Your Views on Deep-Insight

In January, we asked you what you thought of your relationship with Deep-Insight so let me start by saying THANK YOU to everybody who completed our own Customer Relationship Quality (CRQ) assessment.

Two years ago we had a CRQ score of 5.7 and a Net Promoter Score (NPS) of +37%. Our clients across Europe and in Australia told us that they saw us as “Unique” and that our solution was essential to their business.

I was delighted by these customer scores and more than a little humbled by the positive comments our clients shared with us. Since then, we have all been asking ourselves: Could we replicate those results? Could we remain Unique? Let’s get straight to the results and find out.

OUR 2018 RESULTS

Bottom line: this year our scores are good but not as good as in our previous assessment.

We had a 45% completion rate, a CRQ of 5.4 and a NPS result of +23%.

These are good scores but to our disappointment, our Uniqueness “prize” has been taken away from us. When we first saw the headline results, we felt like a hard-working team in a top restaurant that has just lost its Michelin star. The great Irish chef and restauranteur Kevin Thornton described that experience as akin to “a stab in the heart”. I don’t think we took the news as badly as Kevin did but we certainly felt a little deflated.

On the plus side, we were only just outside the Unique zone, and the encouraging message for me was that the overall feedback was still very positive:

-Top quartile performance (even if it wasn’t top decile)

-Half of our customers are Ambassadors – same as in our previous assessment

-No Ambivalents, Stalkers or Opponents in our customer portfolio – better than last time around

-Very positive reaction to the introduction of our Deep-Dive online platform

 

THE CHALLENGES OF REMAINING “UNIQUE”

Being Unique was great. It was a validation of everything we had been striving to achieve. It meant we were on a par with the the Top 10% of all companies globally. But it’s a challenge to maintain that Unique status so it was important for us to understand what messages lay behind the headline results and address any common issues across our client base.

When we went through the results in more detail, we discovered that the number of clients who had given us higher scores this year was the same as the number who had given us lower scores. Our new clients also gave us very good scores so it wasn’t an on-boarding issue which is an issue we see in some of our clients’ assessments. We did notice that one of our larger clients had scored us badly for not being flexible enough in our dealings with them, and this became very clear when we went through the verbatim comments. There was no shortage of suggestions from people on how we could improve our offering and regain our Unique status.

We want our Unique status back! What are we going to do about it? Based on your feedback, we are planning three sets of activities in 2018:

#1. Implement a benchmarking programme

While reading your comments we realised that one word that kept getting mentioned: ‘benchmarking’. In previous years, we would tell our clients that the two best benchmarks you can have are against your previous performance (have you made significant improvements since last year?) and against a Best In Class standard (are you seen as “Unique”?). Most of our clients buy into those messages but there is still a strong desire among senior executives to understand how their organisations fare against their peers in their industry. Deep-Insight has over 15 years worth of historic CRQ and NPS data across a variety of B2B industry sectors and this year we will start implementing benchmarking comparisons in our reporting.

#2. Bring more innovation to the table

In late-2016 we started to roll out a new online reporting and analysis tool called Deep-Dive. It has turned out to be a very popular addition as it allows additional analysis and insights to be gleaned from the underlying data. This year, we will be making minor improvements on reporting and more intuitive navigation. In 2019 our aim is to give Deep-Dive a complete makeover with a new interface and features. We have also taken on board a number of comments regarding our product offering. For example: questionnaire length (“Can we make it shorter!”), anonymity (“Do customer assessments always have to be anonymous?”) and frequency (“Can you run monthly/ quarterly NPS surveys for us?”) and we will have announcements on these items later in 2018.

#3. Review our processes and be more flexible

We are perceived as rigid and inflexible by some clients. Now there are times when we need to be rigid. For example, our clients trust us to keep their details secure and their customers trust us to keep their feedback anonymous. On the other hand, we are aware that there is still work to do on our processes and in particular on the automation of tasks and activities. We have already started reviewing them to see how we can upgrade and automate some of these activities. We are also looking at how we can better integrate the Deep-Insight offering with other CX technologies in the marketplace, as well as examining how to make the core CRQ question set shorter..

