NET PROMOTER SYSTEMSM:
EMPLOYEE INSPIRATION:How to Create Energy that Drives Better Customer OutcomesNovember 1st, 2016
Net Promoter®, NPS®, and the NPS-related emoticons are registered service marks, and Net Promoter Score SM and Net Promoter SystemSM are service marks, of Bain & Company, Inc., Satmetrix Systems, Inc. and Fred Reichheld.
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Housekeeping
3This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent
INTRODUCTIONS
• Head of Americas Customer Strategy & Marketing Practice
• Leader in Financial Services practice with a focus on B2B lending, commercial insurance and payments
• Expertise in:- Customer loyalty - Net Promoter System- Employee Engagement- Business unit strategy
• Previously with Dell Computer and Price Waterhouse Coopers
DARCI DARNELLPARTNER, CHICAGO
SARAH DEY BURTONSR. DIRECTORSAN FRANCISCO
• Sr. Director, Customer Strategy & Marketing Practice Area• Expertise in:
- Customer loyalty- Employee Engagement - Brand and Marketing Strategy- Design thinking
• Worked in retail industry for 9 years focused on Corporate Strategy, Marketing and Consumer Insights
• Manage a global team who all work remotely (not in an office) so am challenged daily with how to inspire my team with those constraints
4This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent
TOPICS FOR TODAY
•Context for discussion: Bain & Co. thought leadership in customer advocacy
•Definition of engagement and the best ways to build an understanding of levels of engagement
•Engagement drivers and employee experience
•Engagement system and Bain’s differentiated approach
5This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent
BAIN & COMPANY’S PERSPECTIVE ON LOYALTY IS SHAPED BY YEARS OF EXPERIENCE
Industries: • Financial services • Consumer products• Retail• Technology• Air transportation• Telecom• Industrial goods
& services• Other
Engagement focus:• Customer segmentation & value
proposition• Customer acquisition• Share of wallet
growth• Customer
experiencere-design
• Loyalty & retention
• Differentiated IP focused on system vs metric and customer centric culture transformation
• Bain ‘wrote the book’ on loyalty
• Forum for senior executives from leading companies to learn from, share, and enhance best practices
• Sample of current forum members:
• Publish in top business journals
• Net Promoter
• Loyalty economics
• Moments of Truth approach
• Inner/Outer loop processes & mechanisms (closed learning loops)
• Employee Inspiration
• Results Delivery
• Digital transformation
• Episode/Journey analytics
• Design thinking
• Both Brain customer insights
> 8,900 customer strategy & marketing related projects…
Source: Bain & Company experience center a/o July 2015
CONTEXT
Client
enga
gemen
ts
Research &
Publishing
Collaboration Prove
n Too
ls
Loyalty & NPS
perspective
& expe
rtise
• Dedicated practice/Center of Excellence with global experts
• In-house Advanced Analytics group
• Net promoter system website:http://www.netpromotersystem.com
6This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent
0
100
200
300
400
Growth (indexed)
0 5 10 15 20Years
Loyalty Leader
Average
>2xCAGR
15% Lower
0
20
40
60
80
100%
Average Loyalty Leader
Costs
LOYALTY LEADERS OUTPERFORM ON BOTH GROWTH AND COST
CONTEXT
7This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent
How likely are you to recommend our product/service to a friend or family?
0-6
7-8
9-10
Extremelylikely
Extremelyunlikely
% Promoters
Net Promoter Score SM (NPS ®)
MINUS
% Detractors
NET PROMOTER BEGAN AS A POWERFUL AND SIMPLE METRIX TO MEASURE CUSTOMER LOYALTY
CONTEXT
8This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent
RELIABLE, TRUSTED CURRENCY/METRICNPS/eNPS; common language; loyalty economics
SUSTAINED LEADERSHIP COMMITMENTStrategic priority; inspirational behaviors that earn customer and employee advocacy; sponsorship spine
EMPLOYEE/TEAM ENVIRONMENT FOCUSED ON LOYALTYSafe environment, effective organization, right tools and training, valued fairly
ROBUST OPERATIONAL AND ANALYTIC INFRASTRUCTURE
IT EVOLVED INTO A SYSTEM: MECHANISMS TO SUPPORT A CULTURE OF CUSTOMER CENTRICITY
FEEDBACK, LEARNING AND IMPROVEMENT
Individual learning, behavior
change, and connection with
customers
INNERLOOP
Root cause analysis, prioritization & implementation of
structural improvements
OUTERLOOP
HUDDLE
Teamproblem-solving, issue escalation,
mutual commitment
OUR FOCUS TODAY
CONTEXT
9This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent
THE PROMOTER(SM) FLYWHEEL: EMPLOYEE AND CUSTOMER ADVOCACY TOGETHER FUEL GROWTH
Note: The Promoter Flywheel is a service mark of Bain & Company, Inc.
