Customer Satisfaction = Marketing Success

Your marketing success (at prospecting, cross-selling, and retention) is inextricably tied to customer satisfaction. Measuring customer satisfaction has traditionally required elaborate questionnaires. However in 2004, Fred Reichheld authored a Harvard Business Review article that offers a simple and effective substitute.

He suggested that a single question—“On a scale of zero to ten, how likely is it that you would recommend [company name] to your friends or colleagues?” —could effectively measure customer satisfaction. And he demonstrated that “net promoter scores” which measure the difference between the percentage of customers who give high responses (promoters) and those who give low responses (detractors) correlate closely with a company’s revenue growth. [Promoters are defined as customers responding with a ‘9’ or ’10,’ while detractors respond with a ‘0’ through ‘6.’ Customers who respond with a ‘7’ or ‘8’ are considered “passively satisfied,” and aren’t counted in the ratio.]

Since the article’s publication, this satisfaction measurement system has been embraced by a list of companies that includes General Electric, American Express, and Intuit.

Why it works is simple enough. Detractors are more likely to defect, and less likely to buy additional products or services from a company. Further, they are less likely to provide referrals to your salespeople, and more likely to write uncomplimentary things about your company online (which is just a reflection of what they are saying to people face-to-face). Promoters are your cheerleaders, providing the referrals and testimonials that should be two of your primary prospecting resources.

[Note: approximately 10% of the population are defined as “Influentials,” a term coined by research company RoperASW to describe those whom others turn to for opinions and advice. Customers in this segment act as “magnifiers,” and have a disproportionate effect on your company’s reputation. It behooves you to give Influentials special attention.]

Having your customers answer the satisfaction question isn’t the end of the process—it is just the beginning. To take advantage of customer responses, you need to leverage your promoters to produce referrals and testimonials, and warm up the passively satisfied to turn them into promoters. Finally, you need to talk to your detractors, record and quantify their complaints, and then do something about them!

If you would like to talk about establishing a customer feedback program, or giving your current program a jump-start, please give me a call. Your CMO will be happy to discuss steps you can take to create and exploit customer satisfaction data!