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I understand why companies like to focus on positive measurements — be they sales, profits or stock price. We all want to feel good.
But if you want to improve, you also have to identify what you need to do differently or stop doing.
In my last post, NPS: the danger of its singularity, I examined the Net Promote Score (NPS), a phenomenon in the world of customer experience measurement. But, as I explained, a sole focus on NPS can force you to overlook the complexity of company-customer relationships and the cause of your problems. What’s more, it measures an outcome, not the actions required to achieve it.
Stop, replace or adjust
Just as the mechanic must understand what’s wrong with your car in order to fix it, marketers cannot focus only on their successes. You want your car, and your company, to perform as well as it can. That means looking under the hood, with the help of computer diagnostics of course, to see what needs to be stopped, replaced or adjusted.
Diagnostics and measurements need to inform action. They need to look beyond the success yard stick of NPS. They need to identify problems, such as employee churn, customer churn, customer complaints, and customer problem experience.
Ultimately, the role of a good marketer is to figure out the measures that inform action. In the ideal world, those actions should drive more of those success outcomes – like improved sales, profits and market share.
Or they’ll stop buying
Customer problem experience is one of the best predictors of market impact. When customers experience problems, they are far more likely to take action than those who do not.
That action may be manifested as inaction or disloyalty. That is, the customer will stop buying from the company. They will buy less frequently and, depending on the problem severity, they will tell others about it – spawning more potential disloyalty to the company in question.
Based on over 250,000 customer responses from research conducted by Verde Group over the past four years, about 70% of consumers who choose to stop doing business with a company do so because they experienced a problem. Imagine being in control of that much risk.
Attitudes and behaviours tend to be consistent. Positive attitudes lead to approach behaviors; negative attitudes are associated with withdrawal behaviors. Negative attitudes, particularly when emotionally charged, can cause very negative withdrawal or disloyal behavior.
Ask about specifics
The measure of problem experience is not straightforward. You can’t simply ask a customer if they’ve had a problem. Most will say “no”. That doesn’t mean they didn’t experience something negative.
The best way to measure the extent to which your customers are experiencing problems is to ask them specifically about potential known problems. Have them answer “yes” or “no” to your list. Then use the output from that line of questioning to analyze the attitude-behavior link. Customers will answer differently. In the end, you will get a clear picture of the key experiences that are most likely suppressing market behavior and therefore, market value.
It takes guts to scrutinize problems. But that’s what leadership is all about.
Chief Executive Officer, The Verde Group