Fast, agile companies are relentless in using customer feedback to drive improvements and to make the necessary changes to accelerate growth and performance. In my latest book, First & Fast, I met with Andrew Stephenson, who created a market-leading approach to customer-centered management at DFS, the UK’s leading sofa retailer. Here is a short extract from Chapter 7 of the book, Allowing Your Customers to Navigate:
On the back of some effective marketing, and despite some academic criticism about its superiority to other customer satisfaction measures, the Net Promoter Score (or NPS – see details here) has become a common metric in many corporate boardrooms. Few companies, however, have embedded NPS into an organization’s ways of working as far as DFS has achieved.
Stephenson admits that the metric isn’t perfect, but he believes that its simplicity and the ability of everyone across the business to focus around a single metric significantly outweigh any downsides. As a result, NPS has become as important as the sales and profit figures throughout DFS, from front line sales teams, to head office support teams, to senior executives and non-executive directors. By 2014, DFS’s use of NPS looked something like this:
- The company now collects over 200,000 separate customer reviews each year, covering various stages of its customer experience – pre-sale, point of sale, point of delivery, 6-months post-delivery and following any 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-center 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, who is expected to follow up with the customer, with central management follow-up of how the issue has been dealt with taking place shortly after;
- Stephenson ensures 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. Stephenson found that the previous method of encouraging responses, which was to enter respondents into a prize draw, 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 to gain a sample of results from these customers to ensure that their views are in line with the majority of email customers and 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 well does your organization match up to the customer-focus standards set by DFS?
© Stuart Cross 2017. All rights reserved.