You Said, We Listened

Last month, we asked our clients what they thought of us. We do this every year and take our Customer Relationship Quality (CRQ) feedback seriously. We try to follow the advice we give to our own clients: give your customers the opportunity to tell you what they think. Listen to what they say. Then act on their feedback.

As we did last year, we cast the net for our 2022 CRQ assessment quite wide. We didn’t just limit the survey to a handful of key decision makers in current clients. We included many operational and administrative contacts. Their views are equally important. We also asked dormant customers what they thought of us.

Last year, you said…

The main message that you gave us last year – actually for the last two years – was that you needed more than just a survey provider. In practice, that meant providing more assistance AFTER your customers gave their feedback. You needed a partner that could help you deliver meaningful change across your whole organisation. You also wanted us to be more flexible and supportive.

We listened, and here are three of the things we did in response to your feedback.

1. Deliver more than just a survey

We have always strived to be more than just a survey company. Our mission is to help companies become truly customer-centric. Getting customer and employee feedback is part of that process, but there’s much more to it than launching a survey. That’s why we completely redesigned the way we work with clients, based on what you said to us.

Today we spend a lot more time with leadership teams and sales or account teams both BEFORE we think about asking our customer’s clients for their views as well as AFTER they give their feedback. The BEFORE piece is critical and must be done properly. If you don’t invest the time up-front, your CX (or EX) programme will not deliver the results that Management and the Board expect from it. More than likely, it will end in failure. It’s as simple as that.

2. Assist with Customer Relationship Quality ‘Healthchecks’

Last year we conducted CRQ ‘Healthchecks’ for clients in the UK and Ireland. The objective of a ‘Healthcheck’ is to benchmark how good a company’s Customer Experience or Customer Satisfaction programme is. That doesn’t just mean assessing if the right questions are being asked of the right people. It’s a more fundamental look at whether all the right components are in place to deliver genuine and meaningful benefits. We do this under four headings:

1. LEADERSHIP. The most important quadrant. Good Customer Excellence (CX) programmes are ALWAYS led from the top
2. STRATEGY. Good CX programmes link customer, product, operational and organisational strategy explicitly to customer needs
3. EXECUTION. Success requires properly resourced teams that are brilliant at executing the Strategy
4. CULTURE. Finally, Customer Excellence must become integral to the DNA of the organisation: “it’s how we do things around here”

All four quadrants are necessary for a successful CX programme. The ‘Hard Side’ quadrants of Strategy and Execution are all about metrics and processes. ‘Hard Side’ activities lend themselves to key performance indicators (KPIs) and while the activities in these two quadrants are important and easily measurable, the quadrants of Leadership and Culture are actually more critical.

In our experience, Leadership is the most important quadrant while Culture is the most challenging. And yet, here’s the strange thing: in most CX programmes the ‘Soft Side’ is often overlooked and almost always under-resourced.

3. Run Customer Centricity ‘Masterclasses’ for managers and leadership teams

One of the key ‘Soft Side’ challenges is making sure your entire organisation is on board with your CX (or CSat or NPS or Customer Relationship Quality) programme. Over the past 12 months, we have partnered with the world-leading HEC Business School in Paris.

That collaboration has helped us develop and deliver a ‘Masterclass’ to educate leadership teams, managers and partners about the importance and benefits of putting the customer at the heart of everything they do. The ‘Masterclass’ also helps employees understand the crucial role they play in making their companies customer-centric.

Already, these ‘Masterclasses’ have been delivered both virtually (for COVID reasons) and face-to-face to clients in Europe, Asia and the Americas.

How did we score this year?

Having made the investments over the past two years, we were very curious to get your reaction. In short, you were very generous in your responses this year.

This year we achieved a Net Promoter Score of +66 and a Customer Relationship Quality (CRQ) score of 6.1 out of 7.

This is the highest NPS result we have ever achieved to date and the third time we have scored over +50. Our CRQ score is also the highest we have ever achieved and we are honoured to be thought of so highly by you, our valued clients.

Result: new client wins

I honestly believe that it’s because of the trust that our clients place in Deep-Insight that we have been able to announce some great new wins in recent months.

