Serge Acker, Director of Philips Online Global Flagship store explains how they measure customer loyalty by automatically asking customers to rate every transaction. Using Voice Of Customer and the Net Promoter Score, they fix problems and prioritise strategic changes. He also outlines how they are moving into automating retention and word-of-mouth marketing using NPS. This presentation explains how business can build their own Loyalty "Robot" and was given at eCommerce Expo in London, Oct 20 together with Adam Dorrell of CustomerGauge, provider of the measurement system to Philips.

1. Building the Customer Loyalty Robot

2. Who the hell are we?
Serge Acker
Adam Dorrell
Sr Director & GM Philips Online St ctness
ore CEO CustomerGauge/Dire
serge.acker@philips.com Adam.dorrell@directness.net
A combined 25 years of eCommerce experience from
leading companies such as Apple, Dell and Sony, facing
similar issues and trying to find robust, scalable yet
cost-effective solutions to improve Online Sales.

3. Demystifying Loyalty or... Loyalty for Dummies
• What is the Philips Online Shop
• Sense and Simplicity in Online Sales
• Automatic Customer Feedback to support NPS
concept
• Now you can go and do it yourself

4. Sense & Simplicity through Online Sales

5. How did we get there?
Extensive research...

6. How did we get there?
... and listening to the voice of the customer

7. Paving the path for our eCommerce vision
aka “What we want to be famous for”

8. Sense & Simplicity, an enabler of success
ADVANCED EASY TO EXPERIENCE DESIGNED AROUND YOU
Immersive Experience Need-based tools Personalization

9. Philips is now in 10 countries, operating 20 stores

10. How do we keep improving on the promise?
How was it for YOU?

11. By investing in Loyalty!
• You should care about Customer experience
– It HAS an impact on the top & bottom line
• It’s the Voice of the Customer!
– Direct Feedback (no noise from channel)
• Measurable, it becomes a KPI!
– You can track improvements
– Direct link to profits
– Use if for Incentive
• Net Promoter Score
– An Industry standard KPI since 2003

12. Lesson in Inequalities…and where to focus
Source: Malcolm McDonald, CIM

13. “De la passoire... a l’entonnoir”
Customers
Pre-sale:
Acquisition
Traffic Costs $$$
! • 50 cts/KW
• 1% CR
➡ Up to $50/Cust
eCommerce
$
Engine
Transaction Philips Online Shop Conversion
etc
Fulfillment, Customer Services
etc
Post-Sale:
Retention
The need to focus on retaining customers is clear!
... but how can you do it effectively?

14. Finding the Value of Repeating Customers
Customers v. Revenue
• Take a sales report (last 6m or 12m), open in 100%
spreadsheet
• Group customers together by email address
(or customer number) 75% 50%
• Sum up the order values by customer
• Sort “total order value” from high to low
93%
• Divide customers into sensible segments: 50%
LOW/HIGH or 5/10/85%
25% 50%
7%
0%
Number of customers Revenue
Repeating Customers
New Customers
Data Fact: B
es
of its custom t Buy found that 7%
ers accounte
of its sales. d for 43%

15. Segment your Customers by Value
High spending customers
•7% of total,
•50% of revenue,
$$$ •1,500 customers
•Avg Value: €1150
Value
(spend, profit)
Low spending customers
$ •93% of total,
•50% of revenue,
•20,300 customers
•Avg Value: €163
Your mileage may vary!

16. Customer Feedback Management - 1st steps
Order Confirmation Invoice Delivery Information
Invite by email Web Survey Plot the results Act on the comments
All customers to rate you on Ask Net Promoter question & Ask
every order for Comment Lots of Spreadhseet work! DISTRIBUTE COMMENTS
Graph, segment etc. to those who can use
Usually NO permission needed, but You can ask other questions about them.
explain up Front AND add specific issues and ask if further action Goal is to improve over time
“unsubscribe” option needed, but keep it short.
Expect 20 – 30% response

17. Segment your Customers by Loyalty
20,000 surveyed
25% response
Detractors Promoters
• 20% TOTAL • 45% of total,
• 1012 customers, • 2250 customers
• 19 gave “0” score • 1643 gave “10” score
☹ ☺
459 comments 833 comments
Detractors Promoters
LOYALTY
(Net promoter score)

18. Value & Loyalty Matrix
Customer Segmentation
Take actions to
Rescue
Key customers IN DANGER OF defecting
Value RESCUE REWARD
&
(spend, profit)
LOWER PRIORITY
Reward
Key customers who can help grow sale
Detractors Promoters
LOYALTY
(Net promoter score)
CustomerGauge Rescue-Reward
Retention model © 2010