In the coming weeks, we will be discussing these results with you in order to figure out how we can better serve your needs in 2018. On a personal level, I’m looking forward to those discussions and welcome the opportunity to allow you shape Deep-Insight’s future.

John O’Connor
CEO, Deep-Insight

 

What? Zero is a good Net Promoter Score?

Deep-Insight works with clients spanning all industries. From experience we know it’s tougher to deliver services consistently well in some industries than it is in others.

One particularly tough industry is Outsourcing. Outsourcing services include IT, payroll, finance, manufacturing, call centres, washroom services and so on. In fact, there are very few functions and processes that have not been outsourced. This phenomenon is not just confined to the private sector. Some of the biggest outsourcing deals involve the provision of services to local, regional and central government clients.

Over the past two decades, outsourcing has become commonplace as companies have focused on their core areas of expertise and hived off other functions to specialist firms. The theory is simple: focus on your own core competences and leave the rest to firms that can run those activities better, faster, cheaper than they can. Unfortunately, many of these arrangements fail to deliver the expected benefits and many service providers get badly burnt when large contracts that they have bid for, and won, spiral out of control.

I spend a lot of my time with leadership teams helping them understand what their major corporate (and government) clients think of them. When I present their customers’ feedback – in the format of Customer Relationship Quality (CRQ) and Net Promoter Scores (NPS) – one of the most common questions I get asked is “Are those scores typical in our industry?”

Put it another way: they want to know what a ‘good’ CRQ or NPS score is for their industry.

Some industries are different

Many executives tell me that their industry is different. My stock response is that the nature of a business relationship is the same regardless of what industry you operate in. There should be little difference in CRQ or NPS scores across industries as the fundamentals of a business relationship are the same.

And yet, in practice, some industries ARE different. For example, corporate banks seem to find it easier to build strong relationships with their clients than companies that provide complex outsourcing solutions.

So why is this? Why is it so difficult for Outsourcing companies to get really good customer feedback and scores? And – back to the title of this blog – what is a ‘good’ Net Promoter Score if you operate in the Outsourcing industry?

7 Deadly Sins of Outsourcing

Several academics such as Jérôme Barthélemy have tried to address this question. Jérôme has identified the “7 Deadly Sins of Outsourcing” – the pitfalls that companies blunder into when they make a decision to outsource a process or entire function to a service provider. These seven sins are:

 

  • Outsourcing activities that should not be outsourced;
  • Selecting the wrong vendor;
  • Writing a poor contract;
  • Overlooking personnel issues;
  • Losing control over the outsourced activity;
  • Overlooking the hidden costs of outsourcing; and
  • Failing to plan an exit strategy (i.e., vendor switch or reintegration of an outsourced activity)

 

 

 

The Terrible Three

It’s not just the company that’s doing the outsourcing that’s at fault. The vendors – or outsourcing service providers – have their own deadly sins, the most common of which (the Terrible Three) are the following:

– The Sales–Delivery Gap. This typically happens when a vendor has a ‘bid team’ that competes for new contracts. Before the ink is dry on the contract, the bid team has moved on to the next major deal. They leave the delivery and implementation to a completely different team that looks at the contract and shouts: “WHAT? You expect us to deliver that? With those resources? And for that cost?”

– The Efficiency Challenge. Outsourcing providers need economies of scale to make money. The unit cost of providing payroll services to 10 companies is lower than to a single company, but only if the service provider can establish a large efficient ‘factory’ for the delivery of these services. In most cases, the ‘factory’ managers operate on principles that are based on efficiency and cost containment rather than on delighting the customer.

– The Offshoring Issue. One way of achieving lower costs is through ‘offshoring’ – locating the ‘factory’ in another part of the world where labour costs are significantly lower. So the UK service provider moves the IT development to India. The Australian service provider transfers the call centre functions to the Philippines. Nothing wrong with that, as long as it’s meticulously planned and executed. Very often it’s not, and even when it is, there are always teething problems.

What is a GOOD Net Promoter Score for an Outsourcing company?

In a previous blog I said that an ‘average’ Net Promoter Score for a European B2B company is in the region of +10 and that scores in excess of +30 are excellent.

Our experience is that an ‘average’ NPS score for Outsourcing companies is negative – typically in the region of -10 and that any NPS result in positive territory can be regarded as a good result.

