How NPS has helped NIB keep customers

Australian health insurance provider details how its voice-of-customer programs have instigated a major transformation of its operational model and culture

Customer experience for NIB was a verb, not a noun, until the organisation launched a transformation program and voice-of-customer strategy using Net Promoter Score (NPS).

Speaking at the Customer 360 Symposium in Sydney’s Hunter Valley, NIB head of customer experience, Adam Novak, walked attendees through the organisation’s three-stage program to adopt NPS both as a measurement tool and business strategy, as well as the significant operational and cultural changes resulting from its efforts.

“NPS is doing two things – it’s creating an environment for zero tolerance of customer failure, and for delivering great customer service,” he said.

Prior to adopting NPS, NIB’s distribution team was operating independently of marketing, resulting in different incentives to customers, Novak said. “Retention was everyone’s problem but nobody’s problem,” he continued. “No one owned it.”

As an example, Novak pointed to an initiative to drive down lapsed customer rates to 5 per cent. Awareness of the program was high, and over a four-week period, staff became involved, contributing ideas.

“But we didn’t do anything with it because no one owned it,” Novak said. “Customer experience was a verb, not a noun, and we didn’t have a program in place.

“We did solve customer problems and were good at it, but we also kept solving the same problems over and over again.”

Over the past five years, NIB has embraced NPS to change the way the business operates, raising its score by 20 points in recent years.

Novak described the journey in three stages. The first was “turning on the fire hydrant” and collecting better data on what customers thought of NIB’s products and services.

An early pilot was with one of NIB’s dental centres, which found customers were discomforted by sounds coming through thin walls. As a result of this insight, NIB moved to new and more comfortable facilities, Novak said.

NIB also opted to include NPS questions in its quarterly customer satisfaction survey, which in turn led to Whitecoat, Australia’s first website allowing members to search and compare extras providers such as chiropractors, physios and optometrists across geographic locations. The site is based on service charge and claims data, Novak explained.

NIB also surveyed call centres and retail networks, with data fed through to all senior managers as a weekly report. “From the beginning, NPS was treated as a company resource,” Novak said.

Stage two was about managing the workflow and information to respond to the NPS data, Novak said. One initiative was establishing service recovery mechanisms, such as calling back customers who had given NIB an NPS score of 0-2 to find out how to be more relevant, Novak said.

NIB’s intervention team also looked at how it could pre-empt service issues such as expired credit cards by notifying customers beforehand, while its customer ‘winback’ team ensures the company is doing everything it can to avoid customer cancelling their contract.

To help prioritise information, NIB created a monthly ‘quick wins forum’, featuring six representatives from front-line services as well as six business owners such as IT, digital and product.

“They bring in quick wins to deliver quick wins, enabling us to take action faster and drive momentum,” Novak said.

To support them, NIB has introduced a quality improvement team, which looks at the data and customer insights to identify areas the organisation can improve. This team, along with front-line consultants, have adopted the LEAN process improvement methodology, based on two key principles:

Providing tools for consultants to have great customer conversations; and converting team leaders from administrators into “performance coaches”, Novak said.

NIB also added a third question to its NPS survey on customer effort to better understand how its teams were taking action with customers, gleaning further insights.

Stage three for NIB revolved around actioning NPS insights. Today, the organisation has formalised plans in place, along with a voice-of-customer dashboard and a customer plan to improve visibility of customers across the organisation.

A fresh consultant’s scoring system, combining NPS and average call handling times, has been introduced to the front-line, and NPS has been embedded into all employee bonuses and KPIs, from the CEO to the front line.

“We have a dedicated team looking after customer plan with key stakeholders across the business,” Novak said. “Now also have retention team dedicated to building better relationships with customers.”

Novak added NIB is delivering tactical customer-led projects using four key objectives: Reducing failure demand; improving routine transactions; identifying moments of truth; and wow factors.

Taking it a step further, NIB plans to launch a loyalty program pilot next month based on offers and incentives for services and extras that have surfaced as a result of its regular customer surveys.

While NPS has made a significant and positive contribution to NIB, Novak said the cultural change required to transition to a customer-first business can’t be underestimated. He warned attendees not to rush in without having the right support, infrastructure and plans in place first.

Novak also advised putting customer comments in front of everyone across the business, as well as ensuring leaders have the right people skills to lead cultural transformation from a staff perspective.

“And train key leaders in LEAN [methodology], particularly root cause problem solving and prioritisation,” Novak added.

Another key learning was to “go to the ‘Gemba’, or place of work where these issues are occurring”, Novak said. He also recommended teams understand the customer’s processes end-to-end to avoid inefficiencies occurring.

So did NPS really impact customer retention? In a graph charting customer churn by NPS over a 24-month period, Novak pointed out NPS promoters have a much higher survival rate than detractors.

“What’s also interesting is that our promoters and detractors [in the middle of our graph] cross over. That’s where we had our staff calling detractors giving us those scores of zero to two – the work we did with those who scored us a two actually worked,” he said.

“As a result, we now call all of our detractors. It was a really important learning for us, So NPS does matter.”

Nadia Cameron attended Customer 360 Symposium as a guest of Ashton Media.

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