Customer
Satisfaction Simplified
by Walt Samuelson,
CEO of CustomerLink.com
There’s a very interesting article in Business
Week, January 30, 2006 issue, entitled: “Would
You Recommend Us?” The article was spawned from interviews
with General Electric regarding their customer satisfaction
measurement program. GE’s adoption of the concept
reportedly came after a Harvard Business Review article
on the subject.
The idea goes against most customer satisfaction measurement
programs in that it reduces the customer satisfaction questions
to just one simple question. Historically we were taught
to be sure to ask at least three primary questions: 1) Are
you satisfied with your service today? 2) Will you return
to us for your next service? 3) Will you recommend us to
your family and friends.”
The new concept, single question is: “On a scale
of 1 to 10, how likely is it that you would recommend us
to your friends or colleagues?” Pretty simple and
very “clean” if you ask me.
The HBR article recommends that customers giving “likelihood
to recommend” scores of 9 or 10 be considered “promoters”.
Customers who provide a rating of 7 or 8 are considered
“passively satisfied” and those providing a
rating of 1 to 6 are considered “detractors”.
The suggested way to score this customer satisfaction data
is to disregard the “passively satisfied” (7
and 8 scores) and use only the 9 - 10 and 1 - 6 data. You
subtract the percentage of customers rating you 1 through
6 from the percentage of customers rating you 9 and 10 to
arrive at your “new promoter score”.
The surprising statistic from HBR while researching this
concept was that the “net promoter score” (percentage
difference) correlated closely with a business’
revenue growth.
GE adopted this approach in all its businesses in 2006
and expects it to have even more impact on their business
than their famous Sigma Six program.
The Business Week article goes on to hypothesize that determining
whether a customer would put their credibility on
the line by recommending your business appears to be a stronger
indication of loyalty and future behavior.
Reading on I found that Intuit
(maker of QuickBooks
and TurboTax)
uses the program. Since my oldest daughter, Kristi, works
for Intuit I asked her if she knew anything about “net
promoters”. To my surprise she said “yes, and
my department’s score is…” It’s
very impressive that a $2 billion company has adopted this
concept so quickly and thoroughly. Add to that GE’s
adoption and you can rest assured that others will be coming
into the fold quickly.
Frederick Reichheld who wrote “The Loyalty Effect”,
who I’ve quoted in the past because of its direct
discussion of independent automotive service centers, is
coming out with a book on the subject that will be titled:
“The Ultimate Question”.
Asking the question is easy. How you use the results determines
whether the question provides enough information for one
to improve their business. That means you have to find out
why those rating you a 1 through 6 did so and from their
feedback determine what you can change to earn their 9 or
10 rating.
How does this apply to our much smaller businesses? Perfectly,
I’d say – and you’ll see CustomerLink
begin to survey our customers periodically with the single
question beginning in March.
Let’s assume in one month you can get enough surveys
back to establish your “net promoter score”.
And, you contact those customers rating you a 1, 2 or 3
to see what you’d need to change to earn a 9 or 10.
In two to three months you’d be well on your way to
knowing more about your customers’ attitudes toward
your business, have hard data to work with to improve, and
should be able to track your “net promoter score”
to see improvement.
Assuming the Harvard Business Review is correct, your revenue
will increase as your “net promoter score” increases.
Which makes perfect sense, doesn’t it? Customers who
are willing to recommend you to others are more likely to
use your service center for all their maintenance and repair
work. They are less likely to expect discounts and more
likely to keep their vehicle(s) properly maintained. It
just seems to follow that more “net promoters”
will mean more revenue!
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