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 – and our results show that it can be tougher to deliver services consistently well (and build strong relationships) in some industries than it is in others.

One particularly tough industry is the provision of Outsourcing services. These services include IT, payroll, finance, manufacturing, call centres, washroom services… 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 organisations that can provide those services 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, run out of control.

I spend a lot of my time with senior executive teams – including those in the outsourcing industry – helping them understand what their major corporate (and government) clients think of them. When I present their customers’ feedback to these leadership teams – 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 of 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. If the fundamentals of a business relationship are the same from one industry to the next, there should be little difference in CRQ or NPS scores across different industries.

And yet, in practice, we do see significant differences in certain industries. For example, corporate banks seem to find it easier to build strong relationships with their corporate clients than companies that provide complex outsourcing solutions.

So why is this? Why does it appear to be so difficult for service providers to get really good customer feedback results 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:

  1. Outsourcing activities that should not be outsourced;
  2. Selecting the wrong vendor;
  3. Writing a poor contract;
  4. Overlooking personnel issues;
  5. Losing control over the outsourced activity;
  6. Overlooking the hidden costs of outsourcing; and
  7. 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 – are also guilty of 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’ – a professional sales and commercial group – that bids for new contracts. Before the ink is dry ve to be able to on the contract, the bid team has moved onto the next major deal, having handed over 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. As discussed above, service providers must run an outsourced operation at a lower cost that the company doing the outsourcing. One way of achieving that is 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, or 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. Often it’s not, and even when it is, there are always teething problems.

SO WHAT’S A GOOD NPS 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 truly 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 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), thereby outperforming the competition and making much greater profits for you and your shareholders.

Why Sample Sizes are Nonsense (in the B2B World)

Most of Deep-Insight’s work is based on helping large international B2B organisations run effective Customer Experience (CX) programmes.

The key to running a good CX programme is understanding how to change the culture of an organisation to make it truly customer-centric, and that has to be based on regular high-quality conversations – both formal and informal – with your B2B clients.

Without regular client feedback, sales directors and account teams will not be in a position to address small issues before they escalate to a point where they damage or destroy the client relationship.

When we plan Customer Relationship Quality (CRQ™) assessments for our clients, one of the questions I regularly get asked is “How many of our clients should we sample?”  The stock answer that I’ve been using for the past decade is “Think Census, Not Sample”. In other words, get feedback from your entire client base – every single one – and it’s the answer I still use.

It’s not meant to be a glib response but there are a few subtleties underpinning the answer that are worth exploring.

TRADITIONAL APPROACH TO SAMPLING

Many market research and customer insight people – even in B2B organisations – tend to approach the subject of customer feedback from a consumer perspective, where there are tried and trusted approaches for surveying large customer bases, or “populations” to use the technical term. If you’re not that familiar with these approaches or terminology like random sampling, margins of error and confidence levels, have a look at the Box below.

MARGINS OF ERROR, CONFIDENCE LEVELS AND SAMPLE SIZES – TRADITIONAL APPROACH

If you’re not a market researcher or statistician, don’t worry – there are plenty of good primers on the Internet explaining the basics of sampling techniques and associated terms – here’s one from YouGov.

You’ll also find several handy little calculators on the Internet (here’s a link to one) which let you know how many respondents are required for a particular population (customer base) in order to give a confidence level and margin of error. From this, it’s easy to calculate the number of individuals you need to invite to participate in a survey in order to get a robust answer.

Most opinion polls are conducted with a random sample of at least 1,000 people and here’s the reason why: pollsters like to be confident that their results are within a margin of error of 3% or less. Supposing the voting population in a country is 10 million people. Plug that number into our online calculator and we see that a 3% margin of error and a confidence level of 95% requires a sample of 1,067.

All that is fine if you’re working in a consumer environment or if you have tens (or hundreds) of thousands of SME customers. However, the traditional sampling techniques have less value when you are a B2B organisation and the vast proportion of revenues is generated by a handful of large clients. There may be a “long tail” of smaller customers but in most cases the Pareto Principle applies, whereby 80% of revenues are generated by 20% of clients. In some cases, the ratio can be 90/10 rather than 80/20. In such cases, the old traditional sampling approach needs to be chucked out of the nearest window and a different set of principles applied.

THE DEEP-INSIGHT APPROACH – FOLLOW THE MONEY

Our approach is to be pragmatic and follow the money – concentrate on those clients that generate the majority of the revenues, and do a ‘deep dive’ into those relationships.

It’s probably easier to explain using an example.

Case Study – Large UK Services Company
Revenues: Over £1 billion
Key Clients: 100
One of Deep-Insight’s UK clients has over 10,000 employees and generates annual revenues in excess of £1 billion. However, its customer base is actually quite small and the contracts it has with these key clients are extremely large. The company has several hundred clients in total but the vast majority of its revenues come from the ‘Top 100’ and even among the ‘Top 100’ the revenues are skewed heavily towards the 10 largest clients.

So how do you run a CX programme when your client base looks like this? In that particular case, the company has chosen to focus exclusively on its ‘Top 100′ clients. Purists might argue that this is not representative of the full customer base. This may well be true but it definitely is representative of the full revenue base, and that’s the commercial perspective of “following the money.”

From a pragmatic perspective, it makes little sense to take a sample of the Top 100 clients. You should attempt to get feedback from every single one and ideally you want to get a wide representation of views from across each of those 100 clients.

Even from a statistical perspective, it makes little sense to sample – if you need convincing, have a look at the second Box below.

