While I agree, there are some pretty impressive “core customer” metrics on the market today – I do not subscribe to the “one size fits all” model.
Absolutely, you need to know what your customers want and you need to develop a strong Voice of the Customer process to gather that information; however, it’s “What” data you collect that concerns me.
I love the “one question” concept used by the Net Promoter Score (NPS®) metric. And I fully support the value in asking the likelihood that the customer “would recommend” the product or service to others.
But knowing the likelihood of recommendation does not tell the whole story – especially when asked too soon after the purchase.
A happy customer on Day 1 or even Day 30 is not promised to be a happy customer on Day 120 or Day 366 or Day 1825.
Some companies believe the best measure to be customer satisfaction, others measure customer perceived value and still some stand firm on measuring customer preferences. I highly recommend a combined approach.
My 3 measures of choice are:
1. Customer Satisfaction is the first measurement – taken at the conclusion of a purchase or shortly thereafter. It measures the customer’s experience before and during the purchasing cycle. Improving customer satisfaction can increase initial sales.
2. Intent to Repurchase is the second measurement – taken at approximately 3 months after purchase (timing varies by product life). It measures the customer’s experience with the product and any post purchase interactions with your company. Increasing repeat sales will increase customer lifetime value.
3. Would Recommend is the third measurement – taken at approximately 9-12 months (timing varies by product life). It measures the customer’s perceived value after long-term use of the product and engagement with your company. Improving customer perception will increase referrals.
When used in a properly timed sequential system, these three measurements give a clear picture of customer loyalty and its likely impact on your company profit margins.