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Wednesday, December 21, 2016

8 Ways to Make Your Customer Satisfaction Measurement More Effective
Eight constructive suggestions for improving the effectiveness of customer satisfaction initiatives:
1. Create an Action Plan: No customer ought be contacted, nor any data collected without a process in place to act on the insights to be gained.  Going under the title, Action Planning, such processes: 1.) pre-assign measured items to 'manager-owners' (who have operational control); 2.) help stipulate realistic goals for improvement; 3.) measure progress towards the goal on a periodic basis.

2. Conduct a Census: When a satisfaction questionnaire is distributed to only a sample of customers, it fails to communicate the business’s desire to hear from all of its customers.  While packaged goods manufacturers may be hard-pressed to conduct a census, for producers of: durables; specialty items; and services a total census is not only achievable, it’s highly desirable.

. Measure Continually: A satisfaction process that is conducted on an ‘event basis’ (only sporadically) sends multiple messages – all detrimental.  Employees may become “trained” to perform especially well during measurement periods, only to relax in off-times.   Employees may also question how truly committed management is to customer satisfaction if it is only measured occasionally rather than continuously.

4. Drive the Questionnaire with Your Database: Far too many satisfaction programs are conducted isolated from the customer database.  This results in the demeaning, typical first question: “Which of our products do you own?”  If any part of a satisfaction process is targeted to strengthen relationships with customers, showing that the company has absolutely no idea of the products purchased by individual customers completely undoes the relationship-building objective.

5. Disaggregate Your Results: Reporting average scores not only hides low scores, it also turns attention away from the percentage of truly delighted customers.  And, need we remind ourselves, there is no average…it’s an imaginary median. It’s far better to report scores of extreme outcomes.  That way the goals of minimizing dissatisfaction and maximizing satisfaction are clearly identified and tracked.

6. Communicate Your Findings: The communication of satisfaction results is a broad field with many options.  The ideal is to communicate results not only to employees but to customers as well.  By involving customers in the reporting process a business ‘validates’ its process.  It demonstrates that the collected information is actually being analyzed and hopefully acted upon.

7. Celebrate Results: Results shouldn’t be rolled out in a punitive way.  Even poor results can be announced in a way that coaches improvement.  After all, the tonality of a satisfaction report will influence exactly how employees begin to feel about the total process.

8. Solve Problems Raised by Individual Customers: Don’t treat the process as simply a data-gathering exercise.  Respond to those customers who identify real problems, providing them a solution.
Indeed, if properly practiced, satisfaction surveys can better align a business to the needs 
8:24 am est          Comments

Tuesday, December 6, 2016

Are You Reporting a Misleading NPS?

We're not suggesting you stop using NPS.  On the contrary, we believe the Net Promoter Score (NPS) key question ("How likely is it that you would recommend...") is an important one to ask of all customers.  After all, we're committed to the value of word of mouth in generating new customers.  And we think NPS has done a phenomenal job focusing the C-suite's attention on the importance of improving the customer experience.

There's A Need for a More Descriptive Picture

Despite its compelling message, there is something that can be very deceiving about NPS scores as they are currently reported within most companies.  Take for an example an NPS score of +8.  The score has been calculated by subtracting the percentage of Detractors (those customers awarding the brand a 0-6 score) from the percentage of Promoters (those awarding the brand a 9-10), while setting aside the Passives (those awarding the brand a 7-8).  You see the ambiguity?  A +8 NPS could mean that a small percentage of your customers would be willing to recommend your brand, say 12%, while 4% would not (with 84% of your customers scored as Passives with no strong feelings in either direction).  In that case we would describe this NPS distribution as an example of a "Passive-Majority".

But that same +8 NPS could have resulted from 50% of your customers scored as Promoters who feel very positive about their experience and would likely recommend your brand, while at the same time 42% of your customers are potential Detractors who would be unlikely to recommend and could well be about to churn away from your brand.  We'd characterize that distribution as "Opposing-Extremes".

Helping to Establish the Right Priorities

The problem is that with the way NPS is currently reported, such totally different underlying scenarios can be totally masked from senior management.  By not revealing the distribution of scores, management doesn't have all of the information it needs to formulate the correct remediation strategy.  The first distribution described above (with just 12% Promoters) desperately calls for a strategy that ignites the passion of customers for the brand, advancing them from Passives to Promoters.  In contrast, the second scenario above cries for some reconciliation of the 42% Detractors who are ready to do considerable damage to the brand.

So, What Are Our Recommendations?

Clearly knowledge of the distribution of NPS ratings underlying the NPS score would help management formulate more realistic and effective strategies.  So...

  1. We recommend that all brands provide a distribution of the NPS data that underlies the NPS score. That is, along with the reporting of the overall NPS, also report the percentage of Promoters and the percentage of Detractors that produced that NPS.  As an example, NPS of +8 (with 12% Promoters and 4% Detractors).
  2. For those with a Detractor percentage of over 25%, consider whether you could afford to lose 25% of existing customers and whether you can afford to have such a significant portion of your existing customers out 'poisoning the well' of future customers with their "recommendations" against your brand. If not, conduct an analysis to identify the greatest points of dissatisfaction driving those Detractor attitudes and make fixing those your top priority (before trying to generate any more Promoters).
  3. For those with a high percentage of Passives (7 and 8 scores being awarded by customers), don't ignore them just because they aren't included in the NPS calculation. Recognize that emotional attachment to a brand is a big part of customer loyalty.  Assuming that the Detractor percentage is not seriously impacting the total NPS, conduct a key driver analysis to identify the factors having the greatest impact on satisfying customers and formulate tactics to convert Passives into Promoters.

It's all about focus and prioritization!  But for both you really need more than just the NPS score.

2:34 pm est          Comments

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