Measuring engagement and enablement provides a better picture of employee effectiveness

Employee engagement has become increasingly mainstream in management thinking and employee research over the last decade. The MacLeod Review found over 50 definitions for engagement but in essence it proposes a ‘mutual gains’ employment relationship, creating a win-win for both employees and their employers.

There is a lot of research (a google search for “benefits of engaged employees” shows there are more than 20,000 academic articles in the last year) that shows that engaged employees are happier and more fulfilled, deliver improved business performance and there is a lot of evidence that shows a relationship between how engaged people are at work and overall business productivity and performance.

Whilst most employee research measures engagement it is also important to measure enablement

Today most employee surveys measure engagement and this is a good thing. Measuring engagement is useful and helps build an understanding of employees’ emotional investment in your organisation. However, engagement is not the sole contributor to driving staff effectiveness. Engagement is only part of the story and any organisation wanting to develop also needs to understand how well it is enabling staff. Therefore, to provide a more holistic picture of the overall effectiveness of an organisation, it is important to measure both engagement and enablement.

To be effective employees need to be enabled, in other words for people to be motivated at work they not only need to feel valued and engaged but also need to be supported in the right role and given the tools, equipment, technology, information and training to deliver that role.

When engagement and enablement are combined organisations are more effective

Research illustrates that when high levels of staff engagement are combined with high levels of staff enablement, organisations achieve significantly improved results (up to 50% better productivity, 89% higher customer satisfaction and 54% better employee retention)[1]. Companies that effectively combine staff engagement and enablement also report significantly improved revenue growth, staff retention and staff performance.

Employees are most effective when they are both engaged and enabled. If they are engaged but not enabled this can lead to frustration (frustrated employees will go elsewhere if their concerns are not addressed). If they are given the tools to succeed but are not engaged they can become detached and those who are neither engaged or enabled feel powerless and lose morale and motivation and consequently are not as happy or productive as they could be.

By measuring both engagement and enablement you can get a clearer picture of how effective different parts of your organisation are and importantly how you can develop.

Example effectiveness matrix

Above is a theoretical organisation’s results showing how effective different parts of the organisation are.

You can then combine these grouped scores and use the average to provide an overview of organisational effectiveness. Further analysis can provide specific tangible issues and improvements targeted for each area or overall as an organisation.

In the example above analysis might show that Area 1 is frustrated with training and development and feel that systems are inefficient, Area 3 do not feel valued by senior management, do not feel well communicated with and are using out of date equipment whilst Area 7 do not feel their line manager respects or listens to them and they do not feel they are recognised or involved in issues that affect their job.

I have done this analysis for clients and seen how much it has helped them

This is not just a theoretical concept. I have completed this analysis in practice dozens of times and provided actionable, clearly understood findings that have helped many clients improve their business. I particularly enjoy conducting employee research, helping each client learn more about their organisation and improve their employee experience. Please get in touch to have a chat about how CJM Research can help your organisation develop.

[1] Hay Group (2009), Engaging and Enabling Employees

Limits of The Net Promoter Score (NPS) System

What is the Net Promoter Score?

The Net Promoter or Net Promoter Score (NPS) is a management tool that can be used to gauge the loyalty of a company’s customers. NPS was first introduced by Fred Reichheld in his 2003 Harvard Business Review article "One Number You Need to Grow"[1].

The NPS is based on a single question:

"How likely are you to recommend [product or company name]
 to a friend or colleague?"

Customers are asked to rate their answers on an 11 point scale ranging from (0 = not at all likely to recommend and 10 = extremely likely to recommend).

These scores are then split into three categories “Detractors,” “Passives,” and “Promoters.”

•         Score of 0 – 6: Detractors
•        Score of 7 – 8: Passives
•        Score of 9-10: Promoters

The "Net" in Net Promoter Score comes from subtracting the percentage of detractors from the percentage of promoters. A negative score means you have more detractors than promoters and a positive score means there are more promoters (that is, more positive word of mouth than negative word of mouth). An NPS can be as low as −100 (everybody is a detractor) or as high as +100 (everybody is a promoter). An NPS that is positive (i.e., higher than zero) is felt to be good, and an NPS of +50 is considered excellent.

Criticisms of NPS

A key benefit of NPS is that it provides a single score that is easy to understand. However, in our view it has only limited practical application for companies who want to monitor, understand and improve their overall customer experience as it measures only one aspect of the overall experience - loyalty. Below you will find some of the most common criticisms of the NPS.

1.      NPS correlates with customer satisfaction but should not replace it

Customer loyalty and customer satisfaction are related concepts and they are correlated (people usually provide similar ratings for satisfaction and loyalty). At the same time customer experience questions and satisfaction questions are also correlated. However, where a measure is correlated with another measure, that does not mean that one is a replacement for the other, which NPS attempts to do.

It's unlikely to have customers that are loyal but unsatisfied, but you can have satisfied customers who aren't loyal.  However, a key concept behind NPS and loyalty measures in general is that customer satisfaction and experience were excluded to focus only on loyalty.

In Fred Reichheld’s, the creater of NPS, book “The Loyalty Effect” he makes the case that 60% to 80% of customers who defected or didn't repurchase a product were in fact satisfied or very satisfied. In the Auto Industry, for example, he cited figures which showed a 90% satisfaction rate and yet, on average, only 40% of customers repurchased the same brand of car.  This is an important issue as satisfaction does not mean loyalty (see our previous blog posting about satisfaction Do you really need satisfied customers.

So, while satisfaction relates to loyalty, they are not the same thing. Satisfaction measures the customer’s experience at any given time whilst NPS measures long term attachment (loyalty.) It is therefore best to measure both and not rely solely on one. Having multiple measures requires minimal additional effort to record and analyse and is significantly more valuable and actionable for you to monitor and manage – this is our approach.

2.      NPS is not actionable

NPS is also not actionable. What if your company has a good score What does that mean? How can you change the score? We simply don’t know the “So what?”. Similarly what if you have a bad NPS? What do you do? Is it linked to a group of underperforming or unprofitable gyms or a general company wide issue with the customer experience?

If a metric is just an “it is what it is” number, as NPS is, it has no context and no predictive power, can’t be used alone, and doesn’t give you clues about what to do. Its usefulness must therefore be questioned, especially if used in isolation.

At CJM Research we believe that you should measure not only overall satisfaction and loyalty but measure Key Performance Indicators of the customer experience too. This is then reported as a composite experience index score made up of all the KPI scores. This approach has been reported as best practice in other research[2] [3] [4].

Combining the experience scores provides a more robust and stable overall experience score that is directly linked to its component KPI scores. This not only provides a truer overview of the customer experience but also makes it easier to identify and act upon areas for improvement and measure the impact of any changes or improvements to service.

For example, if you have a low overall score for a part of your business you can directly link this to a particular KPI and act to improve this specific aspect of service. With NPS you would know that a part of your business has a lower score but not necessarily why. Our scoring is designed to help management identify and act on the information to improve service. This in turn makes our scoring easier to use for you as it is not only a single experience score but one that is linked to the actual customer experience and and this helps you improve overall satisfaction and loyalty for customers in a faster and more targeted way.

Furthermore, by tracking specific aspects of the customer experience it allows further detailed analysis that can tell you which parts of the experience are most important in driving satisfaction and loyalty. NPS on its own cannot do this.

3.      NPS only works in the context of your wider industry

The Net Promoter score has no real meaning without the context of competitor scores. Whilst a score of +50 is considered excellent this actually differs significantly between industries. For example, a utility company with an NPS of +1 may be excellent in the context of an industry where the average NPS could be -20.

We have an example of this where one of our other clients had an NPS of +69 which they thought was an excellent score…until they conducted some competitor customer research and found they were only average compared to their main competitors.

This is because you have to interpret NPS scores relative to other NPS scores in the same industry. However, most NPS centred research does not include measures of competitors leaving the results without context i.e. you do not know if your score is good, average or poor compared to your competitors.

