ABB s Net Promoter Score: Why we re not satisfied with customer satisfaction...

Transcription

1 ABB s Net Promoter Score: Why we re not satisfied with customer satisfaction...

2 A question of loyalty Well I try, and I try, and I try and I try. I can t get no satisfaction. The Rolling Stones The problem with conventional customer satisfaction surveys is that they don t work. According to 10 years of research* into four thousand companies across twelve industries, 80% of customers who switched to another supplier said they were satisfied with their existing supplier. So, clearly, asking a customer if they are satisfied is not a satisfactory measure of how well a company is doing. It doesn t give us any indication of how loyal they will be, or how likely they are to recommend or re-order. The truth is, a customer is seldom merely satisfied or dissatisfied. It s more complicated than that, and our customer surveys need to reflect this. But not by asking lots of unnecessary questions and accumulating data that will never be used. That merely frustrates the customer by taking up too much valuable time. Especially when you consider how many other suppliers are also sending surveys and requests for feedback. What is needed is a single, simple question the answer to which will provide us with an accurate indicator of the customer s loyalty to ABB, and more importantly their likelihood of re-purchasing or referring. *Bain & Co. 2 ABB Net Promoter

3 And the question is: On a scale of 0-10, how likely are you to recommend ABB to a colleague? ABB Net Promoter 3

4 Can it be that simple? Yes. It may be a simple question, but it gets to the bottom of the loyalty factors involved in making a purchase or recommendation: The Head - best features, service, price The Heart - feeling known, valued, understood, listened to Think about it. If you are going to recommend a company, you are putting your personal reputation on the line. We are asking our customers to do the same by quantifying their rational and emotional feelings towards us. The way we do this is by categorizing our customers into three groups, according to how they score us: On a scale of 0-10, how likely are you to recommend ABB to a colleague? Extremely unlikely Extremely likely are Detractors 7-8 are Passives 9-10 are Promoters 4 ABB Net Promoter

5 Promoters score us at These are the customers who are less price-sensitive because they value ABB for the totality of its offering and look to form a long and mutually profitable relationship with us. This is the group which will give us referrals and re-orders and thus increased revenues in the long-term. Passive customers score us at 7-8. They are neither loyal nor disloyal. They are simply waiting for the next best deal from whichever company. Detractors score us at 0-6. These are customers who are clearly unhappy. They complain more, they want bigger discounts, and they account for 80% of negative word of mouth comments. In other words, they represent a net cost to financial growth! Which of these groups should be our priority? It s obvious, isn t it? ABB Net Promoter 5

6 The Net Promoter Score concept A company s Net Promoter Score (NPS) is calculated by subtracting the percentage of detractors from the percentage of promoters. So, if we survey 100 customers and 60 mark us as 9-10, and 20 mark us 0-6, as a company we have an NPS of 40%. That s 60% Promoters minus 20% Detractors which equals 40%. This, according to Frederick F. Reichheld in the Harvard Business Review, is the one number you need to grow. In fact, Net Promoter Score is by no means a unique concept. It s been the subject of many articles and several books. It s been adopted by numerous blue-chip companies, including many of our customers. But, although it provides a useful scoring system, the key is to understand what s behind that score. So we ve refined the process to make it more useful to us as a company and also simpler to use. Customers have told us that they want one survey from ABB not multiple surveys from different Business Units, all of which are anxious to discover their views. With ABB s Net Promoter process, we can have the best of both worlds. We get our data, but the customer will receive just one survey. 6 Net Promoter Score Booklet

7 And it all starts here, with the creation of the survey using the simple on-line step-by-step wizard available on inside.abb.com. There will be two types of relationship surveys ABB will run. A dedicated survey, specific to Group and Strategic Accounts. And a specific country survey with multiple customers. Because the ABB NPS process has been designed and built by us, there are no external fees to pay for each survey. But what is important here is that each Business Unit can view their data from customers, anywhere in the world, who scored their products & services regardless of who created the survey. And from a customer point of view, they receive just one ABB survey, in their own language. Exactly what they ve been telling us they wanted. How? By utilising ABB s unique red and green card system... ABB Net Promoter 7

8 The red and green card: The unique ABB refinement Firstly ABB s survey is on a single internet page. Unlike conventional surveys with their endless list of tick boxes, and generic questions, ABB s approach asks the customer to drag a red or green card onto the item where our performance needs improving or where we perform well. It means they can identify the issues that matter most to them. And they can do it fast. You can see how our refinement works on the screen below. 8 ABB Net Promoter

9 Once a customer has dragged a card onto a specific item, the customer is asked to tell us why in their own language, relate that comment to a specific product or service and submit the survey. It s that simple and it s that quick. You can see how this works on the screen below. But the real benefit to ABB is that if a customer places a red card onto On-time Delivery for example, writes a comment and ticks the product group Drives, you know exactly where the issue is and can act accordingly. There is no guess work or further analysis required! These elements are all linked. Conventional multi-product surveys would find this impossible. In other words, we know how we rate, why we re rated at that level, and what specific product or service is being discussed. So our sales, service and factory teams can see what the customers are thinking and respond. ABB Net Promoter 9

10 Measure for measure Of course, however accurate the survey, however user-friendly it is, what matters is what we do with the results. As they say, don t worry about customer satisfaction, if you re not going to do anything about it. So how will the results be presented? Well, the customer comes first. So all participants will automatically receive a summary of the results. Apart from anything else, we have a duty to our customers which is part of our company commitment to transparency. So we tell them what they ve told us. But, as a company, we will be able to access all the data - on a dashboard which looks like the screen opposite. It s available to the team which initiated the survey and their nominated team. It s also available to Account Managers/ ABB main customer contacts who will automatically receive Detractor warnings, as well as to all Divisions, Business Units and regions. This dashboard is the basis of a prioritized action plan for improvement, which will be supported by the operational excellence team assigned to each country. Our goal? To exceed the positive 50% Net Promoter Score benchmark set by companies competing with ABB. 10 ABB Net Promoter

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12 Listening and taking action We were not satisfied with conventional customer satisfaction because we needed to take it further. We needed to make our survey a part of a programme of listening, consulting, and acting. With this NPS data, presented in an accessible format, we can follow-up. We can listen, we can talk, we can ensure a dialogue that lasts long-term for the benefit of both of us. And, crucially, we can make sure we exploit the opportunities presented by our Promoters. The ABB Net Promoter Score gives us the way forward by enabling us to identify and then to leverage evangelistic customer loyalty. It s easy for the customer. And it s easy for us, as a company. More importantly, it benefits the customer because we can discover precisely what matters to them. And it benefits us because we can provide better products and better services which means increased revenues and increased growth. And that s what it s all about. 12 ABB Net Promoter

13 For more information and to review ABB Net Promoter go to inside.abb.com. ABB Net Promoter 13

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16 ABB Net Promoter Copyright 2010 ABB. All rights reserved No part of this publication may be reproduced or transmitted in any form or by means, electronic, mechanical, photocopying, recording or otherwise without prior written permission of ABB. Printed in UK (XX.XX)