Improve quality. Cut costs. Go global. Management trends have evolved over the decades. But after implementing these measures and more, enterprises still face pressures like globalization, a highly competitive marketplace, and the perceived commoditization of many products and services. CEOs wonder where they can safely drive out unnecessary costs without eroding customer satisfaction and loyalty. How do they discover what’s important to their customers?
The answer is hearing and responding to the Voice of the Customer. Customer satisfaction is not only the primary driver of higher revenues, profit margins and growth, it’s directly related to customer loyalty and retention. This intimate relationship explains why so much attention is now focused on loyalty models like NPS and the Apostle Model.
Once an enterprise recognizes the power and importance of customer satisfaction, the question becomes, What’s the best way to measure and build on it? For many enterprises, like Thermo Fisher Scientific, the answer is selecting a loyalty index and implementing an accompanying loyalty program that emphasizes action.
Thermo Fisher Scientific, a world leader in analytical instruments, equipment, reagents and consumables, software and services for research, analysis, discovery and diagnostics, launched its customer loyalty initiative in early 2005. Their world-class products have set the standard in the life, laboratory and health sciences industry. But times — and customer preferences— change. Thermo Fisher Scientific leadership wanted to be sure their legacy business processes still met their customers’ needs and wants. They wanted to reexamine their service delivery and reevaluate business processes (especially customer-facing ones) with an ear to the Voice of the Customer, to ensure they’re as customer-oriented as possible.
In early 2005, a cross-divisional Practical Process Improvement (PPI) team was created, charged with finding the best way to measure and improve customer loyalty. After reviewing their options, Thermo Fisher Scientific’s Six Sigma Black Belts — experts in all aspects of process measurement and improvement — recommended NPS as their loyalty index.
Embracing a Loyalty Index
NPS measures customer loyalty by posing one simple question: Would you recommend us to others? The resulting score is the percentage difference between its "promoters" (i.e., the customers most likely to recommend) and its "detractors" (those least likely to recommend).
"We want to understand how our customers see things," explained Dan Shine, Vice President of Elemental Analysis in the Scientific Instruments Division. "Our goal is to empower our people to improve our processes so that we give our customers practical, perceivable benefits." In late 2005, Shine was named to lead the NPS implementation team.
Thermo Fisher Scientific’s rollout included the following key steps, developed with CustomerSat. In brief, the company:
- Embraced a loyalty index and branded it as their own
- Adapted it to their needs by choosing a partner with the kind of extensive market research and best practices skills that would provide objective guidance to complement Thermo Fisher Scientific’s in-house talent
- Made it the foundation of a comprehensive enterprise-wide customer feedback solution
- Used customer feedback to drive action and process improvement
- Tied the results to employee and management incentives.
To infuse NPS into the corporate culture, they branded it as the Customer Allegiance Score (CAS). More than a simple name change, the branding reflected and reinforced Thermo Fisher Scientific’s serious commitment to include the customer perspective in its daily processes. "CAS is now one of our key business standards," Shine said.
Next, they looked for a partner with the market research skills and experience to help them implement it most effectively. After carefully considering potential partners, Thermo Fisher Scientific concluded that CustomerSat offered the best value proposition for them by far. "CustomerSat was clearly superior in 8 out of 10 categories we assessed," Shine said.
To adapt NPS to their specific requirements, Thermo Fisher Scientific worked closely with CustomerSat Professional Services consultants. They recognized that the sole “recommend” question is only a starting point. "To really know what your customers want, you must ask (additional) questions," Shine said. "Whether it’s ten, 20 or 50 additional questions depends on your business. But you absolutely must ask for (more) feedback."
CustomerSat Professional Services ensured that Thermo Fisher Scientific's feedback solution measured all customer touchpoints. Additional questions were developed to yield a more comprehensive view of customer loyalty. "Their Professional Services team sat down with us and showed us the many ways we could use all this data," Shine said. "CustomerSat’s people, and the solution itself, really made the difference."
