by: Jennifer Rice
There's a great article in the December issue of Harvard Business Journal: "The One Number You Need to Grow." . That one number is how many customers promote your business. Instead of measuring customer satisfaction, simply ask your customers one question: "How likely is it that you would recommend (company X) to a friend or colleague?" The author's research indicated that responses to this one question were highly likely to predict actual customer behavior that would lead to profitable growth. The article summarizes what Church of the Customer has been evangelizing: "The only path to profitable growth may lie in a company's ability to get its loyal customers to become, in effect, its marketing department."
Here's one of the takeaways from the article that will help me do a better job in consulting for my clients. I've been working with an online research firm to develop online customer surveys with live cross-tabs for several clients... it's pretty cool, and generates extremely useful and actionable information. I always include questions on likelihood to recommend and likelihood to purchase additional products. However, here's how the HBR article recommends structuring the survey:
"Resist the urge to let survey questions multiply; more questions diminish response rates along with the reliability of your sample. You need only one question to determine the status -- promoter, passively satisfied, or detractor -- of a customer. Follow-up questions can help unearth the reasons for customers' feelings and point to profitable remedies. But such questions should be tailored to the three categories of customers. Learning how to turn a passively satisfied customer into a promoter requires a very different line of questioning from learning how to resolve the problems of a detractor."
On a related note, here's the 'duh' quote of the day from the top story at Reveries. They're interviewing Robert Lutz, GM's Vice Chairman of Product Development, on getting Pontiac out of the 'cheesy' category. He says, "You just have to get vehicles more to the point where people want them."
Original Post: http://brand.blogs.com/mantra/2004/01/promoters_versu.html