Carphone Warehouse puts emphasis on Customer Care

Three cheers for Carphone Warehouse!!

Alexandra Fean’s article in last Saturday’s Business section of The Times discussed Carphone Warehouse’s decision to reward staff on service rather than sales. She did not go into a lot of detail but I can report that they are using the Net Promoter©* scoring methodology to measure customer satisfaction and reward staff according to their performance.

This is very good news for the consumer. In our annual review of Customer Care conducted for the Customer Care Alliance the major electrical retailers were always notorious for their total disrespect of customer care – although I must say Carphone Warehouse was not noticeable amongst the “bad boys”.

CPW has always positioned itself as giving independent advice on the networks and handsets available and, of course they are now leading players in the land-line telephone business as well as the Internet market place. But in the past they rewarded their employees by sales commission rather than service performance. Now, as I understand the plan, stores earn a bonus upon hitting sales targets but this can be doubled if a high level of service is also achieved.

As mentioned, CPW is measuring customer satisfaction using the Net Promoter measurement system. The Net Promoter scoring system is a very demanding one. It is a methodology I rate highly and use in Surveylab quite widely. In a nutshell customers are asked to rate the service they receive on a scale of 1 to 10 usually asking whether they would recommend a business or organisation to a close friend or relative based on the service they have received.

A Net Promoter index is then calculated by taking the total scoring 9 or 10 (termed Promoters) and deducting those scoring 1 – 6 (termed Detractors) and then dividing the total by the number of all responses (including those scoring 7 or 8 (termed Passives). Read Fred Reichheld’s book “The Ultimate Question” for a full understanding of the concept.

CPW is using technology to collect scores by texting customers on their new phone. They ask for and collect a score out of 10 for service plus a verbatim comment. The results are then published on a special website where staff and management can review their results. Scores are tracked back to the individual sales person who dealt with the customer in-store.

I am sure the process will provide CPW with the edge on its competitors but I have heard of a few teething problems in the pilot area. Firstly, I understand that many staff don’t yet have confidence in the process – they are seeing positive verbatim comment matched with negative numeric scores. Also sample sizes are small leading to wide variances of results. But, more importantly, the scores required to trigger the bonus appear too high. I heard a score of 80 mentioned which is quite a demanding score to achieve in a fast moving retail environment. And CPW also needs to consider that the front line cannot control all service factors. They can be courteous, helpful and understanding but if the phone is out of stock or the system is down a 10/10 score maybe beyond their control.

If it were me, I would, initially, at least, look at the range of scores and reward staff on a sliding scale based on achievement compared to a CPW average score. Yes, that score should increase over time but, for now, staff need to have confidence in the process.

Whilst popular in the business world, some academics and market researchers have been critical of Net Promoter. One concern is the use of “willingness to recommend” as measure of satisfaction and loyalty and another is basing results on just a single question. At Surveylab we don’t have a problem with the question itself but do believe you also need some diagnostic questions to interpret the reason for a particular score. For example when dealing with personal performance, supporting questions dealing with courtesy, timeliness, knowledge, understanding customers’ needs, etc. may be included.  I also feel that its not the score itself that is important but the variances recorded across the organisation. Look for those that score high and using the diagnostic questions identify the skills, behaviour, knowledge and motivation that are responsible for them. Then define a strategy to maximise the strong  and develop the lower performers.

It is still early days for CPW but I hope they will overcome any negativity amongst their sales force. It is vital that the process needs to be fully understood by the people being measured and rewarded. I assume that there has been some form of staff briefing and training already but maybe more is needed to ensure a fully committed buy-in to the process.  Perhaps, also, an initial relaxation on the scores required to hit bonus. With a little tweaking I am sure that CPW will prove to its competitors that customer care pays.

*Net Promoter and NPS are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc