A mature process doesn't necessarily meet customer needs. A quick guide to Net Promoter Score (NPS)

Dave O'Reardon (Left) itSMF Australia Innovation of the Year award winner, and Aprill Allen (Right) - @knowledgebird
Dave O’Reardon (Left) itSMF Australia Innovation of the Year award winner, and Aprill Allen (Right) – @knowledgebird

Many IT leaders are already familiar with the kinds of surveys the common support tools send out on ticket closure. But, it turns out, we may not be going about it the best way. This year’s winner of itSMF Australia’s Innovation of the Year was Dave O’Reardon. Dave has had 25 years’ experience working in IT and his award-winning transactional Net Promoter service, CIO Pulse, provides a whole new way of looking at how IT leaders can improve their services and start creating value for the businesses and customers they support.

After I photo-bombed Dave’s official awards photos, he gracefully agreed to an interview.

Can you explain the fundamentals of Net Promoter?

Sure! Net Promoter is a proven way of improving customer loyalty, or satisfaction, with a product, company or service. And its a metric – a Net Promoter Score – for understanding your progress toward that goal and for benchmarking your performance. It is not a piece of software and it is not Intellectual Property – it’s free for anyone to use.

If you’ve ever been asked a question along the lines of “On a scale of 0 to 10, how likely are you to recommend us to a friend or colleague?”, then you’ve come across a company that’s using Net Promoter. This question is usually followed by one or two open-ended questions. These follow-up questions ask the reason for the score and what could be done to improve. Based on a customer’s score (in response to the first question), they are categorised as either a Promoter (they scored 9 or 10), a Passive (they scored 7 or 8), or a Detractor (they scored 6 or below). Net Promoter then recommends a number of practices that can be used to convert Detractors and Passives into Promoters.

A Net Promoter Score is simply calculated by subtracting the percentage of Detractors from the percentage of Promoters. This calculation results in a score of between -100 (all your customers are Detractors) and +100 (all your customers are Promoters).

Net Promoter is commonly used in two different ways – transactional (also called operational or bottom-up) and relationship (also called brand or top-down). Transactional NPS is used to measure and improve the customer experience following a specific interaction (e.g. after an IT support ticket has been closed). Relationship NPS is used to measure and improve overall loyalty or satisfaction with a product, brand or service, e.g. via an annual survey.

Why is it important for IT teams to use a customer service improvement approach like Net Promoter?

There’s a few reasons.  First of all, IT teams often rely too much on service level agreements, such as incident response and resolution targets. These targets are great for helping support staff determine what to work on and when, but tell you nothing about the customers’ perceptions. If you’ve ever had a wall of green traffic lights for your SLAs and yet the customer still isn’t happy, then you know what I mean.  I like to call this the Watermelon Effect – SLA performance indicators are all green, but on the inside customers are red and angry.  Traditional SLAs don’t measure the customer experience and customer perceptions, Net Promoter does.

The second reason is that process maturity assessments – formal and informal – don’t help IT teams prioritise in any way that is meaningful.  We’re at maturity level 2 for Configuration Management, so what?! And on the flipside, even mature processes can be crap and fail to meet customers’ needs. Your Request Fulfillment process might be very mature – documented, automated, measured etc – and yet customers are still frustrated that hardware provision takes so long and that Jim is always gruff when asked for an update. A mature process doesn’t necessarily meet customer needs.

Bodies of knowledge like ITIL and COBIT are stuffed full of solutions. They are great to turn to when you’ve got a service issue and you want some ideas on how to solve it.  But how do you know you’ve got a problem and how do you know which problem is the most urgent?  If you want to improve service (and if you’re in the field of Service Management and you don’t, then you might be in the wrong field) you absolutely have to understand customer perceptions. Things such as service quality and value stem from customer’s perceptions.

Net Promoter is very widely used by consumer-facing organisations. How do you modify the typical Net Promoter format to suit internal teams like IT, HR and  so on?

That’s a great question. Net Promoter is often overlooked as an improvement methodology by internal service providers because of the first question – “How likely are you to recommend us to a friend or colleague?”. It just doesn’t make sense to an internal customer. Who’s going to tell one of their mates at the pub that their IT Service Desk is fantastic and that they should give them a call the next time they have a problem with their iPad!  The trick is just to reword the question so that it makes sense to the customer, e.g. “On a scale of 0 to 10, overall how satisfied are you with your recent support experience?”.