APPLYING THE DEEP-INSIGHT APPROACH

Suppose there are 10 key individuals (at most) in each ‘Top 100’ client whose feedback is really “important” (in other words, the decision-makers who will renew the current contract when it’s up for renewal) that’s still only a population of 1,000 individuals across your Top 100 clients – run the numbers and you’ll see that you need to include all, in order to get a statistically significant sample.

Let’s plug those figures from our Case Study into the online calculator and see what happens.

For a population of 1,000 decision-makers, we need 278 responses to get a robust score (robust being a margin of error of 5% and a confidence level of 95%). Deep-Insight will typically achieve completion rates of 35-40% from its online B2B assessments so that means we need to invite 700-800 of those 1,000 key individuals to participate.

If you think a margin of error of 5% is too high, then plug in 3% into the online calculator. Now the number of responses jumps to 517 out of 1,000. This means you DEFINITELY need to invite all 1,000 to participate to get anywhere near your target margin of error.

Successful CX programmes in B2B companies are not built around statistics. They are built around empowering staff and providing account managers with all the customer feedback they need to manage client relationships more effectively. That means getting feedback from ALL individuals in those key clients and working really hard with the account teams to get participation and completion rates as high as possible.

So when you’re planning your next Customer Relationship Quality (CRQ™) assessment, remember to get the account managers involved and “Think Census, Not Sample”.

A Christmas Message to Our Customers

We’re coming to the end of another year and all in all, it’s been a good one for us here at Deep-Insight.

We are an Irish company – and proud of it – but our client base is international. Over the past 12 months, we have carried out customer and employee assessments in the UK, Netherlands, Poland and Australia as well as in our home market. That said, one thing that I have noticed in 2015 is a marked increase in activity from local companies. The Irish recovery is definitely under way.

NEW FACES

 

Jamie Jaggernauth

We’ve had a particularly busy year at Deep-Insight and as a consequence, there are a few new faces in the Cork office these days.

We’re delighted to welcome Jamie Jaggernauth, who is our latest addition to the Deep-Insight team.

Jamie hails from Trinidad and has worked in a variety of research roles in the Caribbean, UK and Ireland before joining Deep-Insight.

NEW CLIENTS

We also added a few new names to our client list during 2015, ranging from large well-established firms like the health insurer VitalityHealth in the UK to newer digital organisations like DoneDeal, which is Ireland’s biggest classifieds site (and which is part of the Norwegian-headquartered Schibsted Media Group).

In fact, DoneDeal celebrated its 10th birthday this year so a big happy birthday to John, Cathal, Kristian, Simon and the rest of the DoneDeal crew!

DEEP-INSIGHT’S OWN CUSTOMER ASSESSMENT

Earlier this month, we asked you what you thought of your relationship with us.

Now, I must admit I awaited these result with some trepidation. We think we deliver an excellent service to our clients but it’s always slightly scary waiting to hear what people ACTUALLY say about us and the benefits of working with Deep-Insight. It’s scary because we do take your feedback personally and it’s always a little nerve-wracking waiting for the results ton come through.

Last year, we had a Customer Relationship Quality (CRQ) score of 5.2 and a Net Promoter Score (NPS) of 17%. I was a little disappointed with those scores last year as they were down from the scores we received on our previous assessment and I felt that we could – and should – have done better.

A NPS of 17% is above average (more on average and good Net Promoter Scores here) but frankly it’s not that much above average. We had significantly higher scores in the past and we don’t see ourselves as a “slightly better than average” company. We used to be regarded by our clients as ‘Unique’ but in 2014 we dropped out of that zone. It’s a bit like a restaurant losing its Michelin Star – I was extremely keen to see if we could get back into the top bracket again this year.

So how did we do? How did you rate us?

2015 CLIENT FEEDBACK

 

This year, you gave us a Customer Relationship Quality (CRQ) score of 5.7 and a Net Promoter Score (NPS) of +37%.

I was a little stunned when the results came through as our NPS and CRQ scores had shot up dramatically. As many of you will be used to hearing me say at this stage, it’s quite a challenge to get your CRQ score to jump by more than 0.2 or your NPS to increase more than 10%. We had worked hard on a number of fronts over the past 12 months but the size of the improvement in scores still came as a surprise. So thank you for that vote of confidence in Deep-Insight – it really does mean a lot to us.

UniquenessThe other thing I’m particularly pleased with is the fact that we are back into the ‘Unique’ zone – that’s the light green box in the top right hand corner of the graphic. To be seen as unique, a company has to be able to provide a solution that truly solves its customers’ problems, as well as providing an excellent experience for that client. That’s something that only 10% of B2B companies achieve so it’s nice to be able to claim that accolade again.

There’s still plenty for us to work on. We’re currently analysing each and every verbatim to figure out exactly how to improve our service even further. We will be sharing these results with you as early as we can in the New Year.

LOOKING FORWARD TO 2016

So there it is. 2015 is nearly over but we have some exciting things planned for next year.

Over the past few months, Rose Murphy has been talking to most of you about what you like and dislike about our current product offering. The feedback you have given to Rose, as well as the various suggestions you have made in this recent client assessment, will help us improve what we do and how we do it.

But for the moment, allow me to say a big thank you to each and every one of you for supporting us throughout 2015.

On a personal note, I’d also like to say a big thanks to the following (in no particular order other than alphabetical): Brian, Frank, Grainne, Jamie, Mark, Mary, Peter, Pim, Rose, Yvonne as well as to the rest of the wider Deep-Insight team who have helped to deliver a fantastic service to you – our clients – over the past 12 months.

Have a very peaceful Christmas and I look forward to seeing you all in the New Year,

John