Customer Experience: The Competitive Advantage from Loyal CustomersExecutive Track

Presented by: Phil Sager, Principal, Bain & Company, Inc.

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent

Customer Experience - The Competitive Advantage from Loyal CustomersPhil Sager, Partner | www.netpromotersystem.com

August 3, 2016 – CompTIA ChannelCon 2016

®Net Promoter, Net Promoter score and NPS are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc. and Fred ReichheldNet Promoter System and Promoter Flywheel are service marks of Bain & Company, Inc.

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent. 4

Think of company you like enough to recommend to a friend?

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Think of a recent experience with that company, what was it like to interact with them?

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent. 6

What must have been true inside that company to deliver that experience?

•Senior leaders made visible commitment to making customers a priority?

•They had calculated the economic value of more loyal customers?

•They had a reliable way to measure customer loyalty?

•They were systematically learning from customers to improve?

•Creating loyal customers was part of the company culture?

POLL QUESTION

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We have been studying loyalty leaders for over 20 years

Metric MovementManagement

system

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15% Lower

>2xCAGR

Loyalty leaders outperform on both growth and costs

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The Net Promoter score predicts business outcomes and captures the imagination of employees

7-8

9-10

Extremelylikely

Extremelyunlikely

Would you recommend us to a friend?

% Promoters

Net Promoter Score (NPS)

% Detractors

Minus

®Net Promoter, Net Promoter score and NPS are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc. and Fred ReichheldNet Promoter System and Promoter Flywheel are service marks of Bain & Company, Inc.

0-6

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There are clear links between customer experience and economics

Note: % likely to leave in next 12 months based on those rating 4-5 (out of 5) on likeliness to leave questionSource: Bain Experience

Average number of switchers because of recommendation

Promoters attract new customers…

…and theyspend more money

…these customersstay longer…

US BROADBAND EXAMPLE

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Many companies start the customer experience journey…

NON EXHAUSTIVE

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…However to outperform, loyalty leaders differentially focus on four requirements

Strategic priority to earn loyalty, sustained leadership commitment

Common language, simple shared goal, and trusted metric

High-velocity closed loop feedback, learning and improvement

Focus on employees as the key to winning with customers

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent. 15

The most common pitfalls

•Leadership team not aligned and not committed

•Metrics not reliable, not sufficient and not trusted

•Case for change missing (‘head and heart’)

•NPS not tailored to day to day routines: ‘more work’ not ‘how we work’

•Focus on the score instead of behaviours

•Linking incentives to customer feedback too early

•Failure to prioritise and focus on initiatives to ‘move the needle’

•Insufficient early momentum and trust established (training, support, wins)

1

3

4

2

5

6

7

8

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Net Promoter System: mechanisms to achieve advocacy leadership and a customer-centric culture

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Source: Bain case experience

Feedback & scores delivered daily to each agent

Daily NPS feedback requested via SMS, answers registered

Coaching sessions

Structural issues identified and escalated

NPS, competitive intel, complaints, operational data analyzed

Five why’s, additional customer interviews, etc.

Cross-functional teams form to develop, test and implement potential solutions

Leaders communicate improvements directly to customers and to agent teams

Individual learning, behavior

change, and connection with

customers

Inner Loop Outer LoopPrioritization &

implementation of structural

improvements (e.g., pricing, product, process, policy, etc.)

HuddleTeam problem-solving, issue

escalation, mutual commitment

Gather andunderstandFollow up

with selectcustomers

Identifyactions

and coaching

needs

Execute on actions and

coaching

Communicate

Analyze feedback and other

data

Identify issues and

opportunities; prioritize

Under-stand root

cause and develop empathy

Develop solutions and

implement actions

Communicatewith employees

& customerscustomerfeedback

Agents, supervisors, leaders make follow-up calls

Agent level trends monitored; Individual dashboards generated

Actions taken to repair customer relationship

Frequency, severity, impact, readiness

Team issues identified and worked

Example: At Telco Co, employees use a high-velocity learning loop process

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For a long time a simple survey was the main pillar for collecting customer feedback…

Survey

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…the world has changed considerably, creating complexity and opportunities

SURVEYSURVEY

RATINGS SITES

•

•

EMBEDDED RATINGS/

SURVEY (UBER)

SOCIAL

• Twitter

• Facebook

• Blogs

OPERATION DATA

• Late Flights

• Bad route

CRM DATA

• Call backs

• Purchase patterns

• Downgrades

EMPLOYEE VOICE

BIOMETRICS

• Language/tone

• Facial expression

• Depart without purchase

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The Promoter Flywheel(SM):Employee and customer advocacy go hand-in-hand

Work here!

Buy from here!

Employeeadvocacy

Enthusiasm, energy,

creativity

Profitable, sustainable

organic growth

Buy from here!

Excellence, trust, value

Growth, opportunity

Customeradvocacy

The Promoter Flywheel is a service mark of Bain & Company, Inc.

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent. 21

The results are clear: companies with engaged employees deliver superior financial results

… AND IMPROVE PROFITABILITY

• More customer loyalty

- Higher average revenue per customer

- More customer referrals

- Less customer churn

Revenue

Cost

• Reduced attrition

- Less hiring and training required

- Less onboarding

• More efficiency

- Increased productivity

- Lower absenteeism

• And for some industries:

- Less shrinkage

- Higher quality

- Fewer safety incidents

COMPANIES WITH HIGHER ENGAGEMENT GROW FASTER…

Source: Hay Group Insight “Engaging and Enabling Employees to Improve Performance Outcomes” (2009 Hay Group global normative database)

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Rackspace and the Net Promoter System: Making technology easy for customers

View the video at http://NetPromoterSystem.com/videos

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Potential Customer Experience revolution implications for the CompTIA community members

LEADERS CULTURE TECHNOLOGY

•Really engage with customers

•Inspire & serve your customer interface

•Integrated data, easy to consume at the frontline

•Differentiate on simple, flexible and reliable

•Competitive advantage by design

•Own the problem – one company to the customer

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent. 24

Questions?

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NetPromoterSystem.com

Up Next

• 4:30 pm: Wine Down Reception• Think & Drink Lounge

See you next year for ChannelCon 2017in Austin, Texas!

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