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I am currently sitting in a bed and breakfast in Edinburgh. The internet has not worked 90% of the time. They keep telling me that the internet is working for everyone else. Well it didn’t work for my son either and it didn’t work elsewhere in the building. They did tell me it worked for someone at breakfast. I was the only person who had their computer at breakfast and I assure you that it didn’t work. I posted my experience on the Internet. What could the effect be?
[I]t’s safe to assume that each negative comment neutralizes from three to ten positives. For example, consider the process you might go through in searching for a dentist when you move to a new town. If you hear one negative comment about a particular dentist from a trusted friend or colleague, how many positive comments will you need to hear before you select that dentist?
Are your organization’s customers Promoters, Passives, or Detractors? These concepts are fully explained in Harvard Business professor Frederick Reichheld’s groundbreaking book, The Ultimate Question[1] in which he demonstrates that organizations such as G.E., Intuit, Dell and Enterprise Rent-a-car use the Net Promoter Index to great advantage both in terms of profitability and customer loyalty.
Promoters are customers who give a company 9 or 10 ratings. They reported the highest repurchase rates by far, and they accounted for more than 80 percent of referrals.
Passives rate the company 7 or 8. This group repurchased and referral rates were a lot lower than those standpoint of promoters, often by 50 percent. Motivated more by inertia than by loyalty or enthusiasm, these customers may not defect ─ until somebody offers them a better deal.
Detractors gave a rating from 0 to 6. This groups accounts for more than 80 percent of negative word-of-mouth comments. Some of these customers may appear profitable from accounting, but their criticisms and attitudes diminish a company’s reputation, discourage new customers, and de-motivate employees. The suck the life out of a firm.
The Net Promoter Index is equal to the percentage of promoters minus the percentage of detractors.
The premise of this blog is that we live in a feedback rich world, but most organizations do not harvest the feedback that exists to help them move from good to great. “One stellar exception is Enterprise Rent-a-car which found that by measuring and consulting with their promoters “has helped Enterprise move to the top of the customer satisfaction by word of mouth rather than expensive advertizing.”
One of the world’s best examples of a detractor and the damage it can cause is David Carroll who had his guitar smashed by United Airlines. When United decided not to do anything to correct the situation, David Carroll wrote a song ─ “United Breaks Guitars” ─ which went viral when it was posted on YouTube and covered by every major media including TV, newspapers, radio and magazines. By the way, at last count this video was seen by 8.7 million people. Although this is an extreme example, the Internet has done wonders in giving customers power to rate their vendors ─ both good and bad.
Another example is when you go to a restaurant, you will invariably be asked how is or how was your meal, ninety-percent of the time, the answer is good or very good. Not much useful information here. Smart restaurants will ask their wait staff to ask one additional question and keep track of the answer. That question is: “What one thing could we have done to make you meal even better?” If the answer is the mashed potatoes could have been warmer, then Bingo, the restaurant can determine if this was a one off problem or something that is more systematic. If it is a one off problem, offer the customer a free dessert, if it is systematic, determine the root cause and fix it. This illustrates the ineffectiveness of a low-yield question, “How was your meal?” to which we almost always receive a good, or very good, vs. a High-yield question, “What is one thing we could do to make it better?”
Exercise: Think of an example of a low-yield question, such as “How was your meal?” that is asked regarding customer service in your organization and then develop a systematic way to gather pertinent information by asking a high-yield question to improve your customer service. For example, at Enterprise you will be asked the following three short questions when you drop off your car at the end of the rental:
How was our service?
What could we have done to make your experience better?
If there was a problem, what can we do to make it up to you?
Fred Reichheld, the author of The Ultimate Question recommends, “Firing people who demonstrate the wrong values can be as important as hiring those with the right values.”( p144) He also recommends that organizations record what their promoters say and “[I]ncorporate this learning directly into marketing messages and advertising copy. It is obviously much more efficient to have promoters write the ad copy than to pay an ad agency; but more important, these customers know the right message to communicate. One final benefit of asking promoters to express what they would tell a friend is that, once they articulate the answer, they are move likely to relay it to a friend just because it’s on the tip of their tongue and the top of their mind.”
