See feedback as a gift.
—Apple tenth anniversary poster
Steve Jobs didn’t rely on focus groups, because he believed that people did not know what they wanted until you showed them. In some cases this was very true. Would you have agreed to pay ninety-nine cents a song in 2003 when you could otherwise download songs on the Internet for free? But Jobs realized what most people did not—music fans would pay for a better, seamless, and legal customer experience. In January 2010, would you have told Jobs that you wanted to carry around yet another device in addition to a mobile phone and a laptop computer? Jobs realized that people really wanted an ultra-portable device that would make it easier to do e-mail, browse the Internet, and enjoy photographs, video, and books. Nobody asked for the iPad, but they couldn’t buy enough of them. When it came to big innovations, Jobs did indeed rely on his intuition and imagination. But it is incorrect to assume that Apple never listens to its customer. The exact opposite is true. Apple listens to its customers all the time and more important, actively solicits feedback from both its internal customers (employees) and external customers.
Feedback requires fearlessness and trust. That’s why fearlessness and trust come before feedback as far as the principles discussed in this book. A fearful employee will be unwilling to be open and honest in offering feedback about the company, its policies, or a manager. A fearful manager who hasn’t instilled trust will be defensive and unwilling to listen to constructive input.
Fearless employees will disagree with you, but they will offer valuable feedback when the opportunity presents itself. I read a story about Emma Sky, a British pacifist who was dedicated to getting the United States out of Iraq. In 2007 she became a key aide to General Ray Ordierno, the former commanding general of the U.S. forces in Iraq. The tiny British woman and the general (Ordierno is 6 feet, 5 inches) made an odd-looking pair, but she played an outsized role—she actively disagreed with Ordierno. She was assigned the role purposely to disagree with him! Ordierno is “fearless.”
“Leaders who solicit opinions from people who disagree with them are smart enough to realize that they do not have all the answers,”1 says leadership consultant John Baldoni. “Such leaders also must make it safe for others to disagree: otherwise the exercise is moot.” Baldoni recommends that companies hire employees who exhibit “character.” In Baldoni’s definition, character is a willingness to do what’s right for the team and the courage to stand up for ideas. Apple certainly looks for character. Steve Jobs admonished his employees not to do what they think “Steve would do” but to do what’s right for the team. Apple managers also look for people who can stand up for their ideas, who could go toe-to-toe with Steve Jobs because they must be brave enough to voice their opinions. The Apple experience doesn’t work without feedback. Steve Jobs believed so much in feedback—internal and external—he would periodically pick up the phone at Apple customer care. He wanted to hear directly from customers about their frustrations. Jobs didn’t believe the customer was always right. In fact, he could shoot down a customer with a pointed word or phrase. But more often than not, Jobs sought feedback, listened, and like any good leader, acted on that feedback. He saw feedback as a gift.
Feedback is a critical component behind Apple’s customer service excellence. Feedback is one of the most common words that I hear from Apple Store employees. Apple managers cultivate an open-door policy where employees feel comfortable and empowered to make comments and suggestions. But it works both ways. Employees and managers must be fearless in their pursuit of feedback. For example, after making a sale, a typical (nonfearless) employee would unlikely ask for feedback, and if he did, he might ask a meek question such as, “How did I do?” This typically leads to an equally empty, unsatisfying, and uninstructive answer: “Fine.” A fearless employee will dig deeper: “Where did I miss an opportunity? On a scale of 1 to 10, where do I rank in terms of customer engagement? Did I do everything possible to create a customer for life?”
Feedback is best given when the interaction is still fresh in everyone’s mind. Not always, but frequently, it is given soon after a sales transaction in an Apple Store. Managers will ask probing questions to help employees build better quality relationships with customers. They will ask questions such as, “What was the experience like? What did you miss? How could the transaction have been different?” Managers are not expected to hold a customer service training class after every transaction, but simply asking these questions will help an employee be present the next time she’s with a customer.
The immediate feedback loop can help any brand create a richer, more satisfying experience between staff and customers. The Apple philosophy applies to any business, in any industry. For example, most employees working behind the counter of an ice cream store want nothing more than to scoop an ice cream into a cone and get the customer on his way before it melts. But a fearless feedback loop will greatly improve the quality of the employee’s next interaction. The Apple approach would be for the manager to ask probing questions of the employee: “What other experiences did you introduce to the customer? Did you ask, ‘What do you normally order when you come here?’ Did you recommend anything based on the customer’s requests or desires?” This feedback could lead to a richer experience because the frontline employee will be more involved in building relationships. The next conversation might go like this:
Employee: Welcome to Yummy Ice Cream. We’re glad you’re here.
Customer: It’s hot out there! I’m not surprised that you have a line out the door.
Employee: It sure is. I hear it’s going to be close to 100 degrees today. We certainly have some great flavors to help cool you down. Tell me, what’s your favorite ice cream?
Customer: I know it’s simple, but I really like vanilla.
Employee: Awesome. I love vanilla, too. Have you tried Cherries Jubilee? It’s a vanilla-based ice cream with a twist—we add chocolate and cherries. Not only that, it’s served in our waffle cones, which are unique because we make them all by hand every morning, right here in the store.
Customer: Sounds good. I’m not a huge fan of cherries, but I like the idea of chocolate and the waffle cone. Let’s do that. Thanks.
At this point it won’t matter to the customer that the ice cream treat he did buy cost three dollars more than the vanilla cone. He did learn something new, his eyes were opened to a new flavor combination, and he enjoyed the relationship that began to form, just in a few short seconds.
We will discuss “probing” questions in Part II, but for now just pay attention to the fact that the employee in the ice cream example connected a recommendation to the customer’s likes. The employee didn’t say, “Oh, you like vanilla. Have you tried mocha?” The same applies to the auto industry. If a car buyer walks in and starts talking about her three children and family trips, an astute car salesman won’t point her to a two-seater turbo. When I walked into an Apple Store to shop for a new iPod, the specialist didn’t try to sell me a Macbook Air. But he did introduce me to the iPod Touch because after asking probing questions, he learned that I like some music apps like Pandora. The iPod Touch, he said, would give me all the benefits and apps of an iPhone, without the phone. The Apple specialist had learned—through training and constant feedback—how to create an enriching experience for his customer.
In another situation, I entered an Apple Store specifically to purchase a new notebook computer. The Specialist who worked with me, “Carla,” was one of the most enthusiastic people I had ever encountered at any retail store. Carla was a middle-aged woman who was clearly a free spirit. She had a purple streak in her hair and wore a beret. She made the buying experience a real pleasure. Of course, the journalist in me came out, and I asked her as many questions as she asked me.
“How long have you been working here?” I asked.
“Only six months.”
“Did you work in another retail store? A technology company?” I asked. “You seem to know a lot about operating systems.”
“It’s funny,” she said. “I had never worked in retail, and I didn’t know much about computers. But I loved Apple products. I had taken some One to One classes, and my goal is to be a Creative (Creatives are the instructors who teach personalized classes in the store). I remember there were about one hundred people in my first interview. A few were arrogant and thought they’d nail the job because they knew so much about Apple products. But Apple is different. They weren’t looking for technical knowledge. They hire for passion and personality. I’m really proud to work for a company that cares about its customers.”
“I can see that,” I responded. “You could have fooled me. I would have thought that you’ve been selling Apple products your whole life.”
“I’ve been here six months, and I still get feedback every day. We have discussions at the end of every shift. I’ll tell them all about this lovely interaction. Thanks for coming in and making my day!”
Carla made me feel good. I had a smile on my face, and I couldn’t believe how outgoing and friendly she was. Carla represents the next generation of customer service. But if it wasn’t for the consistent feedback Carla—a Specialist—received from her manager, her natural friendliness would not have been channeled into creating a strategic advantage in the industry.
One reason why Apple scores higher than most other retailers on every metric (visitors, revenue per square foot, employee retention, etc.) is feedback. Interestingly, when you ask the casual Apple Store customers why they were satisfied with their experience, they will rarely, if ever, mention the word feedback. Conduct a Twitter search for Apple and customer service, and you will find dozens of enthusiastic customers who are sharing their positive experiences with friends on their larger social networks. Add the word feedback to the search term and no results will show up. Yet feedback is Apple’s under-the-hood philosophy that guides nearly everything Apple does, and it’s a key component in cultivating an engaging team.
Apple uses the Net Promoter Score (NPS) to “monitor the employee and customer experience and to identify and address where we can better serve.”2 The NPS score measures engagement. Studies have consistently shown that companies with higher levels of employee and customer engagement outperform their peers on the stock market and other metrics of financial success. But recall from the earlier Gallup research that a full 70 percent of employees in the United States are either “not engaged” or “fully disengaged.”3
In 2003, Fred Reichheld, a partner at Bain & Company, created a new way to measure customer relationships. He called it the Net Promoter Score. But as thousands of companies adopted the score, they expanded it, customized it, or improved the methodology. The result is an NPS that thousands of companies, including Apple, use to measure customer loyalty and to transform their organizations.
Companies like Apple use NPS to ask two important questions, one aimed at internal “customers”—employees—and the other at external customers. The question asked of employees is “On a 0-to-10 scale, how likely is it that you would recommend us as a place to work?”4 The question asked of customers—the ultimate question to gauge customer engagement—“On a 0-to-10 scale, how likely is it that you would recommend us (or this product/service/brand) to a friend or colleague?” Respondents to these questions fall into three categories:
1. Promoters. These are loyal enthusiasts who keep buying from a company and urge their friends to do the same. In response to the question, “How likely are you to recommend products and services to a friend,” promoters are those who respond with a 9 or 10. They are saying that their experience with your brand has enriched their lives.
2. Passives. These are satisfied customers who are easily wooed by the competition. If a competitor can shave a few bucks off the price of a product, the passives are all over it.
3. Detractors. These folks bring down the total score and do a lot of damage. They are unhappy customers who feel badly mistreated. They cut back on their purchases, switch to the competition if they can, and share their negative experience on Twitter, Facebook, foursquare, and other social media platforms. “Customers who feel ignored or mistreated find ways to get even. They drive up service costs by reporting numerous problems. They demoralize frontline employees with their complaints and demands. They gripe to friends, relatives, colleagues—anyone who will listen. Detractors tarnish a firm’s reputation and diminish its ability to recruit the best employees and customers.”5
NPS is measured by taking the percent of customers who are promoters (P) and subtracting the percentage who are detractors (D).
P – D = NPS
The average company sputters along with an NPS rating of 5 to 10 percent (some even have negative ratings, which means there are more detractors than promoters). Many brands admired for their service, like Southwest Airlines, fall in the 60 percent range. But the real standouts—net promoters—such as Apple, Amazon, Costco, Trader Joe’s, or USAA in the financial services industry, push the NPS score to more than 80 percent. That’s the equivalent word-of-mouth of nine people talking up the service to their friends while only one person is feeling let down. I’ve talked to individual Apple managers who say they only want to see nine or ten. Anything less is considered a failure and requires corrective action immediately.
Apple has been using the NPS feedback loop for years to improve the way they do business—to create a team of employees who love working for the company and to cultivate a group of loyal customers who sing their praises. Everyone is focused on one goal: treat customers so well those customers become loyal promoters of the brand. “NPS was a natural fit for Apple,”6 said former Apple head of retail Ron Johnson. “It has become part of the DNA of our retail stores.” If you start with the ultimate question, it will influence your hiring decision. “You will begin with people who care about a customer’s heart, not just their pocketbook,” according to Johnson.
