In the Crisis of Disconnection, the solution is Customer Love with Maureen Burns

Hello, my name's Adam Durrell and I'm the host of the Account Experience podcast which if you've listened before, you'll know we're at the interaction of B2B account management and customer experience. That's what we call it, Account experience. And every week I get to talk to an industry leader to share best practices and tips to help you develop your program and compare yourself to world class leaders. So if you like what you hear, don't forget to review us and share because it does help spread the wor and get our open source knowledge out to everybody. Today I'm talking with Maureen Burns. Maureen is a senior partner in Bain and Company's Boston office. She's been with Bain for 18 years. You'll know that Bain is one of the world's top management consulting companies. So pretty good experience to bring to the to the podcast. She's a leader in Bain's customer strategy and marketing practice and she's advising clients on a range of issues including corporate strategy, customer experience, transformation, you know, especially with new digital channels coming in and of course implementing the net promoter system in both B2C and B2B contexts. And I think most interesting to listen to this podcast, she's co author of our book of the year, Winning on Purpose together with Fred Reichelt. That's what we're going to be diving into today. Hello Maureen, welcome to the podcast. Thank you so much for joining us.

Thank you so much for having me.

I've seen you on presentations, I've read the book, of course, big admirer of your work, but first time we've got a chance to speak face to face. So how are you doing?

I'm great, thanks. It's finally summer and coming to Boston, so the world is good.

Yeah, it's really nice. I was in New York last week and really enjoyed the weather. So it's great to be talking again on this. Listen, before we get into winning on purpose, why don't you tell us about how you got started on the whole CX track.

Absolutely. So I was lucky to join Bain right out of business school and land in the Boston office where a name that many of you may have heard of, Fred Reichelt, was doing work on customer loyalty. And so over the last many years at Bain, I've had the opportunity to learn from Fred and some of our other great loyalty practice founders and work with clients on the topic. I started in financial services where you can easily quantify the benefits of customer loyalty. So has been one of the industries at the forefront of the topic, but have used that experience and moved on much more broadly across different industries.

Yeah, I mean, it's really interesting to me to read the book because it really moves on from the last books about Net Promoter and it talks about customer love and there's so much about emotions and almost like irrational decision making in the book. So that's what I want to try and get into. But how did you get involved in the book project and, and take that forward?

Sure. So I have been working on Net Promoter for many years at Bain and love the topic and have enjoyed working with all of the other Bain partners on this and had gotten to know Friend through the years doing that. He and I had dinner before, you know, a while back and he said, maureen, I wanted my next book to be about customer love. And I was working with a pretty hard nosed banking client at the time. And I looked at Friend and I said, Fred, I cannot imagine walking into a boardroom and talking to my clients about customer love. I think they'll throw me out the door. And he said, well, just hear me out. And we went on to have this lovely dinner where he explained to me that the core concept of this book was that the primary purpose of a company should be to enrich the lives of those it touches. And isn't that really the definition of love? And by the end of dinner, I was convinced and soon after that joined Friend to co author the book.

Look, I'm with you on that. When I was reading this, I'm thinking, wow, who's going to accept this? But I also really love the concept. I think it's. And especially as we come through Covid and we think about, you know, labor shortages and then this sort of thing, I think the concept of really looking after your customers really resonates more than anything else. But how did it go from there? Because, okay, so Fred's convinced you about this. How did you like, reset your thought processes to get into preparing for the book?

