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Webinar customer-measurement presentation

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