These days it seems like every business is focusing on customer loyalty by measuring and managing their Net Promoter Score®. Individuals at all levels are receiving a bonus to improve their results every month, quarter or year. Business units are going down the polo shirt and coffee mug route in a desire 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 then you are agreeing with the concept of growth through customer retention, which is a very viable business strategy and a most desirable business outcome. This means that any satisfaction and/or loyalty measurement is not a business outcome but an enabler for improving business outcomes. Let me explain with an analogy: You are going to hang a picture on your wall. You reach for your trusty hammer. Is grabbing the tool your desired end result? Of course not, you still want to hang the picture. Same thing with satisfaction and loyalty measurements. These are tools that 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 have to know which tools are appropriate for any given project and then you have to know 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 important to use with transactional surveys, e.g., “How satisfied were you with the show 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, 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, seriously consider compensating teams, lines of business, or other groups in which everyone can influence the way 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 and not the outcomes.