What we know
We want to know more. We want to be able to forecast our customers' actual behaviour. The mere judgement of how we perform, with a product that we sell or a service that we execute, does not provide us with the information that we need. If our satisfaction scores go up, very often there is no corresponding move in our business results at all. On the contrary, regularly a rise in turnover will lead to lower satisfaction scores!
That is why we are searching for more relevant information than just a score on a satisfaction survey. Of course you must know whether your company and your staff improved on last year’s performance. But that is not enough. We need to know how customers regard us relative to our competitors.
Customer satisfaction surveys, NPS or any other inquiry, for that matter, all measure fundamentally the same underlying construct. However, they ignore the context in which a customer makes his verdicts. Your customers see their buying decisions in a context of alternatives choices. We know that rank relative to competition is of more importance than other measures as a predictor of future success.
Traditional customer satisfaction inquiries are often flawed at best or misguided at worst. For example, we often overlook findings from behavioural economics, such as how the ordering of questions strongly influences the answers you get, for one thing. Your profitable customers are seriously underrated, to mention another. We also see strategic decisions and business investments taken on the basis of inquiries that suffer from unacceptably low response rates. We believe that investments should not be based only on customer satisfaction scores. On the contrary: they should be decided on the basis of relative performance. The goal of investments should be to improve the relative position of your company, not to improve customer experience as such.
With the benefit of hindsight, many of our customers have concluded that too many of their business decisions have been taken on the basis of assumptions that have been proven to be totally or at best partly wrong. A higher NPS score does not lead to better results, as many of the larger companies that have used NPS for years, are starting to discover right now. Most of customer behaviour (and our own, for that matter) is unstable: almost everyone switches brands and suppliers more than we tend to think. Basically, we live in an unstable world and customer behaviour is hard to predict. We experience more and more that a simple score on how we are doing in the eyes of a limited number of our customers, leaves us with a blinkered view of the customer horizon.
In our Columns and Articles pages we post regular new columns and articles that are written for NVSM and AFSMI. These are in Dutch language.