Ep. 225: Jason Barro | Trapped: The Hidden Forces Behind Counterintuitive NPS Results

12/21/23 • 33 min

Customer Confidential: Untold Stories of Earned Growth

How do high-quality NPS benchmarks unlock strategic priorities and initiatives? What if your NPS data seems highly counterintuitive? For example, what if Detractors seem to be more loyal than Promoters?

Host Rob Markey and Jason Barro, a partner at Bain & Company and the leader of Bain's NPS Prism benchmarking service, unpack this situation in the airline industry. It’s an illustration of how Net Promoter Score benchmark data might be misleading when not all customers have the freedom to choose, revealing the nuanced understanding required to transform raw data into strategic business insights.

Jason and Rob use this example to explore some of the ways a sophisticated knowledge of how customers buy, the choices they have available, and how a market’s competitive dynamics inform the interpretation of customer loyalty benchmarks like NPS.

Episode Highlights:

Introduction to Jason and NPS Prism [01:02]
Using NPS Data for Market Insight [02:05]
Exploring the complexity of NPS in different industries [05:12]
Concept of Trapped Customers [10:17]
Earned Growth Strategies [23:52]
Banking and Insurance Customer Dynamics [27:22]

Quotable Quotes:

“The more captive you are, the more likely you are to give high share of wallet to somebody that you don't like very much.” [15:53] - Rob Markey

“One of the effects we see in the Prism data for airlines more broadly is that high frequent travelers are happier than low frequent travelers.” [18:06] - Jason Barro

“You can see this strategy of, ‘Earn the respect and happiness of your customers,’ is a path to profitable growth, and you can see...just how much it actually matters.” - Jason Barro [23:28]

Additional Resources:

NPS Prism by Bain & Company

Net Promoter System Overview

Listen to Jason’s earlier podcast, NPS Prism: The Source for True, Deep NPS Insights

Bios

Jason Barro

Rob Markey

Get in touch:

We’d love to hear from you. Help us enhance your podcast experience by providing feedback here in our listener survey. https://bit.ly/CCPodcastFeedback

Send Rob a note here.

Episode Highlights:

Introduction to Jason and NPS Prism [01:02]
Using NPS Data for Market Insight [02:05]
Exploring the complexity of NPS in different industries [05:12]
Concept of Trapped Customers [10:17]
Earned Growth Strategies [23:52]
Banking and Insurance Customer Dynamics [27:22]

Quotable Quotes:

“The more captive you are, the more likely you are to give high share of wallet to somebody that you don't like very much.” [15:53] - Rob Markey

“One of the effects we see in the Prism data for airlines more broadly is that high frequent travelers are happier than low frequent travelers.” [18:06] - Jason Barro

“You can see this strategy of, ‘Earn the respect and happiness of your customers,’ is a path to profitable growth, and you can see...just how much it actually matters.” - Jason Barro [23:28]

Additional Resources:

NPS Prism by Bain & Company

Net Promoter System Overview

Listen to Jason’s earlier podcast, NPS Prism: The Source for True, Deep NPS Insights

Bios

Jason Barro

Rob Markey

Get in touch:

We’d love to hear from you. Help us enhance your podcast experience by providing feedback here in our listener survey. https://bit.ly/CCPodcastFeedback

Send Rob a note here.

Previous Episode

Ep. 224: Conny Kalcher | Stackable Strategies: Adapting an Iconic Toymaker’s Customer-Centricity to Zurich Insurance

From reshaping the playful culture of a global toy company to cracking the customer-centricity code at Zurich Insurance, how did Conny Kalcher manage the leap?

Conny Kalcher, now the group chief customer officer at Zurich Insurance, has a rich history of pioneering customer-centric transformations. Conny introduced a swath of fresh perspectives and approaches to the more traditional environment of Zurich Insurance. She did this not long after retiring from a rewarding career at LEGO, where she helped a customer-centric transformation. Her influence transcends the boundaries of any one company, partly a result of her active participation in Bain's NPS Loyalty Forum, where she has made large contributions to the ongoing Net Promoter System movement. For context to today’s discussion, you might want to listen to her conversation with Rob Markey in episode 55, Brick by Brick.

In this episode, Rob and Conny delve into her remarkable journey from the playful and imaginative domain of toys to the structured and staid sphere of the insurance business. Conny's customer engagement methodology breaks industry molds. She draws parallels and contrasts between her long career in an organization selling toys made of stackable bricks and her new role in a complex global behemoth selling insurance policies and managing financial and operational risk. Conny’s anecdotes reveal that most of the principles behind understanding and catering to customer needs are universal, regardless of the specific type of customer or product. As Conny reminisces about her time in the toy industry, she sheds light on how the lessons learned there acted as a catalyst for nurturing a customer-first culture at Zurich Insurance. It illustrates how a keen understanding of customer sentiments can be a game-changer in any industry.

Topics covered:

Transition from the LEGO Group to Zurich Insurance [02:20]
Customer-centric transformation [04:00]
Corporate strategy and vision [06:50]
Metric implementation (NPS) [07:07]
Decentralized vs. centralized organizational structures [11:00]
Earning customer loyalty [24:30]

Quotable quotes:

"Anybody who needs to change something I would definitely advise to also think about, 'How can we do processes, structures, ways of working to make people naturally change,' because people want to do the right thing, basically." [01:45]
"We've defined our strategy for this strategic cycle to become the preferred insurer of our customers. So, it's all about earning the loyalty of those customers." [27:15]
"My proudest moment in the Zurich [Insurance] journey is when I go to the local offices and I talk to the people there and I see the fire in their eyes, and I see the new brand on the walls, and they talk in a new kind of language that they didn’t use to talk in." [32:37]

Additional resources:

Zurich Insurance’s long-term strategy and near-term targets
Episode 55 of Customer Confidential Podcast: Brick by Brick: Rebuilding the LEGO Group by Rediscovering Customer Centricity
Net Promoter System overview
Insurance industry reports by Bain & Company

We’d love to hear from you. Help us enhance your podcast experience by providing feedback here in our listener survey. https://bit.ly/CCPodcastFeedback

Bios:

Conny Kalcher, group chief customer officer at Zurich Insurance
Rob Markey

Next Episode

Ep. 226: Ruth Veloria | Purpose-Driven Progress: Helping University of Phoenix Students Succeed

How do the needs of students at for-profit, mostly online colleges differ from those of typical college students? They often require financial aid, schedule flexibility, and academic support that can go far beyond the norm of traditional higher education. In this segment, we explore why graduation rates have traditionally been quite low at these colleges due to all the challenges students face. How do schools like this strike an appropriate balance of flexibility, support, and rigorous academic programs that will help their students succeed in the workforce?

Ruth Veloria is the chief strategy officer and customer officer at the University of Phoenix. She is on a mission to help more of the school’s students successfully overcome challenges so they can complete their studies and reap the rewards of their education. Ruth and the team at University of Phoenix have spent over a decade working to improve student retention and success rates.

In this episode, roughly a decade after Ruth first joined Rob on the podcast, she shares how the University of Phoenix has achieved a remarkable increase in student retention rates, from 64% to 74%. They now graduate over a third more students than they did 10 years ago. Ruth discusses how the Net Promoter System helped fuel the university’s deep commitment to learning from and acting on student feedback. She describes academic policies that are empathetic versus unempathetic, and how data analysis and feedback have been used to enhance student experience and to support policy and process change.

Give Us Feedback:

We’d love to hear from you. Help us enhance your podcast experience by providing feedback here in our listener survey. https://bit.ly/CCPodcastFeedback

Send a note to host Rob Markey: https://www.robmarkey.com/contact-rob

Episode Highlights:

Overview of a subscription-like model for student enrollment [03:15]
Transition of Ruth from the School of Business to strategy and customer experience leadership [07:10]
Approaches to student retention and success [11:45]
Utilizing data analytics and technology to improve student outcomes [16:25]
Adapting to Covid-19: Impact on student experience and education delivery [20:55]
Insights into student acquisition costs and orientation processes [25:30]
Reflections on the implementation and evolution of the Net Promoter System [30:15]
Ruth’s advice for educational transformation and future goals [35:00]

Quotable Quotes:

“We went from a 59 Net Promoter Score up to a 73 Net Promoter Score.” [16:33]
“We created a lot of entrepreneurs. We got a lot of people excited about changes they could make in the student experience.” [24:19]
“We actually set up a pilot team that was using a business leader and tech leader to come together to fix application problems. In fact, we still have that today.” [25:06]

Guest: Ruth Veloria, chief strategy officer and customer officer, University of Phoenix

Host: Rob Markey