So there you have it. Zero CAN be a good Net Promoter Score for some European B2B companies!

If you are a senior executive in a company that provides outsourcing services, you can settle for mediocrity and target your staff to achieve a zero or slightly positive NPS. Alternatively, you can work with your clients to make sure they avoid the 7 Deadly Sins (as well as making sure you avoid the Terrible Three internal sins). If you’re successful, you’ll outperform the competition and make much greater profits for you and your shareholders.
Does NPS Work for B2B Companies

Why B2B Benchmarking is NOT a good idea!

Am I better than the competition?

If I got a penny for every time a client has asked “How do we compare against our competitors?” or “How are we doing against the benchmark for our industry?” I’d be a rich man. But the thing is that B2B benchmarking is not a good idea.

Seriously. You should strive to be a ‘Unique’ company and not an average company.

Most of our clients want to know how they are doing against the benchmark score for their industry. My response: “If you really aspire to being a mediocre company, then I’ll tell you what the average score is for your industry and how you compare against the average. But you can do better than that. You can be UNIQUE.”

In fairness, some of our clients have latched on to the message that they should ignore the competition. They should focus purely on being indispensable to their existing customers. Still, it’s tempting to see where you stand in a league tables against your industry peers.

So let me ask a few questions about why you want to do benchmarking. Because B2B benchmarking is not a good idea!

What exactly is your industry?

Are you in the insurance industry, or the insurance broking industry? Or are you in both? Or re you an outsourcing company that specialises in insurance third-party processing?

They’re all in the insurance world but these are very different industries. They have different dynamics and there are differences in average scores from one industry to the next. For example, we know from experience that many IT and most BPO (Business Process Outsourcing) companies tend to get lower than average scores, while corporate banking and professional services companies tend to get higher than average scores. Firms operating in niche markets also find it easier to be seen as different and unique.

If I say you’re at the industry benchmark, will you really be happy?

If you aspire to hit the average score for your industry, or your country, you’re setting the bar pretty low. What you’re telling me is that you want to be an average company.

To take my point to its extreme, benchmarking is little more than a recipe for mediocrity.

Do you realise that international benchmarks are inherently flawed?

This is not just because the insurance broking or widget-manufacturing markets in the Netherlands have a completely different structure than they do in Australia. It’s also because Dutch and Australian clients have completely different approaches to the way they answer customer surveys.

There are some good academic papers on how different nationalities are pre-disposed to answering questionnaires differently. Let me give just one example. Some people will claim that the average Net Promoter Score (NPS) for B2B companies is between 25% and 30%, regardless of industry. However, these figures are heavily skewed towards US companies.

Our experience of gathering NPS scores across 86 different countries since 2006 is that the average NPS score for any B2B industry is closer to 10%. But then again, our clients are more heavily weighted towards European and Australian respondents, who generally tend to score less positively than their American counterparts.

But I still want to benchmark my performance!

I thought you might say that.

If you really do want to benchmark yourself, then let me suggest that you approach the subject of benchmarking in a slightly different fashion:

  1. START BY SETTING THE BAR HIGHER. Aspire to be the best, or at the very least to be ‘Unique’ in the eyes of your customers. Our database at Deep-Insight shows that only 10% of B2B companies are considered Unique by their clients, but these Unique companies have significantly stronger relationships – and retention rates – than the ‘average’ company. Unique companies typically have twice the number of Ambassadors and have NPS scores of 30% or more.
  1. BENCHMARK YOURSELF AGAINST YOUR OWN PERFORMANCE LAST YEAR. That’s a much more reliable way of seeing if you are becoming more customer-centric or not. The journey to becoming a customer-centric organisation is a long one – don’t think you’re going to achieve it in anything less than three years – so be sure to check your progress formally on at least an annual basis.
  1. BENCHMARK YOURSELF INTERNALLY. See what your clients think of you, compared to the scores that are achieved by other divisions or business lines within the same company. If you’re an international company, benchmark yourself against other geographies (but watch out for the cultural differences between, say, American and European divisions.)

Remember that B2B benchmarking is not a good idea. It’s not a BAD idea. It’s just that you should ignore the competition and become unique for your customers.

Good luck!