Customer Measures – Which Dial?

Predicting what customers want is more difficult than establishing whether they are happy with the service they have enjoyed in the past. But it is a vital part of customer retention and acquisition. Alan Pennington looks at how this can be achieved.
The area of customer measures has been the focus of much corporate attention over recent months as businesses grapple with the problem of how to measure their newfound enthusiasm for all things customer.
This is an area which has been dominated over recent years by the ubiquitous Customer Satisfaction Index or CSI, an invention which has been the cash cow of recurring revenue for countless global research businesses. It has become hallowed as the benchmark, both for monitoring internal performance and for measuring relative performance against external competitors. The question we should be asking is, does it live up to its billing and indeed ‘billings’ in pounds or dollars?
More recently we have seen the emergence of the Reicheld inspired Net Promoter score which relies on a single question, the answer to which he has shown with empirical evidence correlates to business performance. This is an attractive proposition indeed and one whose siren call is increasingly answered by very substantial businesses.
Put simply Reicheld is saying that if you ask customers to score your performance on a scale of one to ten, and take the net of the scores you will have a measure that shows the proportion of your customer base who will be growing, or shrinking, your business and this will impact on business performance over time. This measure now appears on senior managers’ and executives’ key performance indicators and personal KPI’s with a note writ large to ‘improve this score at all costs’.
The question we should be asking in this case is, how do we operationalize this in order to effect the required improvement? In short the answer is to do more of what you are doing well and less of what you are doing badly and focus on the detractors in the first instance and to monitor the trend of your results over time.
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