When Ron Johnson and Steve Jobs began bouncing around the idea of a retail store, there were no computer retailer stores to compare. They had all failed miserably. Remember that when Apple opened its first store, the iPod was still in development and the Macbook, iPhone, and iPad were years away. So to get people in the door, Apple had to rely on giving people an experience that would enrich their lives. The stores wouldn’t just sell computers. They would inform, illuminate, and inspire. They would create such a delightful interchange between the employees and customers that the customers would hardly be able to contain their excitement and would spread the word. Apple customers would be its best sales force. Johnson embraced NPS to measure how successful Apple was creating customer advocates.
According to Reichheld, Apple Store employees know where they rank among their peers in terms of NPS and where their store ranks relative to other stores in the region. Promoters are celebrated.
Apple Store managers recognize employees who create promoters of their customers; some stores even put photos of these employees next to the promoter’s comment text, and then scroll them across a large-screen TV monitor in the employee break room. Meanwhile, Apple’s central NPS team analyzes customer feedback from all the stores to understand the systemic reasons for promoters’ enthusiasm. Though you might expect that the primary source of enthusiasm was Apple’s amazing products or its cool store design, by far the most common reason promoters give for their happiness is the way store employees treated them.7
The higher the NPS, the closer Apple employees are to reaching their goal of enriching lives.
Apple began measuring NPS in 2007 when there were 163 stores. The NPS score was 58. Today, with well over 350 stores, Apple’s NPS score tops 70 percent and some of the best stores rank above 90 percent, a remarkable achievement. “Where a typical electronics store might record $1,200 per square foot in sales, mature Apple stores exceed an estimated $6,000 per square foot. This is by far the highest productivity in retailing of any kind.”8
Johnson realized that only passionate employees who were promoters themselves could ever transform customers into promoters, and that’s why feedback is so critical between employees and managers. Both must feel comfortable about bringing up issues that might impact the NPS ranking. Apple is so serious about internal promoters, it developed a Net Promoter for People (NPP) system. Under NPP, store employees are surveyed every four months to determine whether or not they would recommend the store as a great place to work. Yes, profits are important. But profits won’t appear unless you first enrich lives, and that includes the lives of your employees.
A few minutes after I left an Apple Store having purchased a Macbook Air, I received an e-mail with the subject line: “Share your thoughts on the Apple Store.” It explained that Apple would like my feedback to make my next visit even better. The e-mail said it would take five minutes to fill out the survey. The survey is facilitated by a third-party, independent market research firm, but the questions are all based on NPS.
The first two pages of the Apple feedback form asked simple questions to determine what type of product I had purchased and whether I bought it online or in the store. Page three is where it became interesting with the following questions:
“Overall, how satisfied were you with your most recent experience at the Apple Store?” The score reflected a 0 to 10 scale: 0 = Not at all satisfied, 5 = Neutral, and 10 = Extremely satisfied.
The next question was the ultimate question: “How likely are you to recommend the Apple Store to a friend or family member?” Again, 0 means “Not at all likely” and 10 means “Extremely likely.”
Page four asked questions such as, “How did this particular visit influence your likelihood to recommend the Apple Store?” It also contained an open field where I could fill in my response to the following question: “What would you tell someone when recommending the experience at the Apple Store?”
The following question was intended to measure the elements Apple believes are important to the overall customer experience, “When thinking about your experience at the Apple Store, how would you rate your satisfaction with the following aspects?”
The final question is also meant to evaluate the efficacy of the feedback loop, “Which of the following benefits, if any, have you heard of at the Apple Store (select all that apply)?”
Apple Store employees realize that each of these store elements improves the quality of the customer experience. They are trained to make sure the customer is aware of the classes, workshops, Apple Care support, and so on. It’s drilled into them daily. If they read it or heard it once during their initial training, they would likely forget to bring them up. But since they are given feedback every day, they rarely miss an opportunity to educate the customer.
In October 2011, Sheila Seberg of Newport Beach was forced to cancel a flight on US Airways because her husband had suffered a major heart attack. The airline refused to refund the value of the $560 ticket but would extend the time in which it could be redeemed, so long as Seberg paid a $150 fee to change it!
“I was shocked,”10 Seberg told a newspaper. “It’s not like I frivolously decided not to take the trip. My husband almost died. But they showed no compassion.” The Sebergs were loyal customers. They had racked up frequent flyer miles because Seberg’s husband, Richard, was a dentist and flew US Airways every week to Las Vegas, where he had a second practice. He flew every week for fifteen years.
I read the Seberg story in the Los Angeles Times. Seberg had become a detractor, and in these days of rapidly traveling social media, any negative comment gets a megaphone. Seberg posted a comment to a social network that, in turn, caught the eye of a reporter in Los Angeles. On Twitter the story got retweeted hundreds of times with added comments such as “Ahhh, just another example of US Airways glorious customer service (note sarcasm),” or “US Airways is the WORST. Read about MY experience with them. …” People were not only reading and sharing Seberg’s story, they were adding their own! On a whim, I checked the NPS ranking for US Airways. I thought I had discovered a typo when I read “negative 12 percent.” That’s right. US Airways had net more detractors than promoters. A negative NPS score can’t be good for anyone—employees, customers, or shareholders.
During the same week Seberg’s US Airways story was circulating on the Internet, another story was going viral. This story involved a ten-year-old girl who had saved her allowance money for nine months to buy a new product. She literally brought a mason jar full of coins and cash to the store, but it had just closed. When the little girl and her parents saw that it was closed, they were sad and decided to walk around the mall. Much to their surprise, a store manager caught up to them, apologized, and led the girl back into the store. The employees all applauded and made the little girl feel like a princess. She poured out the contents of her jar and bought her product. As she was leaving, an employee approached her and said, “I have to tell you. This made my day.” This store had an NPS of more than 70 percent. It was an Apple Store, and the product was an iPod Touch. This story, too, hit the blogosphere and was retweeted hundreds of times.
Both stories reinforce the power of feedback, or the lack of it. It’s likely that the US Airways employee didn’t even know about NPS nor was given feedback by a manager on how to improve the customer experience. The employee was also not empowered to do what is right. Remember the admonition that Steve Jobs left to his employees shortly before his death: “Don’t ask, what would Steve do? Instead ask, is it the right thing?”
By contrast, the Apple employee who chased after the girl’s family and invited them back into the store knew three things: he would not be chastised for breaking the rules, he was enriching a little girl’s life, and the parents would probably offer glowing feedback, which they did through their social networks.
“Every leader of a business leaves a legacy when he or she departs, and it is that legacy by which a leader is judged. If you want to leave a legacy that extends beyond profits, a legacy of caring about customers and employees and about the kind of company you have built, a legacy of enriching the lives you touched, NPS is an indispensable tool,”11 says Reichheld. Anyone can sell products. Most do it badly because they don’t care about leaving a legacy. They don’t care about enriching lives. Steve Jobs cared about legacy. Jobs told Isaacson, “I hate it when people call themselves entrepreneurs when what they’re really trying to do is launch a start-up and then sell or go public so they can cash in and move on. They’re unwilling to do the work it takes to build a real company, which is the hardest work in business. That’s how you really make a contribution and add to the legacy of those who went before. You build a company that will stand for something a generation or two from now.”12 If you want to build a brand that awes people and a company that lasts, you must hire the right people, create the right culture, and constantly provide feedback for that culture to survive.
1. Create daily opportunities for feedback between you and your team. Check your egos at the door. Everyone must feel comfortable and confident giving and taking feedback. Ask them to be “authentic,” and they might surprise you with their input.
2. Design opportunities to solicit feedback from your customers after the transaction takes place. Apple doesn’t ask for feedback on the sales floor. This can be as simple as an e-mail survey or a brief phone call. Above all, the most important question to ask is, “On a scale of 0 to 10, how likely is it that you will recommend our product/service/company?”
3. Learn more about the importance of feedback and the NPS customer satisfaction score. Read The Ultimate Question by Fred Reichheld.