Jeanne Bliss just wrote a wonderful article for MarketingProfs on how survey-based success metrics are manipulated to help meet and exceed objectives....


Read the article, titled "Is Your Company a Customer Survey Score Whore?" here.
Jeanne shares how companies set metrics like customer satisfaction, loyalty and net promoter scores to measure their performance without really using these to manage their customer relationships. I completely agree with her message and want to further emphasize the need to put greater focus on the negative measures, or the shortfalls, to drive success.
Human tendency is to concentrate on the positives and this is especially true when it comes to setting goals, managing performance, and even designing surveys. But the opportunity to improve, which is ultimately what we want to achieve, lies in what we can learn from the negatives.
As Jeanne's article implies, tracking dissatisfaction rates and competitor loyalty will go much further just satisfaction and loyalty. If your satisfaction rates change from 95% to 93% it may not seem significant, however if dissatisfaction rates increase from 5% to 7% it should be a cause for alarm. What's going wrong and why?
Net promoter score is calculated by taking the percent of customers rating their likelihood to recommend as 9 or 10, minus the percent providing a rating of 0 to 6. As an example, a survey showing 40% positive and 20% negative (with the balance being neutral at 7 or 8) will give you a NPS of 20%. Over the next period you may achieve your goal of 25% NPS and celebrate that success. However, if this is derived from an increase to 50% positive ratings as well as an increase in 25% negative ratings, the 5% jump in negative ratings may get less attention yet have a much greater impact on financial performance. You need to understand what is driving both numbers from the customers' perspective and what those numbers mean from a business perspective.
So we want to see greater attention on the negative side. One area that can benefit from a major mindshift is in tracking of the customer funnel (or buyer's journey) from the stage of unaware prospect to long-term profitable customer. Sales organizations manage their portion of the funnel (their pipeline), yet just few marketing organizations really manage their performance around the customer funnel. Regardless, the tendency is to concentrate on conversion or progression rates.
A great lesson I learned from Hugh Macfarlane (author of The Leaky Funnel) is to focus on "leakage." Having some prospects leak from the funnel can be quite productive but for the most part, any point on the funnel where our target audience does not progress to the next stage represents a failure to generate a sale.
Leakage can happen early in the funnel when our marketing fails to generate awareness, consideration, or purchase intention. It can happen in the latter half of the funnel when we cannot engage prospects or motivate a purchase. And it also happens after the sale when the customer experience fails to lead to repeat purchases and loyalty.
The word failure is strong and no one wants to be counting their failures while ignoring their successes. So take the concept and consider leakage as profit-generating opportunities. You'll only be able to capture more of these profit-generating opportunities if you work hard to understand who leaks, at what points in the customer funnel, and why.
Finally, goals and indicator metrics must remain distinct. Goals should be set based on the actions customers take. Customer opinion metrics have greater value as early indicators of what actions might be taken and what potential problem might be emerging.
Marketing managers can achieve business goals for profitable growth as they work harder to get honest customer opinions, provide easy ways for customers to share complaints, and track metrics that unlock opportunities to deliver a superior customer experience.
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ABOUT THE AUTHOR
image of Jim Lenskold

JIM LENSKOLD has brought 20 years of innovation in marketing ROI measurements and analysis into the mainstream marketing organizations through consulting, publishing, speaking and workshops around the world. His book Marketing ROI: The Path to Campaign, Customer, and Corporate Profitability is translated into eight languages and was named one of the
five most influential marketing books of 2004.

Founded in 1997, the Lenskold Group helps Fortune 1000
and emerging mid-size companies adopt advanced marketing ROI capabilities and build greater accountability and credibility for marketing. Lenskold Group specializes in practical measurements, ROI planning tools, and financial impact analysis to guide profitable acquisition, retention, and
growth strategies.

Jim's career began at AT&T where he helped evolve the telecommunications leader from a monopoly to a well-respected competitive marketer in the mid-1980s through early 1990s. He helped form the customer acquisition and customer retention organizations and managed a $20 million marketing budget for retention strategy and customer loyalty marketing. He also successfully launched and grew a technology firm before starting the Lenskold Group.

The Lenskold Group serves Fortune 1000 and emerging companies in the US, Canada and UK. Jim can be reached at jlenskold@lenskold.com or (+1) 732-223-8886.