As we all know, word-of-mouth (or a referral) is one of the best measures of success for any company. If a customer is willing to tell other people about your company in a positive manner then odds are you’ve got a satisfied customer. The more satisfied customers you have the more potential customers will seek you out without you having to seek them out.

However, measuring word-of-mouth is difficult. That’s where Net Promoter Score (NPS) comes in. It’s meant to help measure customer loyalty and predict customer retention. While not truly measuring how much new business you get from referrals, it does the next best thing – it measures your customers willingness to give referrals.

The wonderful thing about Net Promoter Score is the simplicity of  the whole thing. To get the data to calculate your NPS you ask your customers one simple question: “How likely is it (on a scale of 0 to 10) that you would recommend our company to a friend or colleague?” That’s it. One question. It’s a beautiful thing. Then to get your NPS you simply take the percentage of promoters (those who answered 9 or 10) and subtract the percentage of detractors (those who answered 4 or lower). See this graphic for a full explanation:

As for the mechanics of the survey, we find that sending out an email with a brief explanation and a link to take the survey online works well. We recommend using radio buttons for the 0 to 10 scale as it’s a way to encourage the user to click on something. Other form options could introduce bias because of a default value or could allow people to choose more than one answer, all of which could undermine your results. We also recommend adding one more question after the NPS question asking your customers something like “What can we do to improve?” and leave them an open text area to type in any comments or suggestions. Expect a response rate of about 10% to 20%, depending on the quality of your customer list.

Large consumer companies that truly focus on customer service (like Amazon) will have a NPS around 80%. It’s said that most average companies have a rating of 5% to 10%.

For those of you who’ve done surveys before you know that asking as few questions as possible helps to encourage people to actually answer the survey. When you can send an email asking someone to take your survey and honestly tell them it should take only about one minute of their time, your response rates will go up. Guaranteed.

The other great thing about Net Promoter Score is it’s a very simple way to stay in touch with your customers. It helps pull the complexity out of the customer satisfaction measurement process and shows your customers that you are paying attention and continually working to improve your business and make them happier.

Getting your first NPS rating is the toughest, because you need to develop a very clean mailing list, find survey software to use, etc. But what getting the first one completed does is set the benchmark for where you are with your customers. If you notice that your NPS is dropping over the next few surveys, you’ll know something is possibly wrong with your customer experience and you can try to figure out what’s going on.

To improve your NPS focus on customer touch points that are likely to have the biggest impact on customer satisfaction. A lot of times you may realize these touch points are the “low hanging fruit” anyway that can turn your good company into a great one. Also focus on any comments you get on your other survey question asking how you can improve and then try to do those things before your next survey goes out.

Net Promoter Score is a good and fairly easy way to measure customer satisfaction. We completed our first NPS survey for one of our Pro Mach divisions a few months ago and got a Net Promoter Score of 66.7% – good, but we’ve got room to improve.

We’d love to hear your comments about your customer satisfaction measurement process, your experience with NPS and anything else.

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A number of the equipment manufacturer service managers I speak with are frustrated by the fact they only talk with customers when they experience a problem.

These managers think that machine operators don’t receive enough initial or ongoing training to maintain proper adjustments that keep the machine in spec. They say that end users do not service the machine at recommended intervals which leads to downtime. Some customers, they say, have a tendency to buy cheap replacement parts that not only break more quickly than OEM components, but also cause additional machine wear. Service managers decry the fact that so many customers pass up the opportunity to keep the machines well maintained through preventive maintenance service contracts.

During the sales process

Sales personnel don’t like talking about service because it implies the machine they sell isn’t high quality. Many customers don’t want to hear about service contracts because of the extra cost. Equipment company service managers, uninvolved during the sales process, don’t have a chance to weigh in. Frankly, most may not have the data to back up the cost/benefit ratio of ongoing training and preventative maintenance service contracts.

I suggest that service managers and equipment sales personnel become preventative maintenance contract champions and proclaim at every opportunity the value of those contracts. This advocacy must be fact based in order to demonstrate the positive impacts proper maintenance and training can have on productivity and costs. That means thorough data collection and analysis. Accurate cost/benefit ratios must be integrated into this analysis.

Sales people, customers, and service personnel should come together at the beginning of the sales process in order to chart a course toward lowest-total-cost of ownership and highest uptime and product quality. Without this cooperation, service managers will talk with customers only when they have a problem.

Here’s the question: Do service and sales personnel adequately explain the value of preventative maintenance service contracts?

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When we embarked on creating ProCustomer, we had a lot of learning to do to get up to speed on truly understanding and documenting what it takes to offer superior customer service. We had a general idea that we were offering great customer service, but we never really deconstructed it to understand how we did it. Along the way we made some key findings in our “discovery phase” we thought would be worthwhile to share with you.

The Most Important Lesson

Starting right from the beginning we kept rediscovering something we intellectually knew but that really didn’t sink in fully until we really thought long and hard about it:

• WE control customer service

As a company, we control it. There’s not a lot you can say you control as a company. The economy is out of your control, the weather is out of your control, what your competitors do is out of your control, your vendors getting you the correct parts is out of your control, your customers paying you on time is out of your control, foreign exchange rates are out of your control, etc. But you own your customer service experience and have all the power to make it great. That’s really powerful stuff.

Defining Superior Customer Service

Next, we needed to really hone in on what we wanted to offer. We knew we wanted to offer superior customer service, but what did that really mean? So we attempted to define it in the simplest of terms:

• Superior Customer Service – A positive experience for customers that is consistently delivered so well they have no reason to switch to a competitor

At the end of the day this is what we were striving for – to create great customer service experiences with our customers every time we interacted with them that made it hard for them to consider another company. That should be the goal of every business.

Customer Service Facts

Next we found a few key facts that really made it painfully obvious why we needed to focus on customer service:

• 65% of customer defections are controllable
• 45% of customer defections are service related

These statistics were really powerful. Nearly half of customer defections are due to service, something we control! We started to realize that the customer experience had be our top priority and reflected in our work processes, structure and systems. Everything we do had to be focused on making the customer experience great.

3 Groups of Customers

Next we found some information on classifying customers that really stuck with us. Essentially customers can fall into one of three categories:

• Advocates
• Apathetics
• Assassins

Our goal, as a company, is to have as many advocates as possible. Most customers fall into the Apathetics group where they’re satisfied, but not delighted. Assassins can bring us down and will tell other people about it. If we have a customer that’s an Assassin then we’ve probably given them several bad customer service experiences. Thinking about your individual customers and trying to identify which group they fall into is an eye-opening exercise.

The Customer Satisfaction Curve

The next thing that really opened our eyes was understanding the customer satisfaction curve – shown below. Understanding that in between the extreme cases of Assassins (on the lower left) and Advocates (on the upper right) were over 90% of our customers (Apathetics) was pretty powerful, as was the realization that it takes A LOT to move a customer from an Apathetic to an Advocate:

(Source: Corporate Executive Board, Climbing the Service Curve, 2003)

Creating Superior Customer Service

Now the last step was creating superior customer service. While our ProCustomer Attributes are well-documented, we didn’t start with those and instead had to focus on high-level points first before we could really get down to the tactical level. With that understanding here’s what we identified as the critical points to deliver a truly superior customer service:

• It had to be unique to our core strengths
• It had to have complete organizational support and active participation
• It had to revolve around profitable product and service offerings
• It had to be consistent – communication, behaviors, products and service
• It had to emphasize continual relationship building – both internal and external
• It had to begin with an understanding of both our customers’ and our own business’ requirements for success
• It had to focus on constantly communicating those requirements to both our team and our customers

So that’s how we got started on ProCustomer. There were a lot of other steps in the process and a lot that came after this, but these were our early lessons that still ring true. We hope you enjoyed this peek into our discovery process.

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I am a firm believer in the role of certification to help people take their experience to an industry recognized level of expertise. I’ve found that those who earn certification have a profound feeling of accomplishment and conduct themselves with a noticeably higher level of professionalism.

