I found a new Dutch initiative to measure a Company’s Customer Performance: The Dutch Customer Performance Index (DCPI) (Dutch only) – a new objective and validated index for measurement of Customer performance – . I thought it worthwhile sharing with you.
The Dutch Customer Performance Index is an initiative of the Customer Insights Center of the University of Groningen (Dutch only), intelligence bureau MIcompany and market researcher MetrixLab. The University of Groningen is responsible for the scientific bases of the research. MIcompany determines wich value companies create for themselves from their Customers and MetricLab is repsonsible for data collection and building the benchmark database.
The DCPI conducts their research on a regular basis for 80 of the largest service providers in The Netherlands, which is based on a research base of 4.000 Dutch consumers.
The DCPI measures and compares these 80 companies based on two perspectives of a company’s Customer performance:
- The value a company creates FOR their Customers: