Welcome to the January issue of ValueNotes Connect.
Much has been written, and talked, about the Net Promoter Score (NPS), a key metric for customer loyalty. Corporations across the world have rightly recognised the power of the almighty score. An oft asked question: How many of my customers have rated me a 9 or a 10 (making them satisfied customers or promoters), and how many have given me a 6 (detractors)? To quote Frederick F. Reichheld, the inventor of NPS, “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.”
But is it only about the score? No. Businesses must address the positive and negative qualitative comments that customers have to say about their product (or service). A customer feedback programme invariably results in an increase in the number of promoters and a reduction in detractors, thus helping businesses achieve sustainable and profitable growth.
For businesses that sell to enterprises, the benefits of customer retention (or costs of neglect) can be more acute. This is because, for B2B businesses, the (relative) number of clients is small and acquiring new clients is a long and expensive process. Secondly, quantitative methods (eg. large online surveys) may be inappropriate given the smaller client base with differing needs. In our experience working with several large multinational and Indian companies, this is best achieved by a formal Voice of Customer process, ideally conducted by an independent third party.
Do read the findings of a survey we conducted of senior decision-makers in Indian and multinational companies. We asked them how they gathered customer feedback and how the inputs were being used.
As always, we hope you enjoy reading our newsletter, and we look forward to your comments. And we wish all our readers the very best for 2017!
Net Promoter Score: Is it just about the score?
by Nandita Harendra
|I often wonder about how the Net Promoter Score (a key metric for customer loyalty) is being used. Are companies genuinely keen to listen to me (a customer) and address my concerns? Or was the customer feedback exercise mere compliance? Customer satisfaction surveys are much more than an NPS. Not only must companies probe to understand the why of a particular score, but that’s only half the story; it’s what you do with the data that counts. Addressing the qualitative comments and concerns that customers have about your firm and your product (or service) is imperative.|
Why structured “Voice of Customer” studies help in customer retention
by Arun Jethmalani
|As global and local economies struggle to grow, traditional sales and marketing strategies are proving less and less effective. Companies are less motivated to take on new vendors or try new services, decision making is agonizingly slow, and pricing is cut-throat. In this situation, the RoI on sales and marketing has fallen significantly, as new customers are few and far between even as sales costs are rising. At the same time, unhappy customers are more inclined to move to a lower-cost competitor.|
Some client problems we have solved: