Despite respectable revenue growth, the leadership team at TelecomCo* remained wary of increasing competitive pressures in their market and of internal operational issues related to sales execution and customer service that threatened growth. To help resolve these issues and identify further value creation opportunities, the team asked Bain to review their performance.
Bain and the team at TelecomCo approached their work with an understanding of the importance of customer experience to telecommunications providers. In fact, Bain analysis shows that companies that excel with customer experience grow revenues 4%–8% above their market because a superior experience helps to earn stronger loyalty among customers, turning them into promoters who tend to buy more, stay longer and make recommendations to their friends.
As measured by its Net Promoter Score℠, TelecomCo lagged behind its competitors in customer experience, and surveys indicated that the company's network and customer service offerings were particularly weak. A customer experience transformation presented the opportunity to turn these figures around.
In order to achieve TelecomCo's aspirational growth targets, the Bain and TelecomCo teams set out to make customer experience a focal point of all of the company's strategic efforts and to fully embed customer experience within their strategy by implementing a Net Promoter System.
Net Promoter is a management philosophy that provides a practical framework for companies to focus on earning the passionate loyalty of both customers and employees. Loyalty correlates strongly with sustainable, profitable organic growth as passionate customers stay longer, spend more, contribute suggestions and sing a company's praises to friends and colleagues.
The work to establish the system progressed in three main phases:
- Set priorities and build the infrastructure. The teams measured the company's current state on customer experience, reviewing competitive benchmark Net Promoter Scores—which are based on surveys of customers' attitudes toward competitors in an industry—to develop accurate competitive benchmarks. With the scores in hand, the teams looked to establish proper governance through a customer experience team and by evaluating the tools, processes and IT required to support the system.
- Establish feedback loops. The Net Promoter System generates feedback from customers in the form of comments and scores, though in order for this information to prompt action throughout the organization, feedback loops need to be established. An "inner loop" promotes individual learning at the front line, while the "outer loop" addresses structural challenges that go beyond individuals or teams.
- Boost communication and change management. Continuous communication is key to implementing a Net Promoter System, so the teams built a sponsorship spine of loyalty leaders throughout the organization and assessed and closely monitored the risks to change throughout the effort.
Thanks to the efforts of the Bain and TelecomCo teams, the organization established and implemented its Net Promoter System and began to see quick returns:
- Within six months, Bain helped train 1,500 employees on Net Promoter and feedback loop routines and touchpoint NPS scores improved substantially: store scores increased by 50 percentage points while call centers all experienced improvements of greater than 30 percentage points. Meanwhile, competitive benchmark Net Promoter Scores from customers also improved steadily.
- Critically, the new Net Promoter System helped to add millions to TelecomCo's bottom line. With an increased focus on loyalty, the company reduced churn on its major products by multiple percentage points while stores that implemented Net Promoter pilot projects experienced a sales conversion rate nearly 20% higher than peer stores.
- The work equipped TelecomCo to conduct regular competitive benchmark Net Promoter surveys to maintain its benchmarks against competitors.
- Customer experience became a focal point of TelecomCo's work, supported by a dedicated and fully trained customer experience team to maintain the feedback loop routines and implement structural improvements.
- With successful change management buy-in from across the organization, TelecomCo is set up to incorporate continuous feedback from Net Promoter efforts in its operations to become ever more customer-centric.