successful, we’ll retain more customers, it’ll be easier to upsell, it’ll be easier to cross sell, meaning the win rates improve, and who’s measured on that? The sales leader. So there, they’ve got to be interested in something whose explicit purpose is to improve the the financial metrics on which the sales leader is gold.

Gregorio Uglioni 3:33
And I think what you’re saying it makes full sense, our take, explaining that I see more the role of customer experience managers, or you name it, they have quite a lot of different names, as in a matrix organization, because they need to support marketing, they need to support sales, they need to support customer service, and they are there to support and help. And then if you can start having shared targets, then it’s easier to continue this customer centric transformation. Therefore, I think what you’re saying it’s, it really makes sense.

Maurice FitzGerald 4:06
Right? And when I, at one point, in HP, we hired the former head of Microsoft, North America to come in and first I reported to him at a in a software business unit. And then he was promoted to be the overall software manager Robert Young John’s reporting to the CEO and I was he took me with him. And he was stunned that an HP we measured that we consider that 92% For example, was wasn’t acceptable. Renewal number, and he was used in Microsoft to 100% being something for which you would almost be fired. Because our metric tended to be by volume, meaning if you have 100 custom was at one point and then a year later, you’ve got 92, that’s fine. But it wasn’t financial, until he changed it, right. And what you want is, if you’re earning $100, from a collection of customers at one end of at one point, then 12 months later, you want to be earning more than $100 from the same group, even if some of them have left, that that’s been over compensated for by upselling, and cross selling to the ones who have stayed. And that’s just a much more satisfactory measurement of what customer retention means.

Gregorio Uglioni 5:38
Exactly. But at the end, I think this is extremely relevant. And it’s not only about this NPS number, or CSAT, or something like that. But companies need to be able to link these numbers, these figures, together with relevant financial figures, because at the end, we are in the business to make business not to F Epicon, or something like that. You need to translate that into reduced costs, additional revenues, additional acquisition, and all these key metrics that are relevant.

Maurice FitzGerald 6:13
Yeah, I’ll just make the remark. That’s the, which has been misinterpreted by some important researchers and research that published as well. There are industries in which none of the customer satisfaction metrics will predict revenue. And depending on what country you’re listening in, I would pick retail gas stations or retail petrol stations is a great example. Their revenue is primarily dependent on the price of a drop of a barrel of oil. And yes, maybe being unpleasant with them and not doing what if they actually come in to pay, I mean, I like this book that these guys have written the human brand, that in there, they talk about the warmth and competence model. Meaning that what you expect from a retail transaction is especially is that the people should have basic competence that you’re able to do whatever, you’re able to execute the transaction. And then provided you can execute the transaction. Having the person smile or exhibit some level of human warmth isn’t as important. I know, you’ve interviewed Peter Durrington, at least twice. This is going down the same type of path that he goes down with the importance of empathy. But empathy doesn’t count if you’re not competent with all due respect. Yeah, yeah, I’m sorry, I wasn’t able to do whatever it is at all. But I smiled, then you just come across as an idiot?

Gregorio Uglioni 7:58
No, I fully understand what you’re saying. And it makes sense. And interrupts the question about the future? How do you see the future of NPS and see it’s also related to the fact that there are quite a lot of technical technology in place that can be used like AI? And perhaps also a bit again, and bit strange question, do we need to really to measure onto or to ask the customer? If we have all this AI in this technology in place? Well, I

