Think Customers: The 1to1 Blog

What got me thinking about this was a recent conversation with Richard Owen, CEO of Satmetrix, who said that the biggest problem with companies' adoption of NPS is "trivialization of the concept." As soon as he said those words I thought, "Where have I heard this before?" CRM, of course.

I can't help but wonder, with all the hullabaloo over past CRM mistakes--including trivialization of the concept--why many of the folks who oversee various aspects of customer strategy have recently or are now rushing in to NPS and other customer experience initiatives. (OK, so we probably all could list several reasons why.) But Owen cautions executives to slow down and prepare to handle potential pitfalls.

First, as with implementing a CRM strategy, people think that applying Net Promoter methodology--or any other customer strategy--will be easy. But anything transformational never is. "Culture change is never easy," he said. "The problem is that people will buy in to the idea, but annex it with things they're already doing, in other words, help them do what they're already doing better instead of rethinking what they're doing."

The phrases "How hard can it be" and "We're already doing it" both predicate disaster, Owen said, adding that, as the saying goes, repeating the same mistake is the definition of insanity.

Instead, executives need to stop and consider whether a specific strategy, tool, or approach is a fit for their business, and how much organizational transformation is actually required. Not doing so can have dire consequences. "Saying 'it's all about customers,' but not acting that way causes more than customer dissatisfaction," Owen said. "Employees see it and the best people churn out, and those left are the people who aren't engaged."

Another issue, according to Owen, is that some people view NPS as simply a research tool versus a customer-focused approach to business. Similarly, many people considered CRM as simply a technology tool to plug in rather than a strategy first, supported by technology. "Some say, 'Now we can look at NPS too.' But it's not a type of research," he said. "It's a measurement system that can show the impact of a company's short-term actions to help executives make more informed decisions."

Owen noted that the lack of a developed strategy often leads to an initiative facing the "usual corporate roadblocks to change." They included internal defenses like silos and fiefdoms, piecemeal approaches, rushing in without planning. The result is that the initiative "devolves to zero," he said.

Successes, on the other hand, create a virtuous cycle. Owen cited one CEO who recognized the challenge at hand, including the "corporate antibodies" who would fight the initiative, so he carefully selected who would lead the project and changed the organization's compensation to support a new, customer-focused approach to business.

To begin that virtuous cycle, Owen suggested systematically putting processes in place to operationalize customers' moments of truth in terms of economic measures, including retention. "A single moment or employee can change the perception of a brand," he said.

Communicating the implications and benefits of a new approach keeps the virtuous cycle going. Owen suggested providing a framework every employee can understand. In terms of NPS, this might be asking employees what they think causes customers to be detractors. "Companies often do value-destructive things for themselves and their customers," Owen said. "But often these things are unintended consequences of policies or processes or compensation."

Sometimes those value destructors are the failed customer strategies that weren't thought through before they were launched. Return on Customer, CRM, Net Promoter; these aren't the flavor of the month. They're ways to rethink how customer relationships, engagement, and experience impact the value and profitability of your organization.