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Book Review: The Ultimate Question

Uq SmThe business world is filled with an overwhelming number of questions and uncertainties. As statisticians analyze the uncertainties, the number of questions they ask seems to grow exponentially.

Business consultant and author Fred Reichheld thinks he has found the question that all companies need to ask in order to determine just how loyal their customers are – and he has humbly called it the ultimate question.

Reichheld talks about this ultimate question and what it should mean to you and your business in in his 200 page book entitled The Ultimate Question: Driving Good Profits and True Growth. The book, first published in 2006 by Harvard Business School Press, primarily focuses on three key areas: the “ultimate question,” a scoring method called “Net Promoter,” and the importance of “good profits.”

The “ultimate question” is the simple and common question of “How likely are you to recommend Company X to a friend or colleague?”. Net Promoter is a scoring method that subtracts the proportion of detractors from the proportion of promoters. Good profits are simply profits that come from people that actually want to use your products and services (as opposed to those who might be locked into contractors or dissatisfied for one reason or another).

Like many things in customer service, the premise behind the book and the Net Promoter concept is laughably simple: if you deliver an experience that makes people genuinely want to recommend your company to their friends, family, or colleagues, you’re going to grow. Just like many business books, The Ultimate Question takes this relatively simple concept and adds strategically placed healthy servings of jargon, buzzwords, and acronyms to help justify the three hours and $20 that the book will cost. After the first 50 pages, the book starts to drag on and get redundant, but there are plenty of examples and tidbits to make it worth reading until the end.

With that said, I’d still recommend reading the book because it clearly articulates some very important aspects of business and customer service. Recihheld’s core points make sense and the examples he provides are interesting. After reading the book, any competent customer service manager or executive can easily conduct a Net Promoter survey and make use of the results. He clearly explains what Net Promoter is, why it should matter to your business, and how to make it work. Even though I don’t agree with Recihheld’s view that the “would you recommend” question is the only question that needs to be asked (I think you need more information than that), I still think that the “would you recommend” question is a great question to ask and that Net Promoter has its merits.

Net Promoter isn’t exactly new to the business world and that may very well be one of its biggest strengths. A whole host of companies in a variety of industries make use of Net Promoter and many of them are fairly transparent about their scores. It’s interesting to see what your Net Promoter score is and then compare that to some of the big companies in your industry. The average Net Promoter score is around 10 and it’s possible to have a score anywhere between -100 and 100.

I’ve conducted Net Promoter surveys for several companies and have always found the results to be useful when they are coupled with other questions. Net Promoter doesn’t tell you everything, but there is really very little to lose in asking your customers how likely they are to recommend your company to a friend or colleague. You might be in for a rude awakening, but you’ll almost certainly come out of the process knowing more than you did before. Once you have the results from your first Net Promoter survey, you’ll be faced with the true ultimate question, the question of how to improve.

Bottomline: Despite being slightly redundant, The Ultimate Question clearly articulates the importance of and how to measure customer loyalty. You may not agree with all of Reichheld’s points, but a majority of them make sense and are applicable to almost any business.

Pros: The book fully explains Net Promoter and why it matters. It provides a plethora of advice and action items that managers and executives can use to start tracking customer loyalty.

Cons: Some of them Reichheld’s methods are more academic than they are practical and the second half of book gets annoyingly redundant.

Interested? You can purchase the book on Amazon.com for about $20. You can also see some of my other posts about Net Promoter here.

Customer Service Checklist: Launching a Product

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Many companies, especially startups, move very quickly. They’re always in the process of developing and launching new products, hiring new people, and so on and so forth. They stay very busy constantly and seem to never have enough time to do all that they need to do.

One of the things that these quickly moving companies usually don’t have enough time to do is properly launch products from a customer service perspective.  They get the product ready in terms of development, marketing, etc., but they never stop to tell customer service and the first time customer service hears about it is when customers start calling or emailing.

Needless to say, this isn’t the best way to do it. It creates a lot of confusion, is bad for morale, and upsets customers. Having a more formalized process that keeps customer service in mind is a much better way to handle product launches.