We have a 10+ year relationship with Atos but primarily in the UK & Ireland. Earlier this year, we extended that relationship to Germany and over the next three years we will be partnering with Atos on one of their most important and strategic global accounts.

One of our largest accounts in Australia was the logistics company Toll Group. Last year our key contact at Toll moved to Scotts Refrigerated Logistics and we recently signed a new 3-year contract to help ScottsRL become one of the most customer-centric companies in Australia.

Vreugdenhil Dairy Foods is a Dutch milk powder manufacturer that operates in Barneveld, Scharsterbrug, Gorinchem and Madrid. Its 500 staff process 1.4 billion kilograms of milk each year. Over the next three years, we will be working with the Vreugdenhil leadership team to turn a company that creates great food products into a truly customer-centric organisation.

Agenda for 2022

While we’re really proud of these Customer Relationship Quality (CRQ) and NPS scores, there is more to do.

For starters, we got feedback from 48% of the people we asked to participate. While that’s not bad, we do see some room for improvement. Last year our response rate was 55%. We know that some of our clients achieve rates of 70% or more. We will be working hard to improve on this figure next year.

Second, the main feedback we received this year is that our new consulting services are great BUT not enough. Our clients are looking for Deep-Insight to provide even more support. The two customer quotes below confirm to me that we need to support clients on a year-round basis.

“Would like to see greater insight on how we can really make a difference for our customers. How do we truly address those recurring themes that come up each year? It would be great to get insight on how we can do this better – beyond the data”

“I would question to what degree on a continual basis Deep-Insight provides interaction and insight as a partner to the business. Also, to what extent there are follow-up meetings post results as you as experts help inform our response and strategy.”

 

Third, the feedback process is not finished yet. We need to ‘close the loop’ with all clients and discuss their specific feedback. We will be in touch shortly and will be looking specifically for more insights into any additional support needs they may have.

I need to finish off by thanking Fiona Lynch for planning, organising and running this year’s client assessment. Fiona joined us earlier this year from Atos where she was part of a global service delivery team. It’s great to have her on board.

So, well done Fiona, and thank you to all of our clients. We really do value your feedback.

John O’Connor
CEO, Deep-Insight

If Trust is so important, why do so few companies measure it?

Most people understand implicitly that good Business to Business (B2B) relationships are built on a strong foundation of trust. But if Trust is so important, why do so few companies measure it? It’s a question that has always intrigued me. I must admit that I’m still struggling to find the answer.

The fact is that CEOs keep tabs on all sorts of KPIs. For operational performance, there are lots of service level agreements (SLAs) and other three letter acronyms (TLAs). Logistics companies even have five letter acronyms like DIFOT – Delivery In Full On Time. For financial performance, the CFO has an eye-watering array of metrics. For customer performance, there is customer satisfaction (CSat) and Net Promoter Score (NPS).

But rarely, if ever, is there a metric for Trust that is discussed by the leadership team or reported to shareholders.
 

How Important is Trust?

A couple of weeks ago, I ran a short poll on LinkedIn, asking people what they thought was the most important element of a strong B2B relationship. It wasn’t a trick question as we believe at Deep-Insight (based on pretty good academic research) that the three key pillars of a great B2B relationship are Trust, Commitment and Satisfaction.

I wasn’t surprised by the winner but I was intrigued by the margin. It appears that Trust really is seen as the cornerstone of a strong B2B relationship.

Trust Commitment Satisfaction
 

Trust, Commitment and Satisfaction

How are they all related? Here’s how we explain it.

If you take a purely commercial view of any business relationship – and you shouldn’t – it’s all about the revenues you can generate from that relationship over the long term. I know that’s a bit mercenary but that’s how some people view things. The greatest predictor of a long-term relationship is Commitment and it’s important that you measure your clients’ commitment to you. We ask that question quite bluntly to our clients’ customers: “Are you committed to a long-term relationship with [Name of Client]?”

It turns out that the answer to this question has the highest correlation with the likelihood of the company buying from our client again in the future. The opposite is also true. A poor score is the best predictor that the customer will defect to the competition.

But remember: commitment to a long-term relationship is only the outcome of other factors. Two of the most important factors are Trust and Satisfaction. Trust is all about fairness, honesty and acting with integrity. It’s a reflection on what clients think of your brand but, more important, it’s their perception of how trustworthy your people are as well.

Satisfaction, on the other hand, is a measure of how well you meet (or exceed) a client’s expectations. It’s more transactional than Trust, and also more volatile. For example, you can be satisfied with your IT service provider today, but deeply unhappy tomorrow when the network crashes and your factories or stores can’t operate. When the IT service provider pulls out all the stops and fixes the problem in double-quick time, you’re both relieved and satisfied again. Satisfaction scores can fluctuate wildly. Trust scores? Not so much.

 

Trust at Serco

One of our clients that takes Trust seriously is Serco. It’s one of Serco’s four stated values: Trust, Care, Innovation and Pride.

Trust at Serco

Serco is quite clear about both what Trust is, and what it is not. Here are the behaviours it expects from its people:

  • Do what they say they will, try their best and see things through
  • Consistently provide the highest standards of customer service
  • Have a can-do, will-do attitude
  • Are open and honest
  • Communicate truthfully, clearly and concisely
  • Aim to always do the right thing and never compromise our values
  • Think through the consequences of their decisions
  • Speak out when they see something wrong
  • Understand who our customers are, listen to them and act upon their feedback
  • Challenge assumptions in an appropriate way
  • Acknowledge when they make mistakes and take responsibility for correcting them
  •  

    Similarly, Serco believes Trust is not demonstrated if employees or the leadership:

  • Make promises that we cannot keep
  • Rush to provide solutions before listening to others’ needs and opinions
  • Fail to keep customers and colleagues informed
  • Are not straightforward and transparent
  • Allow disrespectful or discriminatory behaviour
  • Knowingly use Serco’s resources for personal gain
  • Break our Code of Conduct or the law
  • Falsify or misrepresent information
  • Ignore and don’t speak up when we see something wrong
  • Choose to ignore adverse criticism
  • Blame others for mistakes we have made or things we have missed
  • Shift our responsibilities to others
  •  

    Why do so few companies measure Trust?

    How many companies measure have identified Trust as a core company value and measure it in a systematic way? The short answer is that very few B2B companies measure Trust at all. Serco is one of the few that even identifies it publicly as a core value. Isn’t that strange? Business magazines and articles are full of ideas and tips for becoming trusted advisors. A lot of CEOs and company boards talk about “trusted relationships” with clients in their annual reports to shareholders.

    Trusted Relationships

    Interestingly, the same CEOs and boards talk about trusted relationships but then quote the company’s Net Promoter Score (NPS). Now don’t get me wrong. There’s nothing wrong with NPS but it’s not a measure of Trust. It’s a measure of Advocacy. Yes, the two are related but it you’re going to talk to shareholders and clients about “Trusted Relationships” or “Acting as Trusted Advisors” then you really should go and measure your performance directly.

    Sometimes NPS isn’t enough. It’s a good metric – simple and easy to understand. But it’s one-dimensional. If you really want to understand how trusted a relationship you have with your clients, you need to measure Trust as well as NPS of CSat (Customer Satisfaction). As a CEO or Sales Director, you need to understand if your key clients are Ambassadors who trust you implicitly, or Stalkers and Opponents who want to get out of the relationship because levels of Trust (and Commitment and Satisfaction) are so low.

    If you want to know more about measuring Trust, have a read of this blog.

    Alternatively, get in touch with us today.
     
     

    Why are Trust and Commitment so Important in B2B?

    Trust and Commitment

    The following words are from two American academics Rob Morgan and Shelby Hunt. We’ll come to these guys shortly.

    ——————————————————

    “Commitment and trust, rather than (or at least in addition to) power and dependence, are now central to discussions of business relationships.

    Researchers and practitioners have come to view most interactions between business parties as events that occur over the course of a relationship between two or more partners.”

    ——————————————————

    Here’s a funny thing about business-to-business (B2B). It’s less about business and more about relationships. In fact, B2B is really P2P: person-to-person. People buy from people. In large organisations, the decision to go with one particular service provider over another is often down to the answer to one simple question: “Do I really want to work with this person?”

    The answer to that question is usually based on the perception of whether the individual can be trusted or not. Without trust, there can be no commitment.

    Does NPS Work for B2B Companies

    I thought companies bought mainly on price?

    Companies generally put large business contracts out to tender. They will produce a clear set of evaluation criteria to help guide their choice of service provider. Price is always one of the evaluation metrics. Even so, the final decision is often made on softer and unwritten criteria. Price is rarely the deciding factor. Often, they are made on a combination of price and solution/ functionality. But when it comes to making the final choice to award any contract, subtle psychological elements come into play.

    “OK, I know these guys seem to have the [INSERT: ‘best product’, ‘lowest price’, ‘most innovative solution’]. But what if it all goes wrong? Will they sort out the issues or will they leave me in the lurch? Will I lose my job?”

    Fundamentally, we like to buy from people we think are honest, who treat us fairly and who act with integrity. In other words, we buy from people we trust. Price is generally a secondary consideration. It can’t be ignored but rarely is it the most important factor in the decision-making.

    Morgan and Hunt

    Two American academics figured this out a long time ago. In 1994, Rob Morgan and Shelby Hunt wrote a seminal paper on what really drives a long-term relationship between two business partners.

    The Commitment-Trust Theory

    The Commitment-Trust Theory of Relationship Marketing quickly became a hit, not just in academic circles, but among senior business executives who were trying to identify why people were likely to do business with you.

    Morgan and Hunt realised that long-term business relationships are built on a mutual and cooperative working relationship between two partner firms. Focus on Trust and Commitment if you want to foster and nurture such relationships. That’s why we built these key metrics into the heart of our Customer Relationship Quality (CRQ) methodology.

    Customer Relationship Quality (CRQ)

    Deep-Insight’s CRQ model works on three levels. Let’s take a quick look at each level. From the bottom up:

    The Relationship Level

    Trust and Commitment are the most important building blocks for a good relationship but don’t ignore Satisfaction. This is simply a measure of whether the customer’s expectations have been met or exceeded. Satisfaction is quite transactional. Customers can be happy one day and deeply unhappy the next, if they experience a problem. If the problem is solved, satisfaction levels increase quickly.

    The Uniqueness Level

    Experience is a measure of how easy you are to do business with and if you are seen as a trusted partner. You can have the best products or services in the world but if your clients can’t work with you and don’t see your people as trusted partners, you will not be seen as ‘Unique’. Deep-Insight defines Solution as a combination of Innovation, Leading Edge and Value-For-Money. These are three related but slightly different concepts but if you score well on all three, you have an offering that can help your clients compete in the marketplace in a way that none of your competitors can do. When we talk about ‘Solution’ we’re not just talking ‘Product’. It’s as much about how the account managers, sales and delivery teams position your company’s product or service, as it is about the product or service itself.

    The Service Level

    Service covers three separate elements: Reliability, Responsiveness and Customer Care. Reliability measures whether or not you do what you say you do. Do you walk the talk? Do you do what you promise? Essentially, can your clients rely on you (and the ‘you’ refers to both the brand and the individuals working with the client). Responsiveness measures whether or not you react quickly to issues that arise. Better, still, are you proactive in anticipating customers’ needs or issues. Customer Care is all about making the customer feel valued.

    Are you interested in building Trust and Commitment with your key clients? Would you like to find out more about our Customer Relationship Quality (CRQ) model? If the answer to either question is yes, contact us today.

    Are you going to NPS me? Yes, I am!

    This is the topic of a talk I’m giving this week at a customer loyalty conference in Melbourne. It is in response to another talk entitled “Are you going to NPS me? No I’m not” in which Dr Dave Stewart of Marketing Decision Analysis will be presenting the case that Net Promoter is a deeply flawed concept. Dave will say that NPS should be discarded by organisations that espouse customer advocacy. To be honest, Dave’s position is close to what I thought of the Net Promoter Score concept when it was first introduced by a pretty smart academic and business consultant called Fred Reichheld back in 2003.