If a person is going to train others on the use of equipment, earning a training certification is especially important. The reason is that knowledge of a technical subject is no guarantee that a person can effectively teach a diverse group of adult learners about that subject. In fact, some of the most technically astute people I know should be kept as far away from a classroom as possible. They are simply poor communicators.

The PMMI trainer certification helps ensure that an individual knows how to create an environment conducive to learning as well as teach others rather than merely presenting them with information. Here are some of the skills that a candidate must master to become a PMMI certified trainer:

• Assess training needs (and pre-training needs) and address them with customers
• Facilitate the learning experience by using a variety of training techniques
• Provide user-friendly aids: checklists, performance checks, and troubleshooting guides
• Customize a training plan specifically to meet the needs of adult learners
• Work through cultural and generational differences
• Identify the training/learning “gaps”
• Measure performance goals
• Evaluate the training return on investment
• Develop a realistic follow-up and ongoing training plans

Two of these bullets stand out for me: Customize a training plan specifically to meet the needs of adult learners; Work through cultural and generational differences. Everyone learns in slightly different ways and if the trainer doesn’t have a clue about how to tailor the information or discern who thrives by reading, listening, viewing, or hands-on teaching methods then the effort can’t be as effective as it might be. One size does not fit all.

No one wants a poor training experience, not management, not line personnel. Poorly trained workers can’t maintain optimum uptime and overall equipment effectiveness, not to mention ensure that quality standards are met, minimize waste, and know how to safely operate equipment.

Here’s the question: Do you prefer that OEMs have their trainers certified to the PMMI standard? Vote yes or no. I welcome your comments.

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Today’s major companies, for both sides of the table, sometimes focus on cutting cost by eliminating people in their customer service department. This can be the difference between getting your product on time and made correctly or getting something all wrong and delivered late. A good quality customer service department is your lifeline to success. Like a good salesperson they know your product and needs as well as they know their own.

You can identify a quality customer service department by the way they answer or ask questions. If they have little to say I’d be concerned. I recently had that experience with a manufacturer who wanted to give me a “JIT” (Just in Time) order but provided me very little information. I passed on the order.

On the other hand I have numerous repeat customers requesting “JIT” and we go over their size, gauge, packaging, delivery times, any changes that the plant may have had since the last order (such as machines or pack changes), person to contact in case of a problem and cost. These are the critical points to look for in today’s fast paced order and delivery world.

I’m Jim Parker and next up is the new “JIT” replaced with “NIY”.

Jim Parker is a guest contributor with Pacific Rim Plastics. You can email him at dparker866@aol.com

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I believe that responsiveness is the real key to world class service, particularly in today’s technologically dependent environment. What could be more responsive then than a service organization that can log onto my equipment and, in real time, fix the problem and let me get on producing and earning money?

In my opinion, there are a lot of benefits to remote diagnostics: Like not having to wait for a tech to show up and the lower service cost because travel is eliminated. That minimizes downtime and reduces expenses. And there are new remote diagnostic technologies being brought to market all the time. For example, a growing number of remote diagnostic systems have cameras that can be aimed at various parts of the machine to show actual operating conditions. Some of these systems can even take short video clips of the machine for future reference and comparison. Some companies offer secure Virtual Private Network (VPN) connections that can function as a lifeline to the control system 24 hours a day, seven days a week.

What can some of these remote diagnostic systems do? Well:

• PLC ladder logic troubleshooting and modifications
• Process monitoring to resolve deviations
• Remote HMI control
• Host computer troubleshooting
• Online operator task training
• Online HMI configuration
• Online device configuration

If there is a problem an online tech can’t fix, but can diagnose, such as a failed sensor or improperly working drive, he or she may be able to have a replacement part sent via overnight delivery.

In fact, when a service problem crops up at my business, I’m thrilled when someone can log onto my system and immediately determine what’s up as well as implement or suggest corrective action.

All that being said, I may be out in left field on this because I’ve heard that remote diagnostics are not all that valued due to the issue of security, proprietary information, and other matters.

Here’s my question: Should more suppliers build remote diagnostics into their equipment? Vote yes or no. I welcome your comments.