These are some things you’ll want to keep in mind before launching a product:

  1. Have customer service representatives (and their managers) been made aware of the product by product management? Are they familiar with the products, features, and how they work?
  2. Have they been certified on the product, or at least trained on it? This includes not only using the product, but supporting it as well.
  3. Has marketing given the customer service department a heads up about promotions, discounts, special pricing, and expected volume?
  4. Has engineering or product development briefed the customer service department on expected problems, known bugs, possible areas of concern, etc.?
  5. Are there tools in place that customer service representatives can use to support the product?
  6. Have knowledge bases and other documentation (internal and external) sites been updated / created as necessary?
  7. Has the corporate and/or product web site been updated as necessary?
  8. Have existing customers that might be interested in this product been made aware of its launch?

These eight things are just a start. There is obviously plenty more that should be done and what needs to be done varies from product-to-product and from company-to-company. If a checklist and a process exists, it’s far better than nothing. Creating a process lets companies work through it like it’s second nature. Product launches can be consistent and most importantly, they can go smoothly.

Measuring Customer Satisfaction for Less than $250

Uq
I work with a small technology company that has a reputation for being a great customer service company. The company is growing fairly quickly, and as a result of that, they’re hiring more and more people. Their growth is great (their rate of growth is manageable, so they don’t really have many growing pains), but as they hire more people, it becomes harder for the company’s founders to watch the level of customer service. As the company grows, all the employees aren’t as knowledgeable as the first couple of employees and the founders.

To help see how they’re doing, the company decided to start surveying their customers. They started with a simple quarterly satisfaction (using Net Promoter) survey and are starting to do a ticket survey that is sent out after each ticket is marked as resolved in their help desk. The company managed to do it all for less than $250, too. Here is how they did it (with my help, but they could have done it themselves without any problems):

1) I already had a copy, but most people will need to buy The Ultimate Question: Driving Good Profits and True Growth by Fred Reichheld. It is a pretty good, 200 page book about measuring customer loyalty and satisfaction using the idea of Net Promoter. Total cost: $20

2) Purchased and installed the Lite Version of iSalient (survey software). The software is pretty user friendly – it only took me (a fairly non-technical person) about an hour to fully install and customize. Total cost: $197

The best part of this? It is only a one time cost. They can run this survey any number of times and can setup several other surveys to run as well. They already have the software and the knowledge. There is cheaper survey software (even free software) out there, but this company had already used and liked iSalient. A lot of the software is leasable or setup where you only have to pay by the number of respondents. This makes things pretty cost effective as well. $250 isn’t that much for any company with a couple of employees. Having a good idea about the level of service you’re providing and how happy your customers are is well worth the time and the financial investment involved with setting up some basic survey software and processes.

Take an hour, your credit card, and start measuring your customer satisfaction. You’ll learn a lot about your customer service, your customers, and your company.

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Increase in Elevations

I read about a company that saw an increase in the number of elevations they were seeing. More and more calls were being elevated from level 1 to level 2. The reason, though, was mysterious to the company. They weren’t sure why the calls were being elevated and why level 1 technicians were unable to resolve the issues. Their question and concern was how to find this out and what is truly the cause versus what seems to be the cause. Of course, there are a lot of potential causes and potential solutions:

Have you asked the representatives?
A great place to start is by asking the representatives why they are elevating calls. A lot of them will be quite honest about why they’re elevating calls, especially if you make it clear what they say won’t harm them in anyway. If necessary, do an anonymous survey about why calls are being elevated. More often than not, representatives want to provide their feedback and because of the nature of their job, they know (and are) the frontlines.

Any trends?
Are there trends in the types of issues that are elevated? If you can identify clear trends (i. e. there are 50% more elevations between midnight and 8 AM), you can more accurately judge what is causing the elevations (the night shift is not as good as the day shift).
Product problem.
Never dismiss the potential of an actual problem or defect with the product or service. If a lot of customers are calling up about the same issue consistently, it is probably something wrong with the product.

Consider the talent pool.
Was the standard lowered on the type of level 1 representatives that were hired? Are new level 1 agents being paid less than they were 6 months ago? Did company Y (a competitor of company X) open up a call center 10 minutes away (and they could pay more)? The talent pool and any significant changes in it will more than likely change the number of elevations that occur.

Procedures in place?
Are call times limited? Are elevations factored into the customer service representative ratings? If representatives are elevating calls to get customers off the phone, there is obviously a flaw in the system. Make sure there are no policies or procedures in place that would actually encourage unnecessary elevations. You never want to put a policy or procedure in place that discourages elevations that are actually called for, but elevations should not be done frivolously.

These are probably some great ways to start. It never hurts to ask (customers or employees) and it never hurts to ask yourself the tough questions, either. See what you’re doing versus what you should be doing and hopefully, what needs to be done will be clear.

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Improve Customer Retention with Documentation

Cs3
When I wrote my post about moving help outside of the help center, I promised to write a post about one of the main benefits of actually moving hep outside of the help center (besides the logical conclusion that customers will actually use the documentation more). The second benefit (and perhaps more importantly) is that help outside of the help center can teach customers how to use parts of your software or service that they may not be familiar with already. This is very valuable for a number of reasons.

The more they use it, the better.
If you have a software product that’s very powerful (I like to use Photoshop as an example), then there is a lot of value in teaching customers how to get the most out of it. If they know how to get the most out of your product, they are more likely to stay with your company and continue using your product or service. They get more attached, more used to it, etc. — all things that can result in higher repeat sale rates.

It helps branding.
Customers like to know how to get the most out of things they have paid for or invested time in. When companies take the time to write up documentation and helpful tips that customers actually can get use out of, it can help branding for both the company and the product.

It saves on support costs.
The more customers know about how to use your product or service, the fewer questions they have to ask. The fewer questions that are asked, the lower the support costs. The math is dead simple and it shows how much sense it makes to actually invest time and money in documentation.

It forms a competitive advantage.
Your marketing department can work very hard touting certain features of your software or service, but it is your current customers that will create your software or service’s reputation. If you have a full featured CRM product, but it is really well known for its billing application, your product may be described as a billing focused CRM by fellow customers. If your help documentation encourages customers to use other features of that same product, you can gain the reputation of a great CRM overall instead of just a great billing CRM.

These reasons, along with those mentioned in the first post, should hopefully make it clear that it makes sense to bring help outside of the help center to some degree. There is a lot customers can learn from engaging with, instead of just reading, the product or service that your company offers. Interactivity as one of several option is a lot better than just static text as the only option.

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The Star System for Customers

5-Star
I’ve written about firing your customers before. It is a topic that interests a lot of companies, especially smaller ones that don’t have the time to deal with really annoying customers on a constant basis. A reader made an interesting suggestion about how to deal with the problem, though. He suggested using what he described as a star system; essentially, you rate customers on some sort of fairly objective basis (i. e. 1 to 5 stars). The rating is based on their value as a customer – how often they buy, what they buy, who they’re referred, how often the company has screwed up with them in the past, if they are an active customer (i. e. lots of feedback, etc.). Customers that meet certain criteria are given a star rating.

Say I am a customer of company X and I’m a good customer – I buy their most expensive products, I visit their store and buy something at least once a week, I refer others, I have a store credit card, they have screwed up one or two times and I am still a customer, I talk to the store manager every now and then, etc. Basically, I am a good customer who helps the company / store. I would be a 5 star customer. If, on the other hand, I was a customer of a services company and used their lowest end plan, called them 3 times a day, never referred anyone, and have canceled twice before, that would make a 1 star customer.

The idea behind the system is that no one is ever really fired. However, the 1 star customer is not given any extra attention when he threatens to cancel. To that 1 star customer, the company offers little to no rebates, credits, future discounts, etc. When that 1 star customer calls and complains that his hosted service was unavailable for two hours, he gets an apology. The 5 star customer gets an apology, plus two months of free service. They may even get a call from their account manager offering a second apology. As the reader who emailed me suggested, they “get the red carpet rolled out every time they call, visit, etc.”