Maurice FitzGerald 8:30
think you’ve picked, I think I’d just like to make two points on that. And your you start at the most important one. So at the risk of being radical, I don’t think we need to survey customers at all. Okay, maybe that’s a bit too radical, I’d say perhaps we need to survey them once a year, for a brief period to end a reasonable sample to make certain that the new technology solutions that we’ve implemented, are a reasonably good representation of what we would find out from a well executed survey. But it’s the same. It’s my view is the same on what I expressed around the with the late delivery example. It’s damaging to wait for surveys if you already have the data. And if you’re in a b2b business, and you use Salesforce like so many large companies do, then it’s probable that data from what’s going on in Salesforce is going to tell you more about what how likely a customer is to renew their existing contracts or to upsell or whatever, than anything else. So you’re never gonna get at that. through a survey mechanism, why would you do something maybe, let’s suppose we find out through Salesforce that the salesperson is having less and less contact with the customer, I would suggest that that is quite likely to turn out to be a decent predictor of the customer not renewing five months from now. And whereas serving them after they’ve not renewed is, we don’t have to do that anymore. So what I see as being the replacement for surveys is covering 100%. With AI solutions, that would be doing relatively complex mapping. That would be saying, These are the things that are going on that it will probably mean that this customer is going to be a detractor, a passive or promoter. I still think NPS itself in this kind of predictive NPS model is important because it’s easy to communicate, right. And you can show the trends from a sophisticated AI system in terms of a simple headline number. All right. The catch is that you’ve got to trust that the Euro AI system is capturing the best operational and other metrics that you’ve got in your systems. Who knows, maybe it’s there are things in your financial systems that matter that aren’t even that you’ll pick up that aren’t necessarily to do with customer experience, like maybe you’ll see customers paying their bills later and later, and that be a predictor predictor of them going bankrupt. And maybe you should be working out what you’re going to assign the salesperson to. So maybe nothing you can do about it. And that it’s a waste of time and trying to sell them expensive things if they can’t even pay their bills. So that’s their the defect, of course of these systems is that they don’t capture brand image things. So if your CEO and I can think of names, behaves really badly in public, or while, let’s say just gets accused of sexual harassment or something like that, that’s going to kill you, that has the potential to kill your business. And by definition, a conventional AI system isn’t going to pick it up. I think Peter Darlington and company believed that they can get that type of thing into customer empathy. And I look forward to seeing whether they produce whether he and Jonathan Hawkins and company actually produce the goods on that. In consumer businesses at HP, we were pretty good at scraping social media, and then using text analytics to try and get the emotional level things going on. Out of that, and be predicted from that, but in the and then. So in consumer businesses, there are more solutions. The general quality of text analytics on the market is really poor. There are some exceptions. And I’m choosing not to mention my preferred one here, people who see what I write will easily know my preferred NLP solution based in New Zealand. And

so I believe that AI and machine learning can totally replace survey processes, provided you have maybe once a year occasional calibration of your model to make certain that it hasn’t gone off track in some way. And that it really is doing the best possible job of predicting churn which can predicting it in a on a financial basis? That’s absolutely my my number one, I guess the other one is relatively is related, which is these AI models by the definition of looking at a large number of operational metrics may turn out a scorecard that has 200 items on it. And the casual reader may think that all 200 are equally important. And I don’t know the answer to the following. Somehow we have to develop a compelling method of visually prioritizing these scorecards so that it’s clear of the metrics that actually matter, which are the trends that are worrying and just make those score scorecards more useful in from the day to day management perspective. Make sure that the AI system is also highlighting in a proactive way to the people like perhaps the the person who’s sales responsible for a particular area is going to get a ping if something negative on their phone saying, Ah, you know, this metric is going off track here. And we believe it’s because of this thing that you personally can influence, as distinct from selling, sending a useless message to the same salesperson saying, because our operations people have delivered lead three times in a row. Other than Yes, we’d like you to apologize. That’s not useful from an action perspective, those things should be directed only to the relative operations person if it’s entirely in their control. But yes, I see it being replaced by AI, I see loads and loads of startups including the one I’m helping at the moment, the OCX cognition, people where I’m part of the team on a on a part time basis. And we are having our first successful implementation showing that we can predict churn from Salesforce and operational and financial data reasonably well. And then, I guess the, the next challenge we’re already seeing is indeed, how to communicate this compellingly in a way that encourages people to take the correct actions as quickly as possible, and not confuse them with excessively complicated scorecards. Predictive NPS numbers are part of that solution and keeping that simple communication at the top level. And as an end, here are the top two or three, three things that are driving, that’s quite hard to automate. But we’re getting there. And I’m enjoying watching that and participating in it in it in a very limited way. So I’m not a coder, myself. I have been doing my Python, a machine learning course. But I’m, I’m finding it hard to as many people do that, but I’ll get there. I’m determined to have my Python certificate. So I can claim to people that I know more than I actually do.

Gregorio Uglioni 17:33
And I think this is nice with all your experiences that you already had. You’re still working in customer experience. And you you mentioned it in the discussion. Now we know that a bit it’s Python, that you’re playing golf, that you’re still building also Ikea furniture, how can you ensure to to put everything together to let’s say, satisfaction, because you said that you are retired, it doesn’t make sense to ask work life balance, because you can decide, but what satisfies you in life.