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I think we tend to forget that the most critical element in creating a great customer service experience is giving your people the power to make a great customer service experience.

Read it again this way: if you don’t give your people the power to create awesome customer service experiences they can’t create awesome customer service experiences.

I was at Starbucks this morning, ordering my usual chai tea latte, and I decided to try one of their english muffin breakfast sandwiches. We rang it up and I promptly moved to the other counter where they deliver your order. My tea came out and I took a seat to get out of everyone’s way, figuring my sandwich would take a little longer. A chance for me to check email and relax for a minute. After about 5 minutes I realized the sandwich probably wasn’t coming so I mentioned it to them. They apologized and quickly went about making it and then proceeded to hand me a coupon for a free beverage. It reads:

A cup should never be half empty.
We apologize if your Starbucks experience was anything but wonderful. We want to know how we can make things better and always invite you to share your thoughts with us. The next time we see you, please enjoy a beverage, on us. We hope your next visit is better.

On the back there’s a Customer Relations phone number and web site.

I wasn’t upset about the muffin, Starbucks is very busy in the morning and it’s understandable. But they have empowered their employees to make the decision on when to do the right thing. There wasn’t a manager that had to approve this, as far as I could tell. They just handed me a coupon that will cost them about $4 the next time I visit the store.

Do your policies sometimes get in the way of letting your customers have the best experience they can? Have you empowered your customer facing people to “do the right thing” at all times, letting their discretion and understanding of each unique situation dictate how it’s handled? Do they need to get a lot of levels of approval while the customer seethes? Think about what you can do to break down those barriers and you’ll create more opportunities for truly great customer service experiences with your business.

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It floored me today to read in the PMMI 2009 Customer Attitudes & Behaviors survey that the number one attribute customers look for in an OEM, in addition to the packaging machine, is spare parts availability.

How un-sexy is that? It’s enough to make the sales and product development teams pull their hair out.

When you stop to think about it, however, having spare parts availability as the number one attribute that customers’ value in an OEM makes sense. Only those OEMs with a commitment to the long term success of their customers are going to invest in a robust spare parts program. Those OEMs know that their machines are going to be on the packaging line for five, 10, 20, or 30 years and along with the machine, it’s their reputation that’s on that line. This long-term view may make the price of the machine go up slightly and reduce OEM profits somewhat, but OEMs who know that reputation is the key to success, will commit to a robust support strategy. And it’s not only the spare parts that are important, but also the infrastructure to get those parts delivered quickly. The survey found that North American OEMs had the highest rating for spare parts availability.

Here are some of the other OEM attributes that the 2009 PMMI survey found were top rated. Each one relates in some way to a supplier committed to long-term success, not quarter-by-quarter sales revenue.

• Problem solving-engineering expertise. (This means hiring and retaining the best people)
• Knowledge about materials and machinery fit. (This relates to long years of working at many different customer sites to solve customer-specific problems)
• Overall reputation of a manufacturer. (This is all about doing right by the customer year-after-year and having great products)
• Training and documentation capabilities. (This relates to making the customer successful and earning the right to sell another machine to that that customer)
• After-sales market support. (Once again it’s the long view and knowing that to avoid extinction the OEM must invest in the infrastructure for customer success)

The whole emphasis on spare parts availability is really about wanting to work with an OEM who is going to do what it takes to be around for the next several generations.

Here’s the question: Are spare parts the single most important attribute you look for in the packaging machinery OEM? Vote yes or no. I welcome your comments.

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Three years ago I interviewed the operations and quality manager at the nation’s oldest continuously operating brewery for an article I was writing on robotics for Packaging World magazine. The brewery used robots to automate de-palletizing and palletizing heavy beer kegs entering and leaving the plant. I asked about service from the robotics company and the manager answered, “We’ve received world-class responsiveness in terms of support from the robotics supplier. That level of support ensures that we don’t miss a beat in terms of overall production.”

That quote has stuck with me, because whenever I need support it’s the companies that are available and responsive that I value most. Not too long ago my automated computer back up system stopped working. I went to the supplier’s website and had to scroll through page after page until I found the tech service telephone number. Actually, I finally found it on the parent company’s website. And the support effort went downhill from there. The techs were great to work with, but the problem dragged on because, of all things, the tech’s work shift hardly overlapped my workday leaving a tiny window of opportunity to develop a fix.

The problem was eventually resolved, but when another problem occurred with the same system, I dumped the provider. I did not have the time or patience to work with that company. Besides, I dreaded having to invest the time to find that phone number again.

At a minimum, this is what I look for in terms of a responsive service organization:

• A phone number that is easy to find on the website or attached to the product or documentation.
• If I have to email the supplier, I want the company to acknowledge my email and quickly let me how long I’ll have to wait for a reply.
• When I call, I want to be put through to a support person quickly and with as short a phone message tree as possible.
• I want support hours that correspond to my work day.
• I want the tech support person to share my sense of urgency, to be knowledgeable, and to get a fix rolling ASAP.
• I want to work with a tech support organization that is creative and empowered to provide an out-of-the-box solution if necessary.

When a supplier sells a product to my business, that company implicitly becomes my partner in productivity. Some companies get that, while others don’t. It’s the ones who get it that earn my loyalty and gain the benefit of my endorsement when others ask me for supplier recommendations.

Here’s the question: Is responsiveness the number one thing you value in service and support organizations? Vote yes or no. I welcome your comments.

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Stick with me here, because I’m going to be talking about baby monitors. But I promise I’ll use the example to make a point.

Before we had our first child we researched a lot of different baby monitors before settling in on a system that was a bit pricey – $125 – but got great reviews. We’ve had the system now for over a year and really love it, it has a sensitivity adjustment on it that means we can actually hear the baby breathe if we want (how comforting is THAT in the middle of the night for the new parent?), but it only came with one charger base and you couldn’t buy an extra charger for it at the store.

So I decided to call the company and order an extra charger. I called them up and we walked through the model and part identification process, confirmed the part I needed and she took my shipping information. I realized she had yet to mention price so I asked her how much it cost and started to pull out the credit card, already conceding that “I’ve made it this far so I guess I’ll pay whatever it is.” I’m thinking maybe $20 or $30, tops. She then proceeded to tell me “It’s free – we do this as a service for our customers.”

“I’m sorry. What? It’s free?”

“Yes sir, it’s free as a courtesy to our customers.” Wow. I actually told her “I’m stunned.” She says “It will be there in 5 to 7 business days unless you need it sooner.” I assured her 5 to 7 was fine, thanked her profusely and then called my wife to tell her the good news. A purely delightful customer service experience.

Now I’m sure many of you are reading this saying “they left a lot of money on the table there – aftermarket parts can have a really big markup!” and you’re right – they did leave money on the table with ME. But customer service goes beyond the single customer you interact with – and that’s the key. People who have babies probably have friends who will be having babies and guess who those friends will ask about what the best this and that is?

Do you think any friend of ours won’t get this monitor recommended to them if they ask? Heck they’ll get it recommended to them if they don’t ask. Why? Because I got a free charger? No, it goes way beyond that – they decided that rather than make a nice profit from aftermarket parts, like we’re all want to do – that they would instead focus on creating loyal customers. They empathize with their target market – new parents – and try to make life a little bit easier for them, because they know that their lives are probably a little hectic right now.

Of course, they had a quality product to begin with and that’s important, but remember I wasn’t looking to change, I was already happy. They took a happy customer and turned me into a delighted customer.

Now how do we turn this back to packaging? Simple – remember that you don’t turn customers into advocates when they’re upset, you turn them into advocates when they’re already happy. You turn them into advocates by empathizing with them and occasionally surprising them by going above and beyond even when you aren’t asked to do so.

Now don’t get me wrong, I’m not saying you need to give away spare parts to create advocates, but the heart of what I’m getting at is this: what could you be doing differently to unexpectedly delight your customers? How do you create your next “above and beyond” moment? How do you turn your apathetic customer into an advocate? Give it some thought, it might not be as hard as you think.

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