I have been a fan of Fredrick Reichheld since the early 1990’s and my days in the IT industry helping to set up Tektronix’s colour printer division in Europe.
For me the key to Tek’s success in a business then dominated by players with bigger budgets was to focus on channel and customer loyalty. Now Fred and his team have taken loyalty to the next level with the Net Promoter Score. This is being taken up by large corporations but I thought I would share with you an experience which embodies many of the NPS key principles but applied to a smaller business.
A couple of years ago I was asked by the local region of a UK wide business membership organisation to help them with a problem of declining recruitment and retention. They had tried all sorts of marketing and promotional activity and proudly announced they have over 30 services they could offer members.
My first action was to identify all the internal stakeholders. I initially based that upon management input but I quickly discovered that there were a few employees who were running or involved with membership service programmes and so had valuable input. (Note: As to be expect management did not know everything that happened at the ‘coal face’ but when making strategic decisions such a situation can be dangerous!)
My first task was to make sure the stakeholder team had a clear understanding of the issues and reason for action. As to be expected some were more supportive than others but at least everyone knew what was going on and why. In any change management project communication is critical. The first three questions I asked the stakeholder team at our first project meeting were:
· What were the membership benefits?
· How do the members rank them in terms of value to them?
· What programmes do we have to enable members to introduce or recruit a friend?
The first question provoked some discussion as there was not one ‘master’ document readily available that summarised everything. At the meeting we thrashed out a single sheet which listed them all. For the second question there was no agreed definitive answer. So I asked which services were most used and least used. Whilst this may not be 100% accurate because members may not be aware of all the services it is a reasonable benchmark. A few answers were forthcoming but there was no general agreement. To the third question the answer was ‘nothing’. The company had fallen into the ‘business as usual’ trap. People were working really hard focussing on the ‘day-to-day’ job as declining membership, falling recruitment and ‘budget reduction by a thousand cuts’ had become a regular pattern.
I put a proposal to the board. Let’s ask the members what they value via an online survey and ‘face-to-face’ meetings. We prepared a micro-site where we listed all the services provided with a questionnaire which asked people to feed back on why they joined, what they valued, what services we should drop and what extra we should offer and a space for any other comments. We also asked how many would recommend membership to other business people. We offered a bottle of champagne to the name of a person participating that we pulled out the hat (no big budgets for prizes and to be honest most people participated because they wanted to not because of a prize). Out of 3.5k members we had over 350 responses. Of those 20% (70) had made suggestions on what we could do to re-engage with them and other members. Most simply felt unloved and neglected except at annual renewal time. They felt that added insult to injury in many ways. The truth was that 15 people (just over 4% of all responding) said they would recommend membership. 70 said they would not (20%) and the rest did not answer. We responded to everyone and promised to keep them updated on our progress and plans.
We then held a series of breakfast and lunch roundtables in multiple locations so that we met directly almost 100 members. Busy business people were willing to take the time out of their diaries to share issues and concerns with us. The feedback was direct – sometimes painfully so as it reflected a lot of frustration and some anger. A few said they would be leaving membership anyway and ‘broadsided’ us. It was all valuable information. Many following the programme and meeting were going to give the organisation one more chance to improve and see what would happened after the meetings. I cannot remember meeting anyone directly who would recommend any friends to join. In Fred’s Net Promoter Score methodology it was a disaster!
Now came the tough part. The organisation was offering services that were not wanted and also failing to provide others that were being asked for. Change is never easy but with hard work over the next six months a set of service programmes were put in place that met most of the members concerns. Those least popular services were phased out after careful consultation with those members who were using them. This gave the organisation the budget and time to enhance and launch new services meeting membership needs. What was important was to ensure a few fast track programmes were rolled out and that the members – especially those who participated in the survey and meetings – were kept updated at all times.
So what was the result? The survey was embedded in to the organisations ongoing communication and consultation programmes. Three years later the organisation membership retention rates have been reduced by over 80%. Recruitment is at its highest levels for many years. They also have an active and successful ‘Introduce a friend’ programme. There are still issues to be worked through but the basis for long term business success is there. The icing on the cake is that the organisation was the number 1 region in the UK last year thanks to all the ongoing hard work of the team.
So what was the learning?
- Listen to your customers. Give them a way to talk and they will. You may not like what you hear but that is part of the process
- Ensure the stakeholder team is inclusive and has authority to make decisions
- Act on the feedback you get
- Look for some quick wins and keep working on longer term changes too
- Ensure you keep customers/members updated on progress – don’t initially engage and then go quiet. Keep the contact and momentum up
Today I would be using social media tools to help me create and maintain a membership community. I would put the questionaire online and let everyone openly comment if they wanted and share with others in the community.