19. Building your Loyalty processes...
Set up processes to continually
monitor customer scores and
feedback
Survey customers automatically
Data in from
e-commerce system
“we’d like you to trial our new
Prioritise customers product”…
Find urgent customers to be rewarded
to be rescued
You said you would recommend us
– thanks! We’d like to offer your
REWARD friends a £20 voucher to try us!
Call center
feedback
Measure
referred sales
Regularly report NPS results, Publish testimonials to
returning customers etc Learn from customer the web
feedback

20. ...and turn them into a Loyalty Robot
Automate where possible your
processes to continually monitor
customer scores and feedback
Survey customers automatically
Data in from
e-commerce system
“we’d like you to trial our new
Prioritise customers product”…
Find urgent customers to be rewarded
to be rescued
You said you would recommend us
– thanks! We’d like to offer your
REWARD friends a £20 voucher to try us!
Call center
feedback
Measure
referred sales
Regularly report NPS results, Publish testimonials to
returning customers etc Learn from customer the web
feedback

21. A real Loyalty Robot: CustomerGauge
• CustomerGauge is a system that
– Plugs into your ecommerce system to
automatically survey customers about their
experience, every day
– Brings voice of customer feedback into your
organisation
– Measures customer loyalty with industry
standard Net Promoter Score®
– Realtime dashboard to help improve customer
experience and retention sales
– Simple to use, quick to implement
– No hardware or software needed
• Optional extras:
– Workflow module to guide feedback to
appropriate department
– “Marketing Robot” to help you segment and
automatically target offers to most engaged
customers
Survey every transaction, automatically

22. Acting on Comments
• Best practices:
• Get regular feedback so you can manage it:
Daily/weekly is best!
• Classify comments to help prioritise issues
• GET COMMENts to the right people
• Act on customer feedback – within 24
hours
Problems! Suggestions Praise
Service issues Service Improvements Testimonials
Logistics
Logistics Returns etc
FINANCE
WEB

23. Automatically segmenting returning customers
Built in rules to
help rescue and
reward customers
Analyze the
response history
CustomerGauge from your most
helps you measure prolific customers
and understand
your VIP
customers
- J. Smith@directness.net
Look at individual
customer spending
patterns, and past
comments/scores

24. Strategic change management using CustomerGauge
SURVEY: Customer gives multi-choice
feedback on likes/dislikes
Understand root causes
SURVEY: Comments (Voice Of Customer)
Assign to project
managers
• To help make strategic change:
– Identify root causes of issues
– Put a value on impact of each Track NPS improvements
issue
– Set up projects to “Close the
loop”
– Track NPS improvement as a
result
Understand value / NPS impact

25. Root Cause Analysis
Waterfall chart: Company A: NPS 41
• What is going wrong (and
right?)
– Understand drivers of
promoters and detractors
• “Drill-down”
• Multiple filter options
Waterfall chart: Company B: NPS -3

26. Examples... real ones!
Senseo Chocopad
NPS input:
• price issue
• availability issue (online only)
• shipping costs
Close the loop outcome:
• bundle product
Result:
• NPS increase
• Sales volume decreased

27. The solution: a new landing page + bundle offer

28. Accessory compatibility
Your product identification for
The compatibility section is matching suitable replacement
hard to follow. "all above 6900 tooth brush heads is confusing.
except 6900", but there are The time that the compact
models with numerically larger head has been out of stock is The shop is way better than
numbers which have a unacceptable. before :) The only problem
separate compatibility. was finding the correct
If you are discontinuing a line, heads for my shaver. I had
Explicitly listing unsupported please simply say so to find the normal on-line
models would help too. shop to look up the
compatibility chart.
Could you put the link in to
the staff shop for it?

29. Consumer reviews (BazaarVoice)
Hosted: CustomerGauge Hosted: BazaarVoice
(last page of survey)
• Using CustomerGauge drove up BazaarVoice reviews 500%
– Info and image from DR feed into CG
– CG forms correct URL and security sign-in to BV

30. Marketing Output
• Testimonials

31. Marketing Robot: Rewarding loyal customers
• Promoters scoring 9 or 10 said they
would “recommend” the store
• Encourage them to bring other
friends in
• Use an introductory coupon to
offer to sweeten the deal

32. Loyalty Marketing
In a nutshell Testimonials, referrals,
Reward customers
“Fire-Prevention”
Strategic
Improvements
“Firefighting”
Continuous
Surveying Rescue customers Top tips!
one by one • Identify your most valuable returning customers
Net Promoter Score
and • Continually ask for feedback using Net Promoter
Voice of Customer Score methodology
• Rescue & Reward the most important customers
• Automate the process wherever possible: build a
Loyalty Robot
• Make it part of your company’s DNA – use the best
tools out there!
Thank
you
How did we do?
recy.me/bt6f
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