Well, there were two things that were really important to me. The first was I needed to firmly believe that if we were going to go out there with a customer love message, we could say irrefutably that there was no trade off between loving your customers and delivering outstanding financial results. And inherently I kind of knew that because we do loyalty economics with every client we work with at Bain on nps. But I wanted to really work with Fred to prove it at scale. And so as a part of the book process, we did a ton of analysis looking at total shareholder return for loyalty leaders versus loyalty laggards, if you will, over many, many years. And what struck me was industry after industry, we saw the same patterns that the loyalty leaders far outperformed. So that was one piece of it. The second piece that I, that I wanted to get comfortable with was the question of is there anything about this sort of new digital age that makes our traditional approaches to loyalty and NPS less relevant? And I went out and actually talked to a bunch of digital native companies and a bunch of investors in startups to say, you know, how do you think about nps, how do you think about the role of loyalty in a digital world, et cetera, et cetera. And what struck me was a lot of the newer, more successful companies are what we almost call born rich, where they were born in the age of loyalty. And as you really dig into how they've set up their whole business, all of the components of loyalty and net promoter are built into the way they operate. And so I came out of this actually more convinced than ever that this was the path to success and was going to be even more important in the future.

So I think it's a really good track into it. So I actually started to do the research and again, I'm a huge fan of the book and the work that's in there. Did the results surprise you? Because when you get to chapter five, you see these, the charts, and they really jump out at you and say, yeah, okay, this thing really works. Was that a surprise to you when.

You did it, or I would not say it was a total surprise because like I said, when I work with clients, I can show you that a promoter of customer of theirs is much more valuable than a customer. Someone that loves you is more valuable than someone that doesn't like you. And so I knew that. I know that there is an inherent correlation between driving great customer outcomes and financial results. What did surprise me was the scale of that differential. So that the companies that were doing well in this dimension were far outperforming. And I think that's because what we probably had underestimated was the multiplier effect of customers that promote you. And so particularly in an age where we are moving more towards what I call customer driven marketing, where customers are promoting brands more, they're taking your message away from you, frankly, and taking control of it. The idea of this promoter multiplier is incredibly powerful and I think will be an even bigger differentiator for loyalty leaders in the future.

Yeah, I'm going to drill into that a bit more because I think in the Past there's been this assumption if you do the right thing and you get promoters, it's going to have a positive effect and then you prove it. What I love about the book is you go into an absolute recipe of how to do this with something that you've called earned growth. Can you tell me a little bit about the genesis of that and about how that's being accepted by companies?

Absolutely. So for a long time we wanted to have some kind of almost accounting based metric that could complement nps. NPS is a great indicator of future results, but it's hard to link back directly to the financial results. And so what happened luckily was Fred sits on the board of First Republic and he was prepping for a board meeting and there was this really interesting slide that showed their loan and deposit growth and it broke it down into how much of that growth had come from existing customers staying longer, you know, less churn, buying more from First Republic. So giving them more of their loans, more of their deposit share and referring them to friends and family versus customers that were what we would call bought through paid marketing. And this was a real aha moment because this is kind of. It was boiling down loyalty economics into one simple metric that we called earned growth. And the concept of the idea that one company, two companies can have the same growth rate, they could both be growing at 20%. But just like there's good and bad profits, there's good and bad growth. And a company that earns their growth gets most of it from their existing customer base. A company that buys their growth is having to actually go out and spend more sales and marketing dollars to constantly replace customers that are churning. And they're not getting the benefit of referrals, they're not getting the benefit of greater share of wallets. They're just on this treadmill of paid marketing.

Yeah, I think so. I really see that. And it's incredible to think that most of the businesses I talk to are not measuring their referred customers at all. They don't know how much their business is referred to, let alone bought customers or earned customers. So how has that message been accepted by businesses that you've been speaking to?

They love the concept. I think it's a really simple way for people to think about quality of growth. What I will tell you though is it's not easy. There are a lot of companies that can't even tell me how many customers they have, let alone be able to have the systems in place to trace. Now B2B is different. You know, some of what you Know the foundation of earned growth is kind of how SaaS software companies for years have thought about net revenue retention. So I'd argue B2B is a place that is ahead in terms of thinking about those loyalty economics. But when you go out to B2C companies, they can't tell me how many customers they have their systems across different products, don't talk to each other. And so in some ways I think it's a good, a good kick, if you will, to start to actually get better on all these dimensions of customer based accounting.

Well, it's also true because I know some of the work that you do in CPG companies, it's hard to track an individual company because you've got multiple elements of the channel in place as well, so you know who's a customer and so on. But I agree. And your example of B2B companies knowing it better is not always true. I've got to got to be honest.

In my experience, fair. And what I would say is I tell companies, look, you should go on. This may be a journey in terms of how sophisticated you get about calculating your earned growth, but even just starting that journey is going to start really interesting conversations around, you know, it starts at the basic level, do we know, do we have this data to even be able to do it? And then the question of are we tracking referrals and how many customers are we getting? So I would say, you know, just get started and I think good things will come.

But it is quite interesting, Maureen, if you don't mind me saying. To me, the net promoter in the past seemed to be quite focused on customer rescue. More like the customer success side, which is often seen in the business as a cost. But earned growth really puts it front and center. In the sales side, it's about referrals and bringing new business in. Have you seen a change in the way that people are thinking about Net promoter as a result of that shift?

I do. I think people have realized if you think about when I work with a client, we always talk about the journey. And if you're not good from a net promoter standpoint, it does start with fixing the basics to get rid of detractors. Right. You know, you just get rid of some of the egregious things. But then over time you're developing these great promoters. And what I would say is it almost reflects the maturity of where we are from a customer experience perspective, which is a lot of companies have fixed the basics like they've done a lot of the hard work and a lot of Them have invested and created these great promoters and now we're saying, but you're not doing anything to get the true value out of these promoters. You've invested in delivering amazing things to these customers. You've also now got to think about how do you ask them to give you something in return.

It's hard to do that isn't.

Isn'T, it isn't. I think, you know, and in B2B, you know, I think about what we do at banking. When I start working with a new client, I often will bring an old client as a referral and then I tell that client, hey, my goal is that I'm going to do such great work for you like I did for that client, that I'm going to bring you to my next potential client. And so creating this kind of notion from the beginning that you know, I'm going to deliver such an amazing result for you that you're going to want to tell other people about it. That philosophy to me should be the core of how any business thinks about its customers.

Well, there you go. But that's actually earned growth in a nutshell, isn't it? But you said that you've set the scene up front. It's like a contract you have with the customer. I'm going to really. You're going to. But you're going to do so well together. You're going to tell, tell other customers about it. I think is really valid in a way. It's a kind of old fashioned way of going about doing business. Right. It's a relationship thing.

It is. And it's a subtle contract. And some of the most powerful conversations I've had with my clients have been, remember when I told you that I was going to do such a great job on this that you were going to refer me. Are you feeling that way right now? And I've done that in the middle of projects and I've done that. Sometimes the answer wasn't not so much. And that's really interesting and valuable data because it helps you course. Correct.

But I love that. But that's such a human question. You know how you're feeling about this now? I mean of course we can codify it into the net promoter question, but it's really a proxy for that human relationship thing. I love that, that, that human feedback you've got. So yeah, that's a really good. And has it been working for you? Did you ever get a time when somebody would tell you to your face effectively like a detractor?

I have and I think that, you know, I. Ideally not at the end of any project, that's the goal. But during, I mean the work many people do is difficult and you can't, you know, there's often in the work I do often has some tricky organizational challenges and it's often hard to navigate all of that and have everyone be happy. But having those dialogues is so important. And that is the fundamental reason why I believe that Net Promoter is going to continue to be so valuable, which is it brings the humanity into the work we do into business.

And again, I think it closes the loop a little bit on why it's customer love. Because feedback, it's a very tough thing to accept. First of all, you have to be very open to it and it's really at the heart of any relationship. So how have you been able to get people to accept it? Coming back to the customer love point, how does that work for you?

The biggest thing is that you have to set an environment and a tone where the feedback is a tool for learning and is not about, you know, it's not a bad thing to get negative feedback and that's a hard thing to do. But that is the first thing I tell all my clients. If you're serious about this and you really want to get the value out of Net Promoter, you need to create a safe environment where your employees, and we talk about this in the book, in that section on Inspire Team where your employees really understand that you are providing them and the mechanism for feedback so they can hear directly from customers how they're doing and that you as leaders are here to support them and help them get better. Not to be creating an environment where they're terrified to get a detractor comment.

Yeah. And that happens when. Well, I, I don't know about you, but I see it when people are bonused on Net Promoter scores, that really has the, the worst effect.

I think it's a really tricky thing and it's, it's a difficult thing because, you know, I spend a lot of time working with clients and telling them how valuable Net Promoter scores are and then I have to spend time telling them, yeah, but don't comp your frontline teams on Net Promoter. And they look at me like what, what, what, what? Why? You know, I'm supposed to like, I'm, I usually get results when I comp people on something and it takes a lot of, a lot of discussion to, to help people understand that you will actually get the best results when you remove that pressure from Net Promoter and allow it to be the learning tool it was designed to be. And over time, you can compound metrics that are correlated with net promoter, like client retention and things like that. But take away the immediate pressure on the net promoter scores and comments and let that be something that employees can truly learn from.

Yeah, I totally agree, but I'm going to go deeper now and ask you a tougher question. And what about the situation where someone's getting amazingly great customer results or growth results and. But they're not getting a good net promoter score? How do you see that? Are those two things in conflicts?

I think that they generally are. And I will say that there's, I mean, the most visible example of that is Wells Fargo, who was in our benchmarking for years. And I would go to banking clients and talk to them about the scores. And Wells was the only bank where there wasn't a strong correlation between NPS and the fact that they were selling a ton of products to customers and doing really well financially. And everyone would say, okay, I sort of understand that you think NPS is correlated with financial results, but why does Wells Fargo look so different? And I couldn't answer the question. You know, I didn't have a good answer. You know, I said, I know that they have strong incentive plans, but we saw later that I don't believe you can generate growth like that sustainably without loving your customers. And that came, that came true. And you see that again and again. You could generate short term growth, but it's not going to be lasting unless you really and truly love your customers.

It's a short term gain. Long term pain is really what you're saying.

That's right.

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But this is, I mean, we're going into a tough economic cycle right now and really looking at probably the first thing we're going to look at. How can we, how can we cut the cost of our customer life? So what are your thoughts on that? What should be businesses be doing now as we, as we navigate this current cycle?

Honestly, I think the most important thing is to get the economics really well understood. And so if you don't know sort of the value of retaining an existing customer versus how much it's going to cost you to acquire a new one when you lose that customer, you should figure that out. If you don't know kind of the lifetime value of a customer that you're able to sell multiple products to versus someone you get in for just one product, you should figure that out. Because I think when you do that mana, it becomes abundantly clear that the best investment you can make is in your existing customers. And of course there's always some paid marketing that's required. But so many companies I see do this math in silos and they end up having ROIs that aren't real and they make poor decisions around just putting more dollars in paid marketing. Because you can calculate a very short term ROI easily without going through the math of what it really would, what those dollars would yield if they were invested in existing customers.

Oh yeah, I hear what you're saying. I call it the addict, the acquisition addiction, because it's quite easy to calculate the cost of bringing a new customer. Probably easier than it is to work out what it costs to look after your old. But I agree, I think the economics are screwy.

I think we're off balance and it's company that's going through the work. To look at this more holistically, you get more in balance and especially as you go into a tough environment, it helps you make better decisions. And by the way, paid marketing is getting so competitive, it's just ROIs are constantly coming down. So I think any company that can shift more of its dollars away from paid marketing towards existing customer marketing will be at an advantage.

I agree. But the paid marketing people make it so easy for you to get, you know, to work out your spending. And it looks like it's really scientific, but then you, of course you forget.

It is in that, you know, in that narrow band. It's very scientific, but it needs to be scientific across all of the places you could invest money for growth.

So let's now, let's get back to the earned growth metric because this really seems to be one of the, by the way, one of the ways of getting our way out of this economic cycle, I think is to look after your clients. You said before that you're thinking about it becoming an accounting standard. So how is that going? Do you see that? That's the way forward and if so, when.

Yeah, I mean, I don't know if it'll ever be, you know, audited. Fred's dream is that this is an auditable metric. I mean, I would love it to just see lots of companies calculate this number. What I will tell you to be, to be totally honest is the referral piece of it's not easy. And so to do an accurate, you know, the net revenue retention piece, which is like, as I said, it's been used in SaaS software for many years. That is something most companies should be able to calculate. Maybe not today, but once you get your systems talking to each other, the referral piece takes a little work because you need to be able to ask the customer. And so in a lot of industries that's pretty Easy to embed in an onboarding process, but you have to track it. And I'm hopeful that over time with data and analytics it'll be easier. So I would say I'm really bullish about earned growth, but I also want to acknowledge that getting that referral, tracking right takes a little bit of work.

Yeah. I think it's also from experience and it's quite hard to really get that data out. It's almost like a soft border as well because customers don't always know if it was referred and it's. But I think.

Yeah. And what I've been telling clients is because there's a lot of debate around, well, what does count as a referral? What's really reputation. I think having the dialogue around how you think about classifying different sources of growth is incredibly valuable. And there's always some gray area and I think that's okay. You know, I think it's just define what's a true referral and be tracking that and then acknowledge there's this gray area which we like the gray area better than the fully paid area. And just kind of starting to think about how you're getting your customers in that way is an incredibly valuable discussion to start having.

That's a good way of putting it. As he worked on the book, was there anything that really surprised you that came out of the research that you were doing? Did something jump out and go, oh wow, that was, that was not something I expected.

You know, I think some of the companies that, that jumped out. So first, First Service is this company that Fred's identified a while ago and has worked with for years. But they have tsr, they manage residential communities. They also own Certapro Painters and California Closets. They have TSR that's in the league of Amazon and Apple.

TSR's total shareholder returns. Right.

Thank you. Yes. So how much am I delivering to shareholders? So they, they literally have been at the, you know, delivering returns with these businesses that are not necessarily high growth businesses like we've seen in tech and that is driven by this amazing loyalty model. Just they, they embedded everything they do. So finding companies like that that have just broken the mold of traditional industries by having this loyalty driven model is so interesting. And then the other thing is as we talk to different companies and we talk to customers, we all focus on these moments of truth. And yes, those things are so critical. But as you talk to people about what really creates loyalty leaders over time, it is the day to day stuff. It's the little things that I think add up to something big. And we actually chose to focus the end of the book. We were looking for a big story to end the book on and we ended up ending it with like a small act of kindness because I think that over time it's those small acts of kindness that add up to a lot of love.

Yeah, I, I, I think it's really. No, I mean I, I, I really bought into this. But it is, it sometimes explaining that it's a book about love is makes people's eyes pop out, really.

Imagine me talking to my colleagues at Bain.

But it does relate back. I mean, Fred told me that he, he didn't think about Net Promoter initially. He called it Net Lives Enriched, which the stories right there. So if we think about the whole future of the Net Promoter movement, like how will this laugh be accepted in it? Do you really think that's going to be the core of it or is it going to come back to hard economics? Tell me about how you think it's going to evolve.

Well, I think of these two things as completely linked. So it's like the heart and the head. Right. And so to me, the love element as measured by NPS is, is truly the heart of it. And then the head is earned growth as you know, as measured by financial metrics. And that when you, you know, running a bit, I believe running a business in this next however many years is going to take leaders that can really get the heart and the head right. And that's what's going to create the true winners. So, so I don't, I don't think there's one or the other. I think you got to do both.

You know, Maureen, a lot of the examples that you've given are kind of B2C oriented. How do you feel about the way that B2B differs? The whole account experience part? Can you, can you tell me a little bit about that?

Absolutely. I think Net Promoter is actually, I don't want to say, I dare say more valuable in B2B but perhaps because the value of clients can be a lot bigger. And so, you know, getting more, you know, retaining clients in B2B is more valuable, having them tell friends and family, et cetera. And the other piece of it is, you know, when you go into many good B2B companies, they have a sales culture, frankly, and the salespeople know their clients. Right. But when you dig into that, it is not always customer centric, it might be more sales centric. And so what I have seen be really powerful is Net Promoter really introduces a Different lens on the customer than a lot of sales and account teams typically see. And when you combine good net promoter practices and good client insight at that level with a great kind of sales culture, it becomes incredibly powerful. Powerful and reinforcing. And that's why I love to do this kind of work in B2B.

I agree. Also, you know, again, speaking from experience, I have gone into many companies, they're saying, yeah, we know this million dollar company really well, this client well. How many contacts you've got, how many responses? Well, we got one. It's like that. The other one, the bells start going off, the red lights flashing in my head.

The other one I love is, well, we meet our SLAs all the time. Well, have you talked to the clients about whether the SLA are appropriate and like, that's good service to them. And that's what you uncover with nps. You really find out not just are we meeting our contracts, but are we creating promoter clients that are going to refer us to others and give us more of their business?

No, but thanks for giving some context to that because I think B2B is not as mature in the NPS world as perhaps it could be. And yet. Absolutely right. There are bigger accounts. There's more incentive to do that whole close the loop work, multiple contacts, doing it several times a year. So I agree. And do you see the metrics different? I mean, you know, are you able to compare the B2B scores of a B2C company with B2B?

You know, we always are careful about comparing scores. We definitely compare scores within industries and things like that. But I think there's a different baseline for different types of companies. And when you ask. So I would say be careful about looking specifically and trying to compare a B2B with a B2C score. But all of the mechanics of how you get the feedback, what you do with the feedback, all of those things are very similar and you can institute a lot of the same processes.

Okay, let's try and start wrapping this up with a quick fire round, if that's okay.

Okay. I hope I'm ready.

Putting you on the spot.

All right, so, okay.

Where do companies most go wrong with nps?

They tie it too soon and too closely to frontline compensation.

Okay.

They focus too much on the metric.

Okay. Speaking about customer love, is there a downside of that?

No, but there are not Only, not every customer deserves to be loved. And what I mean by that is sometimes there are customers that do terrible things and egregious things to your own employees. And you have to be thoughtful about how you manage that.

What drives you most mad about customer experience programs.

People that think that doing the right things for customers is in conflict of driving great financial results.

Last one, best tip you can give someone who's in the middle of a.

Net promoter program, don't give up.

It's a marathon. It's not a sprint.

It's a marathon, not a sprint. And there will be. Doing something like this is not the immediate. You'll get small moments of immediate gratification. But the financial results take a little bit of time and you have to be patient.

Oh, that's great. I love it. Okay, one final thought from you, Maureen. One of the things I've seen you talk about is about digital experiences and about how you shouldn't forget putting the humanity in that. Can you give me a little bit of color on that about what you mean by that?

Absolutely. So I increasingly am talking about this crisis of disconnection. You know, in banking we have 80% of transactions are fully digital. You could probably go for many years with some companies and never interact with a human that represents that company. And I believe we will live in a lonely and bleak world if companies do not make those digital experiences funny and warm and engaging and personal. And so, and we see this, there are many companies that do this incredibly well. But my challenge to, to digital company or to people building digital experiences, make them human, make them feel. Make them, make people feel loved by them, if you can. And I believe that will just make the world a better place, frankly, because I don't want to live in a bleak, soulless digital world that's ruled entirely by algorithms.

That would be like Terminator, right?

Exactly, exactly.

Maureen, thank you so much for being my guest today. It's been really entertaining having you. I'd love to hear. I'd love to. Sorry. I loved hearing about the book and about some of the detail that went into that. If people want to follow your work, what's the best way that they can do that?

You can find me. Maureenbirds on LinkedIn is probably the best way to do that.

Maureen, thank you so much for joining me today and wish you all the best and looking forward to the next chapter in the net promoter journey that you're on. Thanks so much.

Thanks so much, Adam.

Sam.