Received an excellent response on my post yesterday (Measuring The Customer Experience) on Twitter from a @pricingright that said; “With all due respect, it is far too simplistic to use customer advocacy as a measure of customer experience & it is wrong to draw causations. Correlations they speak about are from cross-sectional studies. Interesting but rife with selection, survivorship and other bias.”
I posted the Forrester video because I felt the point being made about keeping measurements simple were important. What needs to be simplistic in measurement is the collection of data. Without simplicity or automation in handling these tasks seldom will they be sustained or not manipulated to get the numbers in!
Do I believe that Customer Advocacy is to simplistic as @pricingright points out? You Betcha! I am from the school of Six Sigma, we don’t make anything that simple do we? ;) In the soon to be released 5 Cs of Driving Market Share program, I had asked Eric Reidenbach, the founder of Six Sigma Marketing Institute what the Net Promoter Score meant to him. An excerpt from an article he sent me.
What drives the NPS calculation? What is the best predictor of whether a customer is willing to recommend it to a friend? Let’s start with what does not predict NPS.
Most organizations would point out that they do some kind of customer satisfaction work. However, Reichhold correctly points out that “most customer satisfaction surveys aren’t very useful…. Their results don’t correlate tightly with profits or growth…Our research indicates that satisfaction lacks a consistently demonstrable connection to actual customer behavior (recommendation) and growth. ..In general, it is difficult to discern a strong correlation between high customer satisfaction scores and outstanding sales growth.”
What does correlate highly with profitability and sales is loyalty which Reichhold defines as “the willingness of someone – a customer, an employee, a friend to make an investment or personal sacrifice in order to strengthen a relationship. For a customer, that can mean sticking with a supplier who treats him well and gives him good value in the long term even if the supplier does not offer the best price in a particular transaction.”
Value, like the NPS, is specific to a product/market. The factors that define value for a credit card will be different than those factors that define value for mortgages. Similarly, farmers will define value differently when talking about tractors than will golf course maintenance personnel. Value, the best predictor of loyalty and NPS, will vary from product/market to product/market and accordingly, must be managed differently from one product/market to another.
Value is conceptually defined as the relationship between a product’s quality and the price paid for the product. Our research also indicates that the brand and/or corporate image may play a significant role in the value definition.
Simplicity is important to measurement. It is imperative that we make the collection of data to include asking the right questions of the right people to get meaningful data. Numbers can be crunched! Customer Advocacy measurements can be a great tool used properly and/or in context with product/market classifications. Creating the correct data sets and manipulating these numbers is what makes Six Sigma such a great companion to marketing.
Disclaimer: At the present time, I am working on a project with Six Sigma Marketing Institute
Related Posts:
Evaluating your Marketing Funnel, Only Seven Levers matter
Determining your Customer Perspective – Who do you want?
Determining your Customer Perspective – Can you satisfy these customer segments?
The Eagles always understood!
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