Today CAS is the foundation of an enterprise-wide customer feedback system. It’s a unifying factor in this diverse global enterprise, providing a common methodology and vocabulary for customer interactions and improvements.
Taking the Pulse of Customers
CustomerSat surveys measure customer satisfaction at important touchpoints, including Thermo Fisher Scientific's corporate accounts program, technical support, and order fulfillment.
A relationship survey is distributed to 3000–9000 customers per quarter. Each survey contains 20–30 key questions probing overall satisfaction, loyalty, willingness to recommend, and details of various interactions. CustomerSat’s solutions automatically alter survey questions depending on the customer, size, line of business, and region. This keeps surveys brief and relevant.
Customer responses, displayed in easy-to-read driver charts, pinpoint specific areas driving likelihood to recommend, as well as threats, opportunities and advantages. Managers can instantly see issues affecting loyalty for each NPS-defined customer segment (Promoters, Passively Satisfied, and Detractors). All non-promoters — anyone giving a score of 8 or below — are asked an open-ended, follow-up question:
"What can we do in the future to ensure that you would definitely recommend us to a friend or colleague?"
This gives customers a voice to articulate their experiences, priorities and suggestions.
Automated, intuitive and easy to use, CustomerSat solutions make it easy for employees at every level to find and interpret data in depth. "CustomerSat Enterprise, and especially the key-driver charts, tell us which areas are most important to our customers," Shine said. "They drive CAS scores and help us focus on their hot buttons."
Action is Imperative
By combining NPS with CustomerSat’s key-driver charts and in-depth online analytics, Thermo Fisher Scientific developed a comprehensive set of prioritized actions based on facts — not hunches — about what their customers really want. Customer feedback is useful only if it’s actionable. Actions, not scores, drive revenues and growth.
Surprisingly, although most global enterprises survey their customers, Gartner reports only about 5% actually take corrective action based on that feedback. At Thermo Fisher Scientific, continuous improvement through PPI is a top priority. Their Global Action Management program focuses on action. Taking effective action is made easier by Action Management™, a key component of CustomerSat Enterprise’s automated solutions.
For example, in each survey customers are asked if they’d like a Thermo Fisher Scientific representative to contact them. Each "yes" triggers an automated action alert sent to Thermo Fisher Scientific and routed to the appropriate account rep. The customer receives a follow-up call, usually within hours.
"It's really about empowerment," Shine explained. "Our customers are empowered to identify their wants and needs. Our employees are empowered to make improvements based on that feedback."
Thermo Fisher Scientific divisions monitor CAS scores during the quarterly relationship survey, and reports monthly on activities that address them. After updating its scorecard, each division applies that information in its investment and process decisions. Quarterly reviews explore cross-divisional synergies, with results reported to the CEO.
Thermo Fisher Scientific closes the loop with each customer. Reviewing survey results and follow-up actions boosts a customer’s satisfaction and loyalty. Unhappy customers can be converted to happy ones very quickly, depending on your follow-up. "They can go from ‘worst to first’ very quickly," Shine smiled.
CAS has made a profound impact on Thermo. It’s transformed their corporate culture and made it much more customer-centric. CAS is now an important factor in their incentive systems, and part of the goal tree for each business. At the corporate level, TCAS has taken its place beside key financial measures like revenues, cash flow and profit.
"It’s quickly become one of our key business metrics," Shine said, "along with things like on-time delivery and out of box quality."
Thermo Fisher Scientific's top management appreciates how CAS benchmarks performance across the entire enterprise, measuring the customer experience in multiple divisions. Adopting it enterprise-wide keeps everyone customer-focused, and speaking the same language. The steering committee, which includes a high-level business unit leader representing each division and geographic region, meets monthly to share issues, successes and best practices.
Because employee engagement is another important driver of customer satisfaction, Thermo Fisher Scientific has extended CAS to include employees, too. A companion program, Talent Allegiance Score (TAS), now measures employee loyalty and commitment.
"One of our main goals is to make our entire company more customer-focused," Shine concluded. "We want everything we work so hard to improve to have a tangible benefit for our customers. We feel that CAS will ultimately get us there."
