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Archive for June, 2009

I previously wrote in an earlier post evidence showing that word of mouth behaviors from customers are on the rise. You may or may not know this about me, but before I came to NGF, I worked for Enterprise Rent-a-Car. At Enterprise our culture was built around what they called ESQI (Enterprise Service Quality Index). Enterprise’s use of ESQI is cited extensively by Reichheld in “The Ultimate Question.”

Since I had been in the business, I viewed the Youtube video below with great interest. The video shows 20-30 customers waiting at an auto rental counter at the Fort Lauderdale airport. The customers are then abandoned by Hertz as their only employee on duty leaves the counter and closes up for the night. Needless to say, Hertz that night not only created 20-30 detractors, but the additional detractor who had the video camera and posted this video on Youtube. It has been viewed over 2,900 times since January.  Based on NGF research we know that 98% of negative referrals will convert to a lost customer. Therefore this video has likely cost Hertz close to 3,000 customers.

With all of the vehicles available today for customers to spread word of mouth referrals (Youtube, Facebook, LinkedIn, MySpace, Twitter, Tripadvisor, World Golf Reviews, ForeLinksters, Bomb Squad Golf, GolfReview, GolfWRX, Greenskeeper, etc.) marketers need to accept that this is today’s marketing model and it’s not going back.

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Thank You!!!

I would like to thank all of my loyal readers who have been reading, visiting and passing along my blog. I have just made my 10th post since starting this blog and I have already had over 1,000 viewers!!!

Bottom line is if you have enjoyed the first 10 posts on Driving Growth through Customer Loyalty is to keep reading and tell your friends!

Thank you!!!
Ben

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Culture – Executives usually spend little if any time focusing on the asset of their corporate culture. Think about your organization, how much would it be worth if your employees were another 10%, 20% or 50% more effective? I recently read a couple of interesting stories in the NY Times about the corporate cultures Microsoft & Google are pursuing.

In the Times article “Google Searches for Staffing Answers” Google discusses a new algorithm deployed to identify which of its employees are most likely to quit. Google had been one of the most attractive companies to work for given its startup atmosphere, stock options that made many employees terrifically wealthy and employee perks like afternoon tea, and an annual ski trip. But the luster of working for Google has started to fade and key employees have started to defect to other companies. So Google has deployed an algorithm to “get inside people’s heads even before they know they might leave” according to the company’s human resources manager.

The high staff turnover at Google could definitely be a red flag that the employees there are not engaged. Google clearly recognizes the importance of their employees and by investing in processes to measure employee engagement could be a key weapon for Google to combat the potential problem of disengaged employees.

Microsoft on the other hand, has taken a different approach to their corporate culture. In a recent interview with Microsoft’s CEO, Steve Ballmer is asked “Fill in the blank. You want the culture of your company to be more _____?

Ballmer’s answer was “Efficient. The right word is efficient. That’s the direction that every business leader is steering their company culture toward right now. Given the current economic climate and the uncertainty about how long the recession will last, this is a time when organizations need to do more with less, and Microsoft is no exception. We’ve made good progress, but for a company that has grown every year for more than 30 years, learning how to operate under more constrained circumstances is not always that easy.”

My Take: I could not imagine how awful I would feel if I was employed by a company who built their entire corporate culture around efficiency? Granted, I consider myself an exceptionally efficient person, but having a personal trait of efficiency is extremely different than defining efficiency as the key building block of your corporate culture. How would the work environment be if the most critical factor that all employees were evaluated on was efficiency? The answer is terrible.

Think about it, if you are a technical support representative, you may be more concerned with getting each customer off the phone as quickly as possible so that you are meeting your efficiency quota, regardless of the fact that you may or may not have fixed the customer’s problem. From the customer’s perspective, the support staff is trying to handle as many inbound phone calls as possible per hour, regardless of if the staff actually fixed your problem.

Clearly we are facing an economic tsunami, one of which we haven’t seen for 80 years and there are pressures on corporations to do more with less. But creating a corporate culture of efficiency could be one of the greatest mistakes Microsoft ever makes, as they will burn their staff and their customers in the process. I think Steve Ballmer needs to spend some time on understanding the economic components of customer loyalty. He might be well served by calling Rick Wagoner (former CEO of GM) or Lee Iacocca (former CEO of Chrysler who just lost his pension and company car). The American auto manufacturers have spent the last thirty years with a corporate culture not focused on their customers and look where that has gotten GM and Chrysler… bankruptcy.

One of the best ways to manage your corporate culture asset is to track employee goodwill through a Voice of the Employee program. If this is of interest to your organization, contact me at bfowler@ngf.org or by calling me directly at 561-354-1628.

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Intuit has been a very active user of the Net Promoter methodology. In his book, “The Ultimate Question,” Fred Reichheld wrote extensively about how Intuit founder Scott Cook was desperate to stop the slippery slope the company was going down in financial performance. Cook championed deployment of a Voice of Customer System using the Net Promoter Question for Intuit in 2003. Since that time, the discipline of Net Promoter has transformed Intuit.

At a recent conference, Intuit’s CEO, Brad Smith, shared his insights on the role that their Voice of Customer system plays in optimizing their operations. Smith’s initial statements were very telling:

“Net Promoter is core to the company… it’s part of who I am as a leader.” Smith also said that “81% of sales are directly attributable to word of mouth.”

Below are the main lessons Smith told the conference that Intuit learned on its Net Promoter journey.

1) Leaders Must Chart the Course
He discussed “True North” as the direction towards customer experience that everyone in the company shares. They used customer feedback to rapidly change the Turbo Tax product, and they modified more than 90% of the code during the tax season.

My take: Intuit executives are committed to a customer focused culture.

2) Delighting Customers Makes Employees’ Hearts Beat Faster
Employees need to hear customer feedback, whether they’re complaints or applause. Without employees hearing feedback is like giving a show day after day in an empty theater.

My Take: Smith feels that customer feedback is critical to their business operations.

3) Innovation Fuels Customer Delight
To empower employees to unleash ideas, 10% of employees’ time is “unstructured” and meant for finding ways to improve the customer experience. They’ve created an online “brainstorm” tool to facilitate idea sharing across the company.

He suggests that you need to question long-held beliefs, and gave several examples of ideas from Gen Y employees. One of those ideas was to put the live support community inside of Turbo Tax. It turns out that 40% of the questions customers had were being answered by other customers.

4) The company created Intuit Labs to facilitate innovation.
One great example was a problem with Intuit’s IVR (the menu of options customers hear when they call). Customers were getting incorrectly routed 40% of the time. Since reprogramming took 10 days, they couldn’t try a lot of things in the normal way. So one engineer said “let’s do this the old fashioned way by having people answer the phones and speak the menu.” By trial and error, they found a menu structure that worked before reprogramming the IVR.

My Take: Smith is committed to developing innovative ways to continually delight customers.

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