In dynamic, turbulent and fast-moving markets, driven by almost unbelievable technological advancements, you can easily become distracted by the noise and activity in your markets and forget this critical business truth.
You do so at your peril.
Like a party of trekkers in the Himalayas who stay physically close to their guides during the raging storms that can descend unexpectedly in the mountains. Similarly, you need to stay close to your customers at all times. They can guide your next steps and help lead you to a successful outcome.
Customers may not set your destination or the mountain you choose to climb, but they can provide the necessary navigation to help you arrive safely. If you let them.
So far, so obvious, but how many companies stay close enough to their customers? Listen hard enough to their customers and act quickly enough on the guidance they’re given? Thus enabling them to either lead their markets or at least move faster than their competitors?
In my experience, the answer is remarkably few. Even huge organizations with seemingly bottomless marketing budgets can spectacularly fail to respond to their customers’ changing needs and desires.
Some companies, though, really do put customers at the heart of their organisation. Since 2010, DFS, the UK’s largest sofa retailer, has revolutionized its approach to focusing on and managing customer feedback. Using a Net Promoter Score system (for details see here), the company has grown its sales, profits and market share on the back of these actions:
- The company collects over 200,000 separate customer reviews each year. They cover various stages of its customer experience. From pre-sale, point of sale, point of delivery, 6-months post-delivery and following a customer service issue. This represents a response rate of over 10%;
- Each sales consultant, store team and manager, area, region, delivery team and individual members, the in-house factory teams and the on-line team and call-centre service team receive weekly NPS reviews, and their performance bonuses are directly based on their average NPS scores;
- The executive team review overall NPS performance each week alongside sales, with actions identified for immediate resolution. Similarly, the monthly board meeting contains a review of the company’s NPS performance;
- Any individual customer score of 6 or below results in a notification to the relevant store manager. They are expected to follow up with the customer, with central management follow up of how the issue has been dealt with taking place shortly after;
- The system has been designed to ensure that customers’ answers are as honest as possible. Here are three steps they’ve taken to ensure the integrity of the data:
- DFS provides a charitable donation for every response received. The director responsible, Andrew Stephenson, found that the previous method of encouraging responses, which was to enter respondents into a prize draw. This had slightly skewed responses upwards, whereas a charitable donation had no such impact;
- The entire system is administered by an independent third-party marketing agency, which is highlighted on all emails. Again, this has been found to improve the quality and integrity of customer responses; and
- The system is email based. But for those customers where no email is collected, the marketing agency takes their mobile phone numbers. They gain a sample of results from these customers to ensure that their views are in line with the majority of email customers. This also ensures that individual sales consultants are not ‘gaming’ the system.
In other words, the NPS system that DFS has developed has become the oxygen that is breathed across the business. Rather than pursuing the development of large but intermittent initiatives that tend to follow annual customer surveys, the DFS system allows managers and colleagues from across the organization to make thousands of individual decisions every day that, together, have transformed the company and enabled it to be truly customer-centered.
How is your company receiving, monitoring and acting on real-time customer feedback so that you can grow your business and achieve your goals in the fastest, most sustainable way you can?
© Stuart Cross 2017. All rights reserved.