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

 

Why B2B Benchmarking is NOT a good idea!

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.

Most of our clients want to know how they are doing against the benchmark score for their industry. It doesn’t matter how many times I tell them: “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 and focus purely on being indispensable to their customers, but it’s still 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.

-What exactly is your industry? Are you in the insurance industry, or the insurance broking industry? Or both? Or are you an outsourcing company that specialises in insurance third-party processing? These are all different industries, with different dynamics. And there are differences in average scores from one industry to the next. For example, we know from experience that IT and BPO outsourcing companies tend to get lower than average scores from their clients, while corporate or business banking companies tend to get slightly higher than average scores. Firms operating in niche markets sometimes 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, or the globe, 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.

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.)

Good luck!

What is a ‘Good’ Employee Net Promoter Score?

Last year, I wrote a blog post entitled What is a ‘Good’ B2B Net Promoter Score? which turned out to be surprisingly popular. I’m guessing that was because there’s a lot of nonsense posted on the Internet about companies achieving a NPS (net promoter score) of +62% or even +78%, or about people being hugely disappointed because they only achieved a score of +25%.

Meanwhile, some of our own clients at Deep-Insight clients used to get upset when I would tell them that their NPS was only marginally positive or – ever worse – negative.

The two simple messages in that blog post were:

“Be careful about how you interpret NPS figures” and

“A Net Promoter Score of around +10% is the average for European B2B firms.”

In that blog, I was discussing NPS as a measure of customer advocacy but more and more, it is also becoming the de facto standard for measuring employee advocacy and employee engagement. So this blog will address the question: “What is a ‘Good’ Employee Net Promoter Score?”

Before I let you know what that magic number is, it’s worth digressing slightly to explain the basics of how NPS is calculated. If you’re already a net promoter aficionado, you can skip the box below.

HOW IS THE NET PROMOTER SCORE CALCULATED?

For the uninitiated, a company’s Employee Net Promoter Score (eNPS) is based on the answers its employees give to a single question: “On a scale of 0 to 10, how likely are you to recommend Company X to a friend or colleague?” Employees who score 9 or 10 are called ‘Promoters’. Those who score 7 or 8 are ‘Passives’ while any employee who gives a score of 6 or below is a ‘Detractor’. The actual eNPS calculation is:

Net Promoter Score = % of Promoters minus % of Detractors

Theoretically, companies can have a Net Promoter Score ranging from -100% to +100%.

So think about it. The only Promoters you have in your company are those employees who are prepared to give you a score of 9 or 10 out of 10. In the average American company (remember that the whole Net Promoter concept originated in the USA) that makes sense. Americans tend to score very positively when they are satisfied, so having a high cut-off point is appropriate. However, if you’ve grown up and live and work in a European country, you approach the Net Promoter question from a different cultural perspective.

Many – nay, most – Europeans regard 8/10 as a very good score. Some will argue that 9s or 10s are only handed out in exceptional circumstances. This is culturally ingrained into us Europeans through our schooling system and particularly through our university grading system, where score of 80% (8 out of 10) and higher are almost unheard of.

These cultural differences have to be taken into account when interpreting whether a particular Employee Net Promoter Score is ‘good’ or ‘bad’.

So what is the magic number?

We have been measuring NPS and eNPS since 2006, mainly for European and Australian companies, and the average Employee Net Promoter Score across all of our clients during that time has been a paltry -10%. Yes, that really is a negative sign before the 10.

Minus Ten Percent!

Put it another way: achieving a positive Employee Net Promoter Score is a solid achievement for most European firms, and only very rarely have we seen eNPS results in excess of +20%.

So there you have it. If your company, or department, has just received a negative eNPS in the latest employee survey, don’t feel too bad. You’re in good company!

 

To find out more about Deep-Insight’s employee assessments, click here.

* Net Promoter® and NPS® are registered trademarks and Net Promoter SystemSM and Net Promoter ScoreSM are trademarks of Bain & Company, Satmetrix Systems and Fred Reichheld

Do Americans REALLY score more positively than Europeans?

In a previous blog, I wrote that Europeans were more stingy than Americans when it came to customer feedback. Or words to that effect.

Since then, people have been asking if this is REALLY true, and where is the evidence for this claim.

Well, yes it IS true and while I’m not an expert in the area, I do know somebody who is: Professor Anne-Wil Harzing, Research Professor and Research Development

Advisor at ESCP Europe.

In 2006, Professor Anne-Wil Harzing conducted an analysis of different response styles across 26 different countries.

We recently sat down with Anne-Wil Harzing to discuss these differences.

 

 

John: Professor Harzing, if I look at our own clients – which are mainly headquartered in Europe, USA and Australia – their customers can be based anywhere in the world. When we often report results back by country, we often identify differences from country to country in Customer Relationship Quality (CRQ) or Net Promoter Score (NPS). How should we interpret those differences?

Anne-Wil: Good question – let me answer that in two ways. First, there are characteristics at a country level such as power distance, collectivism, uncertainty avoidance and extraversion which all have a major influence on the way people respond to questionnaires and surveys. This is particularly true when you use Likert scales – you know, the 1-7 scales that you use, or the 0-10 scale that’s used in Net Promoter Score surveys. Second, there are differences based on whether the respondent is replying to a questionnaire in his or her native tongue. Also, English language competence is positively related to extreme response styles and negative related to middle response styles.

John: Can you explain the difference response styles?

Anne-Wil: The main styles that people talk about are Acquiescent Response Style (ARS) where respondents are more likely to agree or give a positive response to a question, and Extreme Response Style (ERS) where the response is more likely to be highly positive or highly negative than Middle Response Style (MRS) where there is a greater tendency to go for an ‘average’ response. High ARS implies better/higher scores while ERS gives you more varied or extreme (and possibly higher) scores than MRS.