You need highly engaged employees to deliver the differentiated experiences required to earn customer advocacy
STAY HERE!RECOMMEND!
WORK HERE! STAY HERE!
PROFITABLE, SUSTAINABLE
ORGANICGROWTH
CONTEXT
10This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent
COMPANIES WITH ENGAGED EMPLOYEES DELIVER SUPERIOR FINANCIAL RESULTS
… AND IMPROVE PROFITABILITYCOMPANIES WITH HIGHER ENGAGEMENT GROW FASTER …
0
1
2
3
4
5
Low employee engagement
1x
High employee engagement
Up to 2.5x
Revenue growth
Source: Hay Group Insight “Engaging and Enabling Employees to Improve Performance Outcomes” (2009 Hay Group global normative database); Russell Investment Group and Great Place to Work Institute (98-08);
• More customer loyalty- Higher average revenue per
customer- More customer referrals- Lower customer churn
Revenue
Cost
• More efficiency- Increased productivity- Lower absenteeism
• Reduced attrition- Lower hiring and training- Less on-boarding
• And for some industries: - Less shrinkage- Higher quality- Less safety incidents
CONTEXT
11
0
10
20
30
40Employee NPS
Manag
emen
t*
33
Comm
unica
tions
*
26
Human
reso
urce
s*
21
Finan
ce
14
Marke
ting
11
Sales
11
Purch
asing
10
IT
8
Prod
uctio
n
6
Serv
ice
6
Adm
inistr
ation
*
4
Function type
-20
0
20
40
60
80Employee NPS
0
62
1
39
2
31
3
16
4
15
5
4
6
-2
7
-5
Hierarchy level (0=highest)
ENGAGEMENT LEVELS ARE OFTEN LOWEST FOR THOSE WHO INTERACT WITH CUSTOMERS
*Sample size <600Source: Netsurvey/Bain analysis, September 2012 (n=27,628); Netsurvey/Bain analysis, September 2012 (n=130,000+)
FUNCTIONS CLOSEST TO THE CUSTOMER HAVE LOW ENGAGEMENT
FURTHER DOWN IN ORGANIZATION, LOWER THE ENGAGEMENT
CONTEXT
12This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent
THE RELATIONSHIP BETWEEN CUSTOMERS & EMPLOYEES
CUSTOMER NPS 75%
?
EMPLOYEE NPS -10%???
CONTEXT
13This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent
YOU KNOW THEM WHEN YOU SEE THEM!
The employees who make the highest impact on your business exhibit energy, enthusiasm and creativity to
improve the lives of customers and colleagues, supporting the mission of the company
Benefits:•Deeper customer loyalty•Higher productivity•More innovation•Better employee recruiting and retention•Lower costs•Faster, more profitable growth
DEFNIITION
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent
14This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent
EMPOWERING AND DRIVING CHANGE AT THE FRONT LINE: LEADING BY LETTING GO
Source: The Ultimate Question 2.0; Fortune; American Express website
High employee turnover,stalled customer satisfaction
20,000 employees in 24 countries
• Scripts for consistency, quality, and speed
• Average handling time for unit cost targets
• Call quality monitoring
SITUATION LEADING BY LETTING GO
FOUR LEVERS RESULTS
• “Telephone Service Center Reps” became “Customer Care Professionals” with increased pay and schedule flexibility
• Call center scripts and average handling time limits eliminated• Hiring criteria changed
to emphasize hospitality and values versus technical skills
• Focused Customer Care Professionals on a single metric: Customer NPS
• Clear, simple goal that resonates
• Freedom within a framework (guardrails)
• Coaching and support
• High-velocity closed-loop feedback
• NPS doubled• They won the JD Power Award for service 5 years in a row
• Employee attrition cut in half• Higher profitability:• Costs came down 10%/year as % of revenue:
- Fewer dial transfers- Lower average handling time- Fewer repeat calls – higher first contact resolution
15This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent
DRIVERS
CREATING AN INSPIRED WORKFORCE DEMANDS THAT YOU MEET MULTIPLE NEEDS
“The Job”“The Team”“The Company”
LEGEND
Source: Bain & Company
EMPLOYEE SATISFACTION
EMPLOYEE INSPIRATION
Differentiators: “Inspiring energy, enthusiasm, and
creativity”
Purpose Fit Autonomy Affiliation
The foundation: “Meeting basic needs”
Valued andsupported Growth Have what
I needWork
environment
LeadershipInspiration
Comp/Promotion
16This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent
BAIN’S NET PROMOTER INSPIRATION SYSTEM EMPLOYS FOUR PRIMARY MECHANISMS
• Prepare: Launch a short, confidential survey to employees preceding a team huddle (at least monthly)
• Feedback: Deliver customized results to team leaders
• Engage: Conduct team-level dialogues with survey feedback as key input
• Action: Problem solve and agree on actions to address local issues
• Escalate: Identify systemic issues to be escalated
• Tier: Each management level huddles and addresses issues within authority
• Prioritize: Central team prioritizes systemic issues for “move the needle” initiatives based on clear understanding of impact and value
• Communicate: Actions communicated back
TEAM HUDDLE OUTER LOOP
ANNUAL EMPLOYEE SURVEY
• Gauge “relationship”: Assess progress on employee engagement
• Identify systemic issues: Identify areas of focus for central team initiatives based on aggregate view of the employee experience, as well as trends across groups
INNER LOOP
SYSTEM
17This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent
HUDDLES SUPPORT AN AT CAUSE COLLABORATIVE CULTURE FOCUSED ON REALIZING THE MISSION
ISSUES REQUIRING MORE SUPPORT ARE ESCALATEDINTO THE OUTER LOOP
EMPLOYEES COMMIT TO INDIVIDUAL AND TEAM ACTIONS
THE TEAM COMES TOGETHER TO DISCUSS ISSUES AND OPPORTUNITIES
ANONYMOUS INPUT PUTS ISSUES AND OPPORTUNITIES ON THE TABLE
RESULTS: Enthusiastic employees work together to improve their job effectiveness, team environment, and personal experience
SYSTEM
18This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent
BEST INDICATOR OF INSPIRATION ‘MY JOB INSPIRES ME’ AND A SAMPLE OF QUESTIONS TO PROBE
0.0
0.2
0.4
0.6
0.8
1.0
Predictive value vs. Bain Engagement Index
My job inspires me
0.76
I feel inspired, motivated, and valued
at work
0.58
Satisfaction with
company as a
place to work
0.47
Likelihood to recommend
company
0.40
I very often "go the extra mile" at
work
0.32
Source: Bain Employee Engagement Survey, November 2015 (n=2482)
BEST INDICATORS OF ENERGY, ENTHUSIASM & CREATIVITY
OVERALL INSPIRATION
ACTION ORIENTED
TEAM AFFILIATION
• “My job inspires me”- Why?
• “I would recommend my company as a place to work to friends or family members”- Why?
• “I would recommend my company’s products and services to friends or family members”- Why?
• What is one thing we could do differently to serve our customers better?
• What is getting in the way of doing a great job today?
• “We are making progress as a team towards a meaningful goal”
• What team member contributed most to our team’s effectiveness this week?
SYSTEM
19This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent
OUR APPROACH IS DIFFERENT: FOCUSED ON CUSTOMER AND BUSINESS OUTCOMES
ANNUAL EMPLOYEE SURVEY – administer a large survey once per year with limited focus on engagement in the interim
CUSTOMER CENTRIC ENGAGEMENT SYSTEM – a process that drives continuous improvement of employee engagement as a means to deliver better customer outcomes
ORGANIZATION-FOCUSED – mostly large organizational initiatives vs. a focus on teams, individuals and their roles
INDIVIDUAL-FOCUSED – combine large initiatives with a parallel focus on driving inspiration at the individual level
LIMITED ACTIONABILITY – over-emphasis on survey results vs. specific actions for leaders and teams
INSIGHTS TO DRIVE ACTION – provide clear insights on where to focus efforts and the support to embed employee engagement in operating system
FOCUS ON SATISFACTION – measure how happy employees are with the company and the work environment, with limited ability to tie to business outcomes
FOCUS ON INSPIRATION – measure the energy, enthusiasm, and creativity that your employees bring to work, leading to productivity and innovation
OWNED BY CENTER/HR – attempt to drive top-down change, making it difficult to empower and instill a sense of ownership in line leadership
PARTNER HR WITH LINE LEADERSHIP –empower line leadership and employees to bring bottom-up change, holding leaders accountable for results they control
COMMON APPROACH BAIN APPROACH
20This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent
HOW EFFECTIVE IS YOUR EMPLOYEE INSPIRATION SYSTEM?
Where does employee inspiration fit in the company’s strategic agenda? Is it a top 5 priority?1
Does senior management know where the biggest opportunity exists to improve levels of inspiration, and how to drive it?2
Who has accountability for increasing employee inspiration?3
Do supervisors have the right training and information to hold regular, productive dialogues with employees, and act on the learnings?4
Are there procedures, processes and mechanisms in place for putting employees in charge of their own work environment?5
Is inspiration a metric or a system? And is progress tracked? 6
[email protected]@bain.com
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THANK YOU!