I'm a nut about feedback. If I've learned one thing in my business and consulting life, it's to ask every client how they feel about the service my company provides. This has to go hand-in-hand with making clients feel comfortable about being honest. My business has profited enormously from being guided by what works for our clients -- but even more by learning what doesn't.
However, my downfall has always been wanting to ask every possible question and gather every nugget from a client survey. You figure you have their valuable attention for a moment, how can you squeeze the maximum amount of information from that interaction?
On the other hand, I've always wanted (and advised others) to include some way to compile the customer satisfaction surveys into one number that can be compared, quarter to quarter, year to year.
One size fits
After reading about a fascinating study of 130,000 buyers in many industries as outlined in "The One Number You Need to Grow," by Frederick Reichheld, in The Harvard Business Review (12/03), I feel like I have seen the light.
I've just learned that there is a survey question that will tell me who will enthusiastically refer more business to me and who will buy again from me. This question foretells my company's future for growth and market domination. That's right, one question. Plus, I've learned a simple new process for obtaining a final number that can be compared year to year. Interested?
The question is, "How likely is it that you would recommend the company to a friend or colleague?" Clients pick the answer from a scale of 0 to 10, where 10 means "extremely likely," 5 means "neutral," and 0 means "not at all likely."
Nothing too new and different about that. But the process of scoring the survey answers is quite different.
Answers are tallied in only two categories. The highly positive answers -- 9s and 10s -- are totaled, and the percentage they represent of the total survey is then computed. These enthusiastic referrers are considered "Promoters" of the company.
Then, those who answered with a lackluster number -- anywhere from 0 to 6 -- are tallied, and the percentage they represent of the total is calculated. These folks are "Detractors."
The end result subtracts the Detractor percentage (say 20%) from the Promoter percentage (say 49%) to get a net-promoter score (in this example, 29%). Not hard, and it makes sense.
In remodeling, we've long known the high value of referrers to our businesses. For many companies, especially design/build companies, referrals and repeat customers are the major source of new business. But this new process creates a metric that has statistical validity. We can use it to monitor our progress, or lack thereof, from year to year. It reduces client opinion about your company to a single, specific, and measurable number.
Follow up on the good and the bad
Focusing progress on this one question doesn't mean you can't mine clients for more detail about their views on how your job, or process, proceeded. You may well want to do phone or in-person follow-up interviews with some who gave you very high scores and some who gave you marginal or low scores. That will give you more detailed data with which to accentuate the positive and eliminate the negative.
The study's author notes, "The median net-promoter score of more than 400 companies in 28 industries ... was just 16%." He goes on to state that "the companies with the most enthusiastic customer referrals, including eBay, Amazon, and USAA, receive net-promoter scores of 75% to more than 80%."
The article also includes information on the considerable research explaining why this question correlates so effectively with growth and domination in an industry where other commonly asked questions do not.
I'm off to simplify our surveys. How about you? --Linda Case, CRA, is founder of Remodelers Advantage Inc. in Fulton, Md., a company providing business solutions through a network of experts and peers.