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 A growing body of experience 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 2. The NPS Question Is Lame 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