Why we think a customer centric strategy must be an employee centric strategy first.
Cedreo, and the Karma with American sauce
In a previous article, I explained Why we don’t have outside shareholders anymore and why we won’t raise funds to develop our SaaS business at Cedreo (for the moment, at least).
I also explained that our SaaS business model brings a virtuous obligation : our customers satisfaction is a sine qua non condition to be able to build our future. You’ll answer … that’s the case for every company ! But I’ll reply you that it may be even more the case in the SaaS business because our customers trust by renewing their subscription each month.
Generally speaking, in our offer economy, customer experience and value delivery are more and more important, because it’s more and more difficult for companies to differentiate what they do. It’s a fundamental change in both B2C and B2B businesses. We may wonder why companies don’t recognize this revolution and organize and manage to improve their value delivery. We see some signs of change, but it’s still not a revolution.
We live by this conviction : giving the best customer experience starts with giving the best employee experience possible to our team. Fortunately, pleasure is one of our 5 core values. And the results prove it : 50% of our customers come from referrals. It seems to work !
Note : For those who are not interested in how we created our ideas, I invite you to skip to the next section (convictions)
To begin with, I think it’s important to salute some predecessors, and the first is Southwest Airlines.
In the 80’s, Southwest Airlines defined its mission as « We are committed to provide our employees a stable work environment with equal opportunity for learning and personal growth. Creativity and innovation are encouraged for improving the effectiveness of Southwest Airlines. Above all, employees will be provided the same concern, respect, and caring attitude within the organization that they are expected to share externally with every Southwest Customer. »
In 2010, Tony Hsieh wrote “Delivering Happiness” in which he describes how Zappos (later sold to Amazon for $850M) built matchless customer service by first building first a matchless company culture.
The same year, Vineet Nayar, CEO at HCL Technologies wrote “Employees First, Customer Second”
in which he says that “by [placing] employees first you can actually deliver your promise of customers first. If you do not put the employee first — if the business of management and managers is not to put employee first — there is no way you can get the customer first.”
Then, the concept of symmetry of attentions appeared in France. Its main principle is that there’s a symmetry between the quality of relations within a company and the quality of its relations with its customers.
At Cedreo, we know that time is very precious. Our solutions help our customers to save time. When they need to use our software or need assistance, we have to give them the best experience we can for that reason.
We live by this conviction : we must give our customers the best user experience. To do that, we must start by creating a matchless experience for our team. Thus, we launch the promoter flywheel.
In practical terms, feedbacks from the trenches seems to confirm this theory.
This excellent article from HBR demonstrates that companies’ growths is directly correlated with their customer engagement (measured by NPS as we will see later).
This graphic shows clearly that customer satisfaction is correlated with employee engagement :
To deal practically with this theme, we started by considering the best KPI to track to see how we are progressing.
We have chosen NPS (Net Promoter Score) and ENPS (Employee Net Promoter Score). If our theory is valid we should get NPS = ENPS. Then our work is “simply” to get a maximum result based on these metrics.
Why NPS ? What is it ?
NPS is a tool to quantify customer experience (ENPS measures it for teammates). Its main advantage is to avoid the average bias.
The principle : Ask a question and score the result from 0 to 10
For NPS : How likely is it that you would recommend Cedreo to a friend or colleague?
ENPS : How likely is it that you would recommend Cedreo as a place to work to a friend ?
Answers are interpreted as follows :
From 0 to 6 : Detractors
7 or 8 : Passives
9 or 10 : Promoters
NPS (or ENPS) is % Promoters — % Detractors which gives a result from -100 to 100.
Let’s take an example with a sample of 10 persons :
- 3 persons give 6
- 4 persons give 8
- 3 persons give 10
Average of scores is 8/10. We can consider it as a good result.
But NPS gives us 30% promoters — 30% detractors = 0. Now we can see we have some work to do on customer satisfaction :-)
For your information, ENPS of employees in Europe (their engagement and satisfaction) is … -10! (https://www.deep-insight.com/what-is-a-good-employee-net-promoter-score/
To quantify our ENPS we used Supermood which is an online survey tool dedicated to human resources. We can also ask other kinds of questions each month (is strategy clear and OK ?, etc.) each months.
Results are anonymous and we can analyze them by team, by role …
To quantify our NPS, we used Delighted which is directly integrated into our solution. We ask the NPS question one time per quarter. We think we will do it twice a year because as our role is to help our customers save time, and the less they have to click, the better :)
With a result of 74, Cedreo ENPS is very high generally speaking, and in comparison with other companies in our field and more generally speaking. We may consider it as a world-class result.
Maybe our recent retreat in Berlin helped us :)
If we have a look at our progresses over 18 months of use, it’s interesting to see that we are always improving. We can detect problems quickly in teams and we can act rapidly to solve them.
ENPS, and particularly ENPS per team, has become a very important tool for managers.
And the NPS = ENPS theory seems to work because we have a very good NPS too : between 51 and 65, depending on the user’s country. With this kind of score we are in the top 10% in the software industry and we know what to do to be in the top 1% (we are working hard on it).
Our customers seem to be grateful, and we even have a net negative churn in some of our customer segments. Thanks a lot dear customers !
Note: Some studies demonstrate that a good NPS is not enough to get good churn metrics. NPS is not well correlated with low churn, and other metrics like engagement are important to get low churn.
