Net Promoter System in Telstra

INDEX• PURPOSE• BACKGROUND• HOW IT WORKS• IMPACT• ADVANTAGES• DISADVANTAGES• FURTHER STRATEGIES• IMPACT ON EMPLOYEES• COMPANY WITH NPS• REFERENCE

Purpose• To gain an overview of NPS• To see how NPS has been applied into Telstra• To illustrate advantages and disadvantages• To give an idea of NPS impacting on Employees and Business• To deliver the message of the NPS for the future

Background• Telstra has commenced NPS as a strategy for improving

customer advocacy in 2013 after David Thodey was promoted as CEO

• Research released that canvassed consumers in 27 countries and 20 different industries found that 66 percent of consumers switched companies during 2011 as a result of poor customer service.

• The new standards will apply to more than 2000 resellers and 350 Telstra-branded shops across the country.

• Telstra will pay its retailers not only sales commissions, but also for their customer service performance.

Movement on improving customer’s satisfaction of Telstra• Indeed, the last time the telco’s Net Promoter score was

measured in 2006, it was a woeful -44.• After a renewed focus on the customer. Recent research found

customer satisfaction among Telstra mobile customers was stable across 2011, with 65 percent of customers “very satisfied” – still trailing the industry average, but a significant improvement over 2006.

What is NPS• Net Promoter System is much more than a measurement tool.• Important element of their strategy to drive customer

advocacy. • Aim is to deliver an exciting loyalty program which focuses on

offering the things that matter most to our customers and employees

• Telstra is asking thousands of resellers and branded retail shops to subscribe to tough new customer service standards, and is offering cash bonuses to stores that reach performance hurdles.

Measurement of NPS• NPS measures the ratio of advocates to detractors on a scale

of one to 10.• Score of either nine or 10 are classed as advocates. • Either seven or eight are classified as passive• Those who score the group between zero and six are

considered to be detractors.

NPS Diagram

Expectation on NPS• Competitive benchmark • They seek feedback not only from their own customers but also

from their competitors’ customers. • Competitive benchmark Net Promoter Scores provide an

objective and fair basis for comparing your company’s feedback to the feedback your competitors earn.

• Relationship• NPS asks how likely they would be to recommend the company to

friends or colleagues, and why. • Feedback like this provides an overall assessment of the relationship

between company and customer. • It provides input to account teams, relationship managers and

others so they can make decisions and take actions to improve selling, servicing, product design, pricing or other policies, based on what they learn.

• Experience. • NPS practitioners ask for feedback from their own customers after

selected experiences, transactions or episodes. • For example, they might do so after the purchase of a product or an

interaction over the phone. This type of feedback focuses on understanding how customers’ experiences at those moments influenced their overall loyalty so you can figure out ways to improve those experiences.

How it works

• NPS is measured every time a customer calls Telstra. We take over 50 million calls a year, and last year we conducted 10 million surveys to generate our NPS. • We are determined to improve that NPS rating, Relating

even linked to our staff short-term incentive plan. The entire business must work towards improving our NPS rating and ensuring that the customer experience is as good as it can possibly be.

How it works

Advantage• Simplicity• Net Promoter surveys typically require just two or three

questions, keeping the burden on the customer low. • The Net Promoter score is a single number that can be

tracked from week to week and month to month, just like net profit - by business line, by store, by product, even by individual customer-service rep.

• Ease of use• A company can conduct its NPS® surveys by phone, e-mail or

Web• It can compile and post scores quickly, so that people can see

the results of their performance in a timely fashion

Advantage• Quick follow-up• NPS practitioners typically share customer feedback very quickly

after it is received. • They quickly ask managers or frontline employees to contact every

customer who gives an unfavorable score (a detractor), to identify the customer’s concerns, and to fix the problem whenever possible.

• Frontline managers and senior leaders use NPS data and customer comments to inform decisions about process changes, new products and other innovations.

• A growing body of experience• Thousands of companies in many different industries have begun

to measure their Net Promoter scores over the past several years. • Many practitioners share their experiences and lessons learned

through mechanisms such as the NPS Loyalty Forum.

Shortfalls• 1. NPS Leaves You in the Dark• If you want to know why you got the score you did, NPS doesn’t

explain anything. Even following the NPS question to ask “Why?” won’t solve this problem.

• 2. The NPS Question Is Lame• Net Promoter Score’s single-question approach puts all eggs in one

faulty basket. The question’s close-ended, yes-or-no format is too black-and-white and the question simply does not work for every situation.

• 3. NPS is Not Always Accurate• Weak approaches to customer feedback get weak results. Research

has identified problems with questions that presuppose positive responses. Some research has even shown that satisfied customers are more likely to participate in customer feedback surveys. And, certainly, inflated results won’t help you improve customer experience.

Further strategies• Strategy #1• To maximise the utility of NPS, find a few factors such as

wait-time, attire and accessibility that link fundamentally with profitability

• Strategy #2• NPS is an outcome metric. In addition to providing

outcome metrics, ask consultants to identify the process metrics such as quality of answer and attentiveness of staff

• Strategy #3• Get a better question rather than Stop asking "would you

recommend…?“. Propose a question that is thoughtful, branded and tailored to your industry

Applying eNPS on employees

• Sorting employees into three different types of results• Detractor, passive and promoter

• Survey length• Frequency• Speed of action.

Company with NPS

• Link to how many companies are actually incorporating with NPS