This motivates the less profitable (and/or more annoying customers) to take their business elsewhere, but encourages the more profitable (and/or less annoying) customers to stay with your company. The general idea is good and I think it is something that a lot of companies use and keep in mind when they are deciding what to do for a particular customer. It is more formalized at some companies than it is at others, but the general idea is very similar.

Something that you have to be careful about, though, is how your algorithm works. It should be fairly objective (though I think you should be able to add some subjective points to it as well), but you have to keep certain situations in mind. Say I am a 5 star customer and I refer my neighbor or best friend to your company. He turns out to be cheap and annoying (a 1 star customer). If you don’t give him the same great service that I’m used to, that could be a problem and reflect negatively upon your company. You may have to tweak the algorithm to be setup so that if a 4 star customer refers someone, the new customer will never go below 2 stars, etc.

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Help outside of the help section.

ipodI know this is the second time this week I’ve written about Apple, but I actually had this idea in the queue before I even ordered my computer. I had also talked about a very similar idea with an executive from a company just a few days before I got this particular post idea.

If you use an iPod (like I do – mine looks a lot like the one to the right), you may know about the “On The Go” playlist feature. A lot of iPod users don’t use it (I rarely do), but if you have ever navigated to the menu and look at the playlist when it’s empty, it does something interesting.

What the iPod does that is so interesting (to an extent) is display help documentation about how to use the on the go playlist feature. It actually makes a tremendous amount of sense to display how to use the feature when it isn’t being used. What would Apple put there otherwise – probably something saying “No songs in this playlist.” or something stupid. When you add songs to your on the go playlist, the help message goes away.

This entire aspect of help tips and information within an actual program (or in this case, an interface) and more generally, outside of the help section. is a great idea. More and more products are starting to implement the help within the product idea and that is because it makes so much sense. Customers seem to prefer help within the actual software or interface because they then don’t have to go out of their way to navigate to a separate help section.

Something companies should also do is consider having more help information show when customers just start using a product or service. Then, as they use the features more and get more accustomed to the nuances of the software, the tips and information slowly disappears. It is a classy way to help new users without really forcing it upon them.

I am going to write a post next week about one of the main benefits of moving help outside of the help section: teaching customers how to use parts of your software or service that they may not be familiar with already.

Think about where you can put tips and similar help within your software or within the interface of the product you design. Moving help outside of the help section makes a lot of sense – your customers will probably use it more, it will probably be easier for most customers to understand, and it can teach customers how to use products and features they may not use.

Get on the Frontlines

call_center A lot of executives seem out of touch with what actually happens on the frontlines of their customer service department. When executives are out of touch (some are more removed than others), it creates not only a cultural problem, but a problem of the ability to keep frontline employees in mind when making decisions.

An executive’s job is not to answer the phones and as such, they shouldn’t be expected to do so on a daily basis. However, it is an executive’s job to be able to relate to the employees he or she is in charge of. The reality of the corporate world is that the decisions executives make usually have a very significant affect on the frontline employees. The changes that come from the top affect those on the bottom. It isn’t fair to those providing the actual service to customers when executives are making uninformed decisions.

The problem in a lot of businesses and with a lot of executives is that they assume. They assume they know the frontlines of a call center is like and they assume they know what challenges individual employees are facing. It sometimes takes more than surveys, more than manager reviews, and more than consultants to get a thorough understanding, though. Sometimes, it takes sitting in a cubicle and answering the phones.

When an executive spends a couple of hours or even a full day answering phones or replying to emails, he or she can learn a lot about what the frontline employees experience on a day to day basis.

The phones may be bad, the chairs could be uncomfortable, the computers are too slow, the Internet keeps crashing, etc. Suddenly, the complaints on the “other comments” part of the employee satisfaction survey start to make more sense. On the other hand, the experience of helping customers fix a problem or hearing positive feedback about the company’s product is rewarding. It gives executives yet another (very valuable) perspective.

Make it a point to schedule a few hours, or even a full day, to sit in your call center and do what your frontline employees do on a daily basis. I guarantee you that you will learn a lot.

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