    Tom Fishburn

    Net Promoter Score

    Reichheld’s basic premise was that you only need to ask one question in order to understand if a customer is going to stay loyal to you or not. The question is: “How likely are you to recommend us to a friend or colleague?” Fred, being the excellent marketeer that he is, proclaimed the benefits of this Net Promoter Score (NPS) concept in respected publications like the Harvard Business Review. He then promoted it in his own book The Ultimate Question which came out in 2006, shortly after I took on the CEO role here at Deep-Insight. Since then, NPS has became very popular as a customer loyalty metric.

    However, NPS has also attracted some heavy criticism. Tim Keiningham gave NPS a particularly scathing review saying that he and his research team could find no evidence for the claims made by Reichheld. (It should be said that Keiningham worked for the market research company Ipsos so his views may not be completely unbiased.)

    At that time, my own view was that NPS was probably too simplistic a metric for business-to-business (B2B) companies. I also felt that Deep-Insight’s own customer methodology – which also included a ‘would you recommend’ question – was a much better fit for complex business relationships. And if I’m honest, there was an element of ‘Not Invented Here’ going on in our own organisation as well.

    So we decided to ignore NPS.

    The Rise of NPS

    But here’s the thing: our customers didn’t ignore it. When we ran customer feedback programmes for customers like Reed Elsevier and Atos in the UK, ABN AMRO in the Netherlands, Santander in Poland, and the Toll Group in Australia, they would all ask: “Can you add in the NPS question for us – we have to report the numbers back to headquarters?” Of course, being the good marketeers that we were, we duly obliged. However, we always gave the results back in a separate spreadsheet, so that it wouldn’t contaminate our own reports and our own wonderful methodology!

    Roll the clock forward to 2013. NPS still hadn’t gone away. In fact it had become even more popular. It was particularly popular with large international companies where a simple understandable metric was needed to compare results across different divisions and geographical areas. And when I finally looked into it, I discovered that Deep-Insight had actually been gathering NPS data from customers across 86 different countries since 2006.

    Is NPS a good predictor of loyalty?

    Around the same time we also did some research into our own database to find out what really drove loyalty and profitability in our clients. Now this is not an easy thing to do, as many of you who have tried will know. But where we had several years of customer feedback data, it was relatively straightforward to analyse how many of our clients’ B2B customers were still with them. If they have deliberately defected, we investigated if that defection could have been predicted by a poor Net Promoter Score, or by any of the metrics in our own CRQ methodology.

    I have to say that the results were quite interesting. A low ‘Likelihood To Recommend’ was not the BEST predictor of customer defection. However it was actually a pretty good predictor. Deep-Insight’s overall Customer Relationship Quality (CRQ) metric was a slightly better predictor.

    A poor Commitment score – one of the key components of CRQ – was the best predictor of whether a B2B client was going to defect to the competition or not.

    So there we had it: NPS did actually work.

    It worked not because it’s the BEST predictor of whether a client was going to defect, but because it’s a GOOD predictor, coupled with the fact that NPS has been embraced by some of the world’s leading organisations as an easy-to-use and internationally-accepted customer benchmark. 

    At Deep-Insight, we came a little late to the party. We only incorporated Net Promoter Score into our customer methodology in early-2014. Today we find that the combination of NPS and our own CRQ metrics works really well for our clients.

    The future for NPS

    Now let’s go back to the cartoon at the top of the blog (and thank you to the wonderful Tom Fishburne for allowing us to use it). If there is a statistically purer methodology than NPS, why not use that instead?

    The answer is simple: most senior executives aren’t interested in re-inventing the wheel. They are much more interested in taking the feedback from their clients and acting on it, so that they can protect and enhance the revenues they get from those clients.

    So for those B2B executives who are wondering if NPS is the right customer metric for them or not, I would suggest that you’re asking the wrong question. What good CEOs and Sales Directors are asking these days is:

    “If my Net Promoter Score is low or if I have a lot of Opponents and Stalkers as clients, what do I do?”

    In fact, the really successful CEOs and Sales Directors are spending the time thinking about the challenges of putting a really effective customer experience (CX) programme in place, rather than worrying about the purity of the metrics. That’s what you should be doing too.