Fred Reichheld

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Comments

hyokon

I think it differs case by case.

When the culture needs to reflect loyalty rapidly (e.g. when your sales people are too skewed to volume), having loyalty-linked compensation will work.

But when you are dealing with many different issues (not just volume vs. loyalty), I would rather make the compensation simple and consider loyalty qualitatively.

There is no one compensation system that solves everyone's problem. That's why we need the top management with good judgment.

Nitesh Chetri

Hi,
In my organization NPS forms 25% of the business and bonus goals for the employee. This has started from 2007 onwards. Customer satisfaction is our first motto and making it visible to the employees is very important. Linking NPS to variable pay shows the employee that the organization walks the talk and really believe in building its business thru customer satisfaction and loyalty.
This change was huge for the employees and initially there were a lot of pushback, but the clarity of communication and sanctity of NPS data cleared most of the doubts.
NPS for org. is handled by a third party and the work is related to back office operations.
Overall NPS helps the org. to benchmark itself agaist the best in world without bothering about the industries. And an important question - "We are the best in the industry we belong too but are we best in world", - NPS will help us answer this...

GCullen

My view is that NPS is a measurement with lots of noise when you are asking how likely someone recommends an entire organization. In my organization there are many experiences that shape an opinion outside that of a specific representative so it is unfair to hold that representative accountable for actions outside of his/her sphere of direct influence. I prefer developing and measuring touchpoints which are directly correlated to NPS and for which representatives have direct influence. Improvements within these touchpoints improve overall NPS. Therefore, a representative is directly accountable for their touchpoint and a compensation program can be created that includes meeting touchpoint objectives seems more fair.

Sabrina

In "Loyalty Rules," the most compelling element was the emphasis on employee loyalty. To employees, customer loyalty and NPS should be secondary concerns, and naturally follow, as satisfied workers are the best promoters. I know this blog's focus is NPS, but having worked for Charles Schwab, and experiencing the NPS concept being used as a profitability strategy while the critical element of employee loyalty was sorely neglected, I would hope the bigger picture of loyalty management would be woven into every discussion on the implementation of NPS. There is no quicker way to alienate employees than to focus all of your energy and concern on the customer and none on the needs and well-being of those on whom you depend to produce your product or provide your service.

Arcadio Roselli

Performance based pay that promotes customer loyalty is incredibly compelling. The key is having the metrics gathered to support such findings linked by cause and effect such that there is no doubt as to the credibility of the metric and its direct impact on loyalty. NPS is in my opinion a small part of what is a composite of metrics that become part of what is a cusotmer experience index.

Guillermo

I feel NPS is a good way to measure customer satisfaction, nevertheless, it’s important to give not only the NPS score, but a well developed list “actionable” opportunities behind that scores, or actions to change the Scores. In one word, not only to punish or reward, but a way to act.

Kristina Nyzell

The NPS is a strategic management tool which helps an organisation to manage it’s long term assets and investments I a complex, emergent and open source economy. The NPS makes the organisational firewall more porous to outside influences. It is more meaningful as a company wide measure than traditional “loyalty” measures would be which looks at “share of eye ball” as opposed to “mindshare”.

The failure to implement the NPS and link it to employee compensation is in my experience related to issues to do with the reliable collection, integration, quality and availability of data across touch points and meeting points. The collection of relevant consumer insights to support the NPS dashboard has to be supported by an integrated and company wide performance measurement system which is also linked to the overall objectives and strategy of the firm. The implementation of the NPS score across an organisation cannot compensate for what the business leadership has failed to accomplish through their strategies, structures and processes. The people who could benefit from using the NPS in the daily running of their business to eliminate friction points between the business and its connected agents, sometimes lack the skills and capabilities to be able to use the NPS in a SMART way to run their operation.

Karl Sharicz

My organization has adopted NPS as a rallying metric to help us focus on what we consider to be one of the highest compliments a customer can bestow upon us--advocating or recommending us to others after having been convinced to remain loyal to us as a customer--which derives from their being first and foremost satisfied with the services we have provided to them. We view NPS in a general way—that serves as one indicator of success among other business metrics. More importantly, as others have noted, what drives the value of NPS for us is the underlying opportunities presented in the detailed analysis of why the customer is rating us as they have. Without this detail, NPS is just another number. When viewed as a system, employee compensation and NPS are part of a reinforcing loop. Customers experience what we are to them as an organization and reward us accordingly. In theory, if we are doing the right things and those things that the customer expects of us (and maybe more) we should not be afraid to use NPS as a guiding metric and that includes using it as a component of a bonus incentive compensation plan.

alex chilampam

I feel, NPS could be used. To avoid the abuse, third party has to do the survey. This avoids the bad part of manipulation. Now, the different aspects that decides on NPS and being blamed on the single point of contact has to be avoided with the list of questions ( not sure, how NPS works in terms of questions)

Karina Collenghi

I agree with both sides.

Depending on the industry you're working with, the results are easily manipuladed.

This has happened to our NPS study, when the manager from one of the stores we've been measuring, asked us to interview only the oldest people.

We had have already sent results, saying that the oldest ones are most likely to recomend his store, that's the reason he keeps manupulating our interviwers.

In the other side, the others 300 stores are working fine, and getting their results better from their work!!!

Niels K

Bad or indifferent customer service and high staff turnover in call centers are caused by adopting operational statistics, i.e call traffic metrics, as Key Value Indicators. With NPS we finally have a metric which is directly related to the organisations business model. Adopting it from front-line to senior management performance will drive staff turnover down, out sourcing down and improve Call Outcomes.LEGO has done just that with convincing results.
The fact that high customer satisfaction scores for years have been a sleeping pillow for Management and NPS acts as an alarm clock further underpins the argument, that NPS as a change agent can't be underestimated. Metrics related to performance pay have been falsified for years,think sales & revenue or Service Levels in call centers; that is no reason to delay implementation of NPS. Just remember to police the figures carefully. Imagine what would happen to customer service delivered out of India? Cheap yes, but woefully short on creating Promoters.
After 20 years as a call centre expert consultant I'm optimistic on what NPS will bring to the Service Delivery Industry.

Tamara

What kind of open-ended questions have you used to follow-up with clients regarding service provided by employees?

Your comments were great!

John

In customer service call centers in a large company like a cell phone company; how do you hold individual representatives responsible for a low score or high score when the comments left by a "Detractor" or a "Promoter" indicate it is the company itself they are happy or upset with. Is the value of the survey's comments to show the company what needs to change or to punish or praise a certain representative for something that may have nothing to do with their personal involvement in this process. Is praising a representative for having a high score due to a survey where the customer is happy with a particular product sold by the company which the representative had nothing to do with, a true and fair way to evaluate that particular representative's performance? These are concerns when NPS may go "too low" in some companies when setting accountability as to whom is really responsible for a low (or high) score. The value of the score and the worthiness of the comments gets lost in "blame" and "glory" games.

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