Maurice FitzGerald 18:08
I guess the, at the moment, the top line thing would probably be seeing my daughter’s succeed professionally. I won’t go into what they’re doing. But it’s a feeling that I’m that. And I guess I would say that on behalf of my wife, as well as we, our daughters are 26 and 28 feeling that we’re contributing actively to them being independent, successful, and so on. And well as half Italian person you’ll in in, appreciate the following probably, I’m going to talk about my mama, which is my own mother, I’ve three sisters and a brother. And you have a traditional Irish family, let’s call it from the 50s and early 60s. And my mother was absolutely determined that none of my sisters would ever be financially dependent on a man. And I’ve had the same determination that the our daughters need to be very independent and self sufficient. And or at least have that choice. Right. So that’s a very strong motivator in my life and in my wife’s life. I guess I would close that discussion by saying, I have a strong desire to continuously learn, maybe that’s having had I had academics as parents, the value that they placed on learning then and on behalf of my brother and sisters, they didn’t care what we learned They cared that we learned. I’ve been spending. Since my wife and daughters are vegetarian, I’m not. I’ve been spending huge amounts of time. And I love cooking and my wife doesn’t. I’ve been spending huge amounts of time learning all sorts of new and exotic vegetarian dishes. I recommend Ottolenghi cooking books if you’re want to get into that. And, but especially his book called simple because the last one of his recipes I did took me just over three hours to do. And the time to result ratio wasn’t quite there, as simple ones can all be done in under an hour. Anyway, we’re getting aside but you know, you said you would like me to recommend a book or two, I certainly recommend that. People who haven’t read the basics should. This is my own one. Yes, signed by Fred Reichheld. So that basic things like that, even though you know, the ultimate question 2.0 was written before the technology exists, but understanding the basics matters. Richard Owen and Laura Brooks wrote, answering the ultimate question, which was around implementing this is an excellent piece of things to think to read to I like my own.

Gregorio Uglioni 21:36
they will be all in the shownotes don’t, I will do that, because they are really good, really good, strong books with quite a lot of important insights.

Maurice FitzGerald 21:47
I think the thing that I tried to pick up a lot on the strategy book that I found nobody had concentrated on was the importance of doing partner experience work, meaning if you’re dependent on resellers, or distributors or agents of any type, that you should have a deep understanding of what they want. Think about, well, pick a random example, I’ll pick McDonald’s. Who does McDonald’s sell to mostly around the world, they actually sell to their franchise operators. And the it’s a minor proportion of the of the restaurants are owned by McDonald’s themselves. So it’s critically important to them to know what the franchise operators want. And yet, we never think of that. And this is this B to B to C model. And making sure if you’re in a business to business to consumer model, understanding that your what’s going on in that middle tier is extremely important and doesn’t get talked about much. Very few consumer businesses are direct to consumer.

Gregorio Uglioni 23:01
Yes, that’s That’s true. You are right. Perhaps the two last question. If somebody would like to contact you, what’s the best way?

Maurice FitzGerald 23:11
Oh, you can reach me easily on on LinkedIn. Best professional address is probably the OCX cognition one. So Maurice DOT Fitzgerald at ocxcognition.com. is easy enough to find. And yeah, I welcome interactions, including with people who think you talk rubbish I have changed my mind frequently or improved my reasoning or thinking with people who disagree strongly with me, and there are plenty of them. So I tried to learn from them.

Gregorio Uglioni 23:52
Thank you. And the very last question is Maurice, golden nugget. It’s something that we discussed or something new, that you would like to share with the audience.

Maurice FitzGerald 24:06
Let’s say, I guess I would, I would pick that doing customer experience research. without already knowing that you’re going to have the people the resources, the money that you need to implement improvements based on the research. Not Alone. Is it a waste of time, it’s damaging. Meaning it gives the correct impression to customers, that you don’t actually care about their opinions. And so, as a closing anecdote about it, ask yourself how many times when you have received an email requests to take a survey, and you’ve taken the survey how many In the last 100, that you’ve done that, did the company write back to you and say, here’s what we learned from all of the surveys, and here’s what we’re going to improve. And I’m willing to bet that the answer for most people watching or listening to this, and perhaps for you, Gregorio is never. Exactly. And if that’s what you’re going to do, just don’t do it. Please don’t damage our profession. Stop.

Gregorio Uglioni 25:30
Thank you very much Maurice. And as usual and not commented, your golden nugget because it was Maurice’s golden nugget. The last thing I want to say is, thank you very much for your time. And also to the audience. I hope that you enjoyed this discussion as much as did because it was really a great discussion. It was out of the box and it was what I was expecting, and therefore I would like to give you a 10 in my NPS score, and the comment is “perfect”, and I don’t suggest any improvements. Please stay like you are because these are really the great discussions that bring us customer experience professional also forward. Thank you very much more

Maurice FitzGerald 26:10
. Thank you. grazie alle prossima volta.

Gregorio Uglioni 26:15
If you enjoyed this episode, please share the 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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