What’s wrong with the traditional transactional survey that we’re more familiar with?

Two things:

  1. Firstly, because internal service providers all use different surveys and different scales they can’t benchmark their performance against each other.  Their scores are calculated in different ways and so one organisation can’t tell if another organisation is doing better than them or worse. Who should get improvement ideas from who?
  2. The second thing is a bigger issue. Most organisations just don’t know what to do with the data they’re collecting. They survey, they calculate some sort of satisfaction score, and then they report on that score in a management report of some sort. But that’s all.  And that’s a terrible shame, because there’s a bunch of behaviors that the transactional survey should be driving that can result in a significant improvement in customer satisfaction. But if all you do is survey and calculate a score, don’t expect anything to improve. I call this the ‘Chasm of Lost Opportunity’ –  the powerful things that are not done between a survey being completed and a score being reported. By adopting the behaviors and activities recommended by Net Promoter – bridging the chasm – I’ve seen internal service providers make significant improvements to internal customer satisfaction in just months.

What sort of problems and improvement opportunities have you seen coming out of IT teams that start paying attention to customer feedback? Any particular areas that standout in common?

The most common feedback theme we see with transactional surveys comes down to poor communication – support calls that seem to disappear into black holes, customers not having their expectations managed re fulfillment/resolution timeframes, and tickets being closed without the customer first verifying that they’re happy that the solution has worked.

When it comes to the relationship surveys, every client is unique.  We see everything from issues with network speed, being forced to use old PCs, poor system availability, inadequate engagement of the business in IT projects, releases introducing too many defects, service desk hours that don’t work for the business.  Pretty much everything.  And that’s why the top-down relationship survey is so important. When Net Promoter is used for periodically surveying internal customers, it provides really rich information on what the customer sees as IT’s strengths and weaknesses. The results often come as a surprise to IT management, which is a good thing, because, without that information they were in danger of investing limited improvement resources in areas that just aren’t important to the customer.

If you could distill all the experience you’ve had with transforming IT teams, is there one high-impact tip you could suggest?

Yes, but it’s more of a way of thinking than a tip per se.  And that is – don’t dismiss customer feedback as something fluffy and unimportant. If you’re in the business of delivering service to a customer, then understanding customer perceptions is very very important. Dismiss customer feedback as fluffy and unimportant at your peril! Quality and value are both the result of perceptions, not objective measures like availability percentages and average response times.

Net Promoter-based transactional surveys are a great way to drive continual improvement in the Service Desk and IT support functions – improving the way IT is perceived by the large majority of its customers. And Net Promoter-based relationship surveys provide a valuable source of input to IT strategy, ensuring that IT is investing in the areas that are truly important to the business, not just because Gartner says so.

When IT teams don’t understand, and actively seek to improve, customer perceptions of IT, the end result is sad and predictable – IT is managed like a cost-centre, budgets are cut, functions are outsourced, and IT leaders are replaced.  And at pubs and dinner parties, no matter what job we do in IT, our friends grumble at us because where they work, their IT department is crap.

Dave helps IT teams, and other internal service providers, adopt Net Promoter and provide better customer service, improve their reputation and increase internal customer satisfaction. He’s worked in IT for 25 years and is the CEO and founder of:

  • Silversix.com.au – a management consultancy that helps IT teams measure and improve internal customer satisfaction)
  • and cio-pulse.com (a transactional Net Promoter service that kicks the ass of the survey modules of ITSM tools).

ITSM: Making a big splash in SAM

The following article forms part of a larger publication looking to understand the merits of best-practice as they pertain to Software Asset Management. Like any IT discipline, SAM does not exist in isolation, and can benefit greatly from the data typically deemed resident in Service Management. As ever, your feedback in the comments section below would be welcomed.

Software Support & Maintenance Review Process

To round off this updated version of the Process Kit, we have a process that might not be considered core SAM but should absolutely be in place if we are to make use of valuable data at our disposal. The review of value delivered by Support & Maintenance contracts should be instigated off the back of a software contract renewal. Support & Maintenance costs can add a substantial levy to the cost of software so an examination of its worth to the business should be a built-in step to any decision relating to contract renewal.

Primary Objectives:

  1. To assess the value received of vendor support & maintenance offered on software titles that have entered a contract renewal phase.
  2. To undertake a benefits analysis of the Support & Maintenance contract in relation to the IT strategy of the company.

Secondary Objective:

  1. To communicate the Support & Maintenance findings to the contracts renewal team

Assumptions:

  1. That such data required to support this process is retrievable from the Service Desk tool.

Function Step Overview:

1.10 Gather Service Desk data. The contracts renewal team should reach out to the Service Desk Manager to gather support call data relating to the software titles covered by a contract currently due for renewal.
1.20 Plot support calls. The Service Desk Manager should then seek to plot that data in a graph akin to the diagram below (Fig.1) Undoubtedly styles and layout will vary as regards preferences go, but if you can offer a breakdown of support calls answered at the varying levels of support offered to the business then this offers invaluable intelligence to the contracts renewal team.   The very simple Excel Spreadsheet that was used to generate figure 1 is available with this publication.
1.30 Determine acceptable call spread for your organisation.   Having plotted the support calls as per the graph in figure 1, the subjective task of determining the acceptable call-spread for your company has to take place. You might be more forgiving for newer titles, as these will not have received as many hot fixes and patches to plug potential vulnerabilities. Conversely, more for more mature titles, you might expect to see fewer overall calls logged against them due to the stability should titles should demonstrate.One aspect that should be evident of such analysis is the potential burden that these titles place on your company.   Let’s not forget that software is installed to facilitate end users to do their jobs, not to hinder a company in its productivity. A further benefit of such analysis to Service Desk Manager is that he/she can see at a glance where the greatest load is being borne for that software vendor, and so can direct training resources accordingly.
1.40 Examine support calls that escalated to vendor.   The percentage and quantity of support calls that have made it to the software vendor need assessing. As does the effective resolution rate, and overall experience of having dealt with the software vendor. Again, such an assessment will be subjective, but so long as the assessment is consistent and demonstrable to the contract renewals team then any findings are less likely to be questioned.
1.50 Compare Support & Maintenance benefits to future roll-out plans. The final piece of analysis required is to examine what adjacent benefits are bundled into the support & maintenance on offer. Some vendors will bundle in training (both on line and in person) their might even be upgrade rights to the next version of the software covered by the contract; rights to transfer; multiple install rights etc. This list goes on…. Such benefits should be compared to the mid-term direction the business and IT wishes to take those software titles.
1.60 Communicate recommendation to Contract Review Team. Having formulated the preceding research in an acceptable format for the contracts renewal team, the Service Desk Manager can submit his/her report to the team knowing that more than a “finger in the air” assessment has been made of the support & maintenance on offer.

Screen Shot 2015-09-01 at 09.35.29

(Fig. 1 – Example of Support Call Analysis – See Section 1.20)

The business can analyse this data and use it formulate a truly informed decision as to which titles are taken forward with support and maintenance, and which they feel they are capable of supporting through their own in-house technical expertise.

A point worth observing here is that the contracts renewal team will only use this as part of their considerations in deciding the direction to go in renewing a contract – financial considerations as well standard checks and controls on doing business with that particular software vendor will have to go into the overall decision.

A further point the contracts renewal team have to bear in mind is that if they choose to terminate support & maintenance on a given product, then this will have operational consequences on any software left in situ (no further vendor technical support, or possibly even the removal of the software altogether). This could entail switching costs and training demands that require fulfilling. The nuances of terminating support vary from vendor to vendor – take the time to find out what these are (or to inform the contract renewal team what they are).

Finally, with the prevalence of as-a-service, such a review would not be out of place to factor in up-time of software titles. Remember: if you don’t push for compensation at the point of contract renewal, any potential demands for remuneration for loss of service/downtime won’t have a legal leg to stand on.

Software Support & Maintenance Review Process - Page A Software Support & Maintenance Review Process - Page B Software Support & Maintenance Review Process - Page C

This, and 21 other processes have been modelled by SAM Charter in Version 2 of the SAM Process E-Kit. To take advantage of this launch (and as a thank you for making it to the end of this article!) the following promo code will offer you a $50 discount off any purchase made at the link below:

ITSMREVIEW50

http://www.samcharter.com/sam-charter-process-kit-version-2/

 

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