You also cannot directly compare NPS across different industries or product categories because some products simply don’t lend themselves to word-of-mouth (e.g., toilet paper or car oil), while others can evoke passionate positive or negative views (e.g., retailers or restaurants).

4.      The same NPS score can come from very different customer experiences

NPS is also problematic because there are many possible ways to arrive at the same number, for detractors, passive, and promoters respectively, you could achieve an NPS of +30, for example, in dozens of ways.

A company with a +30 NPS could have 30% promoters, 70% passives, and 0% detractors, while another company with a +30 NPS could 60% promoters, 10% passives, and 30% detractors. It is likely that a company with 30% promoters and 0% percent detractors is very different than the one with a polarized customer base with 60% promoters Vs 30% detractors — even though their NPS is seemingly the same.

NPS also ignores the fact that the voices and reach of promoters or detractors can be drastically different depending on their motivation and the digital channels they have at their disposal. There may be a small amount of very vocal detractors who go online and write negative reviews. That would outweigh a large non-vocal group of promoters, even if the company had a positive and high NPS.

5.      11 point scales are not as good as others

Research by Stanford University and others[5]. found that the 11-point scale advocated by NPS has the lowest predictive validity of the scales tested. We typically recommend a 10-point scale for overall satisfaction and often mirror NPS scoring for recommendation (for consistency with NPS rather than by preference). This provides a more detailed scoring which is useful for tracking research.

For experience KPI’s we suggest either a five or 10-point scale depending on our clients legacy research and/or objectives. Five point scales are simpler to interpret and easier for respondents to complete, especially on smart phones (50%+ of online surveys are completed using phones) but smaller changes in average ratings are more difficult to identify.

6.      The scoring inflates the margin of error

By converting an 11 point scale into essentially a 2 point scale made up of detractors and promoters (NPS ignores passives in the scoring), information is lost. Furthermore, this new categorisation increases the margin of error around the net score (promoters minus detractors). Unfortunately, this means that if you want to show an improvement in Net Promoter Scores over time, it can take a much larger sample size to calculate, otherwise the difference won't be distinguishable from the acceptable range of error. 

7.      The relationship between NPS and growth remains unproven

One final, but important criticism of NPS calls into question the strength and reliability of the link between NPS and measures of business growth and profitability of those with higher NPS. Research that has attempted to replicate the link between business performance and NPS has not find statistically significant relationships between the two[6]. Similarly, the relationship between growth and NPS is reported to be less consistent or strong when using tracking data[7].

Even Fred Reicheld, the inventor of NPS admits that the findings of his initial research for NPS was flawed stating[8]:

"A number of perspicacious readers have noted that the statistical evidence provided in my book The Ultimate Question is imperfect. It does not provide proof of a causal connection between NPS and growth. Nor are some of the timeframes ideal.”

We are not suggesting the NPS is a useless score but that it is not the one score you should only measure. Instead it has its place together with satisfaction and more detailed experience questions in a balanced customer experience research programme.

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[1] https://hbr.org/2003/12/the-one-number-you-need-to-grow/ar/1

[2] For example: Hill, Nigel; Roche, Greg; Allen, Rachel (2007). Customer Satisfaction: The customer experience through the customer's eyes. London, England: Cogent Publishing. p. 7.

[3] Satisfaction as a Predictor of Future Performance: A Replication. Jenny van Doorn , Peter S.H. Leeflang, Marleen Tijs International Journal of Research in Marketing (Impact Factor: 1.71). 12/2013

[4] Szwarc (2005) “Researching Customer Satisfaction and Loyalty: How to Find Out What People Really Think” Kogan Page.

[5] Schneider, Daniel; Berent, Matt; Thomas, Randall; Krosnick, Jon (June 2008). "Measuring Customer Satisfaction and Loyalty: Improving the 'Net-Promoter' Score"

[6] Lawrie, Jock, Matta, Alsono, Roberts, Ken (2006). Value speaks louder than words. The management folly of adopting the Net Promoter Score as the ‘one measure’

[7] Keiningham, Timothy L., Cooil, Bruce, Aksoz, Lerzan, Andreassen, Tor Wallin, Weiner, Jay (2007). The value of different customer satisfaction and loyalty metrics in predicting customer retention, recommendation and share-of-wallet, in: Managing Service Quality, 17(4), 361-384.

[8] http://netpromoter.typepad.com/fred_reichheld/2006/07/questions_about.html

Mapping data adds insight

In the past few months CJM Research have completed two very interesting projects looking at where asylum seekers and refugees live in Glasgow (for Glasgow City Council) and the demand for English as a second or other language (ESOL) in Glasgow (for the main ESOL providers in Glasgow).

In both of these projects we have used mapping to add insight to data. Mapping the data can help it come to life and add insight that could be lost in tables or text.

For example the map below shows that provision of ESOL is not always where the target market are living. This means that students have to travel further and that provision could be moved to better meet the target market's needs.  This insight has helped providers change where provision is offered making it easier to access.

Where people not speaking English live with where classes are offered

CJM Research can help you map your provision, your coverage, your customers, your target market and your competitors. Get in touch if you would like to find out more about how mapping can help make your business better.

Mystery shopping can help you understand your business and your competitors

Mystery shopping is a great way to understand how your customers are being treated by your organisation.

Mystery Shopping' or mystery visits involves regular reviewing of your service by professional or carefully selected customers who are trained to observe, experience and evaluate the customer service process of an organisation. They do this by posing as a ‘real customer’ and undertaking a series of agreed tasks, which monitor the service delivery, customer journey and the effectiveness of staff training. Each shop is followed by an evaluation, usually in the form of a questionnaire. These questionnaires are collated and reported as a dashboard report or presentation of the overall findings conclusions and issues to be addressed. 

Mystery shopping is especially useful when you want to ensure that your service standards are being upheld and whether customers are receiving a consistent level of service across your organisation. A properly planned schedule of mystery shops can really help improve your customer service – I know because I help clients do this!

However, mystery visits are also a great way to understand your competitors. Whether it be how they deal with new customers, their prices, marketing messages etc

Myster

CJM Research can help you plan, deliver and report on mystery shops working with you to improve your customer service. You can get in touch for an informal discussion about how mystery shopping can help you develop your business.

What is your brand?

A brand is simply how people think and feel about your organisation. 

Every organisation has a brand. However, not every organisation understands this. It does not matter if you manage your brand or not your customers, stakeholders and non-customers have perceptions and make judgements about you. 

Market research can help you understand how your brand is understood and perceived - whether it be to determine what your brand values are or to measure changes to these over time. This will help you understand what your brand is and actions are having the biggest (and smallest) impact on how people view your organisation. 

CJM Research (http://cjmresearch.co.uk) can help you plan, design, implement analyse and report on your brand using a broad range of tailored qualitative and quantitative methods. 

Investing in ipads is making CJM Research better

Ipads are helping improve our service to clients

At CJM Research we always look for ways to innovate and improve the service we provide our clients. One way we have done this is to re-invent the way we conduct our face-to-face interviewing by investing in ipads for our interviewers.

Traditionally face-to-face interviewing involves six stages as shown above. This results in interviewers having to carry around piles of surveys as well as time and money spent distributing, collecting and data processing surveys.

Investing in iPads has been popular with interviewers as it is makes things easier for them. It is also better for our clients which saves time and money. Other advantages are listed below.

Get in touch at http://www.cjmresearch.co.uk to see how we can help make your business better

Who, what, where, when, who and why?

Whenever you are planning research you could take some advice from Rudyard Kipling and think of:

What is the issue, problem or decision you want to make?

Who is the research target group?
When do you need the research completed by?
How will you use the findings?
Where would you like the research carried out?
And critically why are you doing the research?

Answering these questions together with an indicative budget will help deliver the best research approach to meet your needs.