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    Webinar customer-measurement presentation Webinar customer-measurement presentation Presentation Transcript

    • How Progressive Successfully Implemented New Customer Measures and Engaged an Entire Organization Richard Watts, Progressive Corporation Group President of Sales and Service (retired) Colin Shaw, Beyond Philosophy Founder, CEO www.beyondphilosophy.com
    • Beyond Philosophy Customer Experience Thought leadership is Fourth book is all we do! our differentiator Now Available Offices in London, Atlanta with Partners in Links with Focus on the emotional side Europe & Asia Academia of the Customer Experience Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 2
    • www.beyondphilosophy.com 3 Beyond Philosophy © All rights reserved. 2001-2010
    • 1. Viewer Window 2. Control Panel GoToWebinar Example Interface Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 4
    • Progressive Insurance 2009 General Information 26,000 employees 450+ claims offices and 50 service centers 30,000+ Authorized Independent Agencies 13 Million Policyholders $14 billion Net Premiums Written (2009)+ 3% vs. 2008 - 60% / 40% Types of Insurance: auto, motorcycle, recreation vehicle, commercial auto, personal watercraft, boat, all terrain vehicle (ATV), and Segways Fourth-largest U.S. provider of auto insurance Independent Agents: largest writer of private passenger auto insurance The largest U.S. provider of motorcycle insurance Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 5
    • Poll To what extent does your organization currently use Net Promoter Score? Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 6
    • NPS® Basics How Likely is it that You Would Recommend Company X to a Friend Or Colleague? Customers can be grouped into three distinct categories: Promoters 9, 10 Loyal to the company and will tell others to do business with Your Company Passives 7, 8 Satisfied customers but can be persuaded to abandon us for a competitor Detractors 0-6 Dissatisfied customers Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 7
    • How likely is it you would recommend? Extremely likely % Promoters 9-10 7-8 minus 0-6 % Detractors Extremely unlikely Net Promoter® Score (NPS) Source: Fred Reichheld Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 8
    • Probes both Head - Rational Heart - Emotional Best features They know me Best service They value me Best price They listen to me They share my values Robert Stevens Geek Squad Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 9
    • Would You Do That to Your Mum?? Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 10
    • Requires A Clear Link to Financial Results Requires Serious Resourcing Needs Solid Leadership Support Must Have Middle and Front line Involvement Requires Good Measurement Systems Needs A Feedback Loop ®Net Promoter & NPS are registered Trademarks of Bain and Co. Inc, Fred Reichheld and Satmetrix Systems, Inc . Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 11
    • A Clear Link to Financial Results One Month Increase in Policy $1 Billion of Additional Earned Premium!!! Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 12
    • Knowing Your Economics Lifetime customer value segment X (NPV, indexed) $200 +147 $147 -93 SOW +100 $100 Recommendation Retention/Churn 100 Base profit Base profit Base profit 0 Retention/Churn Recommendation SOW Cost to serve Acquisition cost -­100 Detractor Detractor Passive Average Promoter Promoter www.beyondphilosophy.com
    • Requires Serious Resourcing Executive Sponsor Organizational Clout Program Sponsor Steering Committee J Program Teams Business Function Owners X-Functional Champions Systems Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 14
    • Solid Leadership Support We have continuously embraced the concepts and analytics of total 1 Continued Focus on Customer Satisfaction and Loyalty In this letter last quality management, and of more recent times adopted, and now have become somewhat recognized for, the depth of application of the Net Promoter® Score. What http://investors.progressive.com/06_annual CEO has really happened is that we have matured who identifyLeaders Business themselves /letter.html as promoters, detractors, or simply indifferent from tactically addressing just retention measures or based on their willingness to refer us to others. Introducing such a customerManagers improvements on multiple fronts into a more General experience measure has given us a sharper read on how our customers perceive Functional Leaders deliberate customer care culture that is embraced, managed, us. A referral, or willingness to refer, speaks volumes about an Research and advanced at every level of the organization by those who correctly see themselves as brand ambassadors and disciples. completely within our control, which drives what they think, feel and 2008 PGR Annual Report say about our service. respecteveryindividual is the measurable progress we made in A particularly pleasing 2007 result care philosophy advancing our Net Promoter Score. Overall scores from customers in most is built upon respect. of our product lines increased in 2007, with big gains in our auto offerings sold through agents and direct. 2007 PGR Annual Annual Report Progressive 2009 Report Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 15
    • Middle and Front Line Involvement Front Line Knows this Already Middle a Challenge Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 16
    • The Daily Work Experience: How It Feels To the Rep Creating an Honorable Job for Employees Customers (80% NPS) Service Profit Chain Heskett, Sasser, and Schlesinger, 1997 Employees (57% NPS) Employee Loyalty Customers (20% NPS) Customer Loyalty Economic Benefit Employees (14% NPS) Source: Fred Reichheld Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 17
    • Requires Good Measurement Systems Reliable Consistent Accurate A Single Currency for All functional Areas Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 18
    • Needs A Feedback Loop Verbatims are a Treasure Trove Integration with Front Line Work Flow Alchemy Making it Personal Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 19
    • Closing the Loop Promotes Accountability Customer Completed surveys Data warehouse Desktop Results entered in Improve! Rep or Manager Product Dbase for calls Customer Process Tracking/Analysis People Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 20
    • Read the Angst with Your Process Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 21
    • ID Cards Comments NPS 10% Strengths 19%, NPS = 60% It's too soon to tell, however the enrollment % of Positive Topic process and delivery of our insurance cards Comments were swift so that was a real plus! Enjoyed the responsive attitude that used all 63% Fast delivery current technology to get my cards live time 20% Online availability (temp ID) and not waiting for a week. Great stuff! Opportunities 81%, NPS = -2% % of Negative Topic Comments been told that they come with my renewal packet but never do! Just the Disclaimer and 73% Missing or slow delivery Legal jargon. No Cards! 8% Incorrect information If there are two drivers and two cars on a policy, send four cards so each person can carry one 6% More cards and have one in each car. Like Paper or Plastic ???? Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 22
    • NPS Exercise Typical Issue Identification and Response: Authorization Process for Electronic Funds Transfer is Broken: Failure Rates of 18% Failure Has a ~ 20 point Lower NPS and Substantially lower Retention Rates Comments Measures Action Result Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 23
    • Put science around what may sound irrational Eat Your Own Cooking Seek Out Friendly Fire A careful look at Fees Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 24
    • Progressive Insurance Where on the Journey? Recommend buried in larger No Change Survey Owned by Research Group Not Understood by Org NPS Diagnostic Burning Platform for Acceptance as new Perspective Cornerstone of Analysis Change Jointly owned by Marketing & Business NPS Implementation Mobilization for NPS perceived as a Change enabler Cornerstone of customer relationship improvement PGR? Sustainable Change Jointly owned by business leaders and frontline NPS Full Potential Profitable Organic Customer Advocacy permeates culture Org focused on creating Promoters and reducing Growth Detractors Embedded in operational Processes Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 25
    • Progressive vs. The Industry Margin Growth Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 26
    • Any Questions? Other than Would You Do That to Your Mum? Colin.shaw@beyondphilosophy.com London Office: 0207-917-1717 Atlanta Office: 1-678-638-6162 Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 27