Nowadays, every business seems to focus on customer loyalty by measuring and managing their Net Promoter Score®. Individuals at all levels receive a bonus to improve their results every month, quarter, or year. Business units are going down the polo shirt and coffee mug route to motivate their teams. Does this approach make any sense to you?
Well, not to me! – If I’ve heard it once, I’ve heard this a thousand times – “The purpose of a business is to get and keep customers.” Acquisition and retention at its simplest!
BTW – I tell people that the purpose of a business is to get and keep profitable customers.
If you agree with me, you agree with the concept of growth through customer retention, which is a viable business strategy and a desirable outcome. This means that any satisfaction and loyalty measurement is not a business outcome but an enabler for improving business outcomes. Let me explain with an analogy: You want to hang a picture on your wall. You reach for your trusty hammer. Is grabbing the tool your desired result? Of course not; you still want to hang the picture. Same thing with satisfaction and loyalty measurements. These tools indicate your customer’s emotional feelings about your business and the likelihood of continuing to do profitable business with your company (the desired outcome).
What does this mean? Like any good artisan, you must know which tools are appropriate for any project and understand how to use these tools. Here are some of the most important steps:
- Know what questions to ask as part of a transactional or relationship survey. Satisfaction questions are essential for transactional surveys, e.g., “How satisfied were you with the field engineer when you had a warranty repair on your new car?” Loyalty questions are best used with relationship surveys since these responders typically can influence future purchases.
- Link survey results to the appropriate operational or relationship metric to determine the performance threshold required to generate the satisfaction or loyalty values needed to help the business grow.
- When compensating your teams to improve outcomes, choose the correct target, e.g., increase in revenue or profit, reduction in customer churn, or increase in customer recommendations. And most importantly, make sure that the people being compensated can control the outcome and thus earn the compensation. To this end, consider paying teams, lines of business, or other groups where everyone can influence how the customer feels about continuing to do business with you. It is this team spirit that makes doing business with you exceptional.
Earning continuing business is always a challenge, so don’t make it more difficult than it needs to be by focusing on the tools, not the outcomes.
Related article – Combine Switching Costs and CX Metrics To Get High Impact Insights
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