John: Can you give us a few examples of those country differences?

Anne-Wil: Sure. Respondents from Spanish-speaking countries show higher ERS and ARS while Japanese and Chinese respondents tend to be far less extreme in their response styles. Across Europe, the Greeks stand out as the highest levels of acquiescence and ERS. Countries across Northern and Western Europe – where many of Deep-Insight’s clients are based – tend to exhibit fairly similar response patterns.

John: And Americans?

Anne-Wil: High ERS and high ARS – you’ll generally get a more positive response from an American audience than from a Western or Northern European audience.

John: That’s very much in line with our own findings. We also see it in a lot of discussions around Net Promoter Scores (NPS). On some American websites, you will read that the average NPS for B2B companies is between 25% and 30%, yet our experience at Deep-Insight is that the average NPS score is closer to 10% and this may well be related to the fact that the majority of our customers (or more important, their clients) are European or Australian, rather than American.

Anne-Wil: It just goes to show that you need to take great care when interpreting cross-country scores. When people complete a survey, their answers should be based on the substantive meaning of the questions. However, we know that people’s responses are also influenced by their response style, so differences between a company’s geographically-based divisions might simply reflect differences in the way clients respond to surveys, rather than picking up real differences in the ways those divisions are going to market.

 

Our own research – although more anecdotal than Professor Harzing’s – backs up her results. Apart from the higher NPS scores I mentioned in the discussion, I also see Americans give higher Customer Relationship Quality (CRQ) scores than Europeans. We pick this up on the standard deviation figures from our results as well. This often results in fewer “Rationals” in the customer base of American clients. (Rationals are good, but not extremely loyal, customers who typically make up 50% of a typical customer base for any of our clients.) In contrast, American clients tend to have more “Ambassadors” and sometime more “Opponents”, which reflects the ERS and ARS styles that Professor Harzing describes.

In her paper, Harzing concludes that:

“Regardless of what remedy is used to eliminate or alleviate response bias, the first step towards finding a solution is acknowledging that response bias can be a serious threat to valid comparisons across countries. We hope this article has provided a step in that direction and that in future response bias will receive the attention it deserves from researchers in the area of international and cross cultural management.”

Good advice!

* Net Promoter® and NPS® are registered trademarks and Net Promoter SystemSM and Net Promoter ScoreSM are trademarks of Bain & Company, Satmetrix Systems and Fred Reichheld

Satisfaction or ‘Statisfaction’?

One of my esteemed colleagues recently sent a draft document to me that had a typo – satisfaction had been spelt with an extra ‘t’, making up a new word ‘statisfaction’.

That got me thinking!

I have been involved in numerous movements and initiatives to drive customer-focused business improvement for over 25 years – from Total Quality & Customer Satisfaction (CSat) through to Net Promoter Score (NPS) and Customer Relationship Quality (CRQ).

One thing that I have learned working with hundreds of companies across the world is that:

IT’S NOT ABOUT THE SCORE – IT’S ABOUT THE CUSTOMERS

Businesses like things quantified (there’s a perception that companies are run by accountants nowadays?), and on the whole I go along with the “what gets measured gets managed” mantra (see below), so I fully endorse customer experience and internal capability measurement.

I also like statistics! I’m intrigued by the fact that (as happened recently in a client) the average score of the Net Promoter question can go up but the NPS itself goes down! I love exploring how ‘the same’ internal capability score can be made up of completely different profiles of strength, weakness, consistency and impact across the organisation.

The first trouble with ‘the numbers’ (scores, averages, top-box, etc.) is that they DE-HUMANISE their source – our customers and how we manage their experience and value.

Yes, verbatims that are often included in the appendices of research reports and are summarised into frequency graphs of positive & negative sentiment (quantification again!), but I really wonder how many executives actually read every customer comment?

My point here is that customers are on a JOURNEY, and have a STORY to tell, but organisationally we’re only interested in a number.

My second problem with ‘the numbers’ is that hitting the score target can easily become the objective in itself rather than improving organisational capabilities. I have seen this lead to many counter-cultural, and indeed downright destructive, behaviours:

-Deselection of unhappy or difficult customers from surveys

-Writing new strategies instead of implementing the one you’ve got

-NPS begging – “please give me a 9 or 10 or I’ll get fired”

-Only ever addressing ‘quick wins’ – never the underlying systemic issues

-Blaming sample sizes and methodologies as an excuse for inactivity

-Blatant attempts to fix the scores (e.g. fabricated questionnaire completions, ‘evidence’ of capability that is in fact just a Powerpoint slide)

-Corporate tolerance of low-scorers – many companies seem content with the fact that large proportions of their customers hate them!

-Putting metrics into performance scorecards but with such a low weighting (vs. sales) that nobody really cares

-Improving “the process” instead of “the journey”

-No follow-up at a personal level because of research anonymity; or inconsistent follow-up if anonymity is waived – often only of low scorers treated as complainants – what about thanking those who compliment and asking for referrals from advocates?

I could go on, but I hope the point is made – beware of “what gets measured gets managed” becoming:

“WHAT GETS MEASURED GETS MANIPULATED”

So instead of targeting statistical scores, seek to find ways of improving your systemic capabilities to cost-effectively manage your customer experience – and then listen to what they’re saying to you about how satisfying it is.

By the way, your scores will improve too!

 

Peter Lavers is Deep-Insight’s UK MD. If you’d like to find out more about how Deep-Relationship-NPS overcomes these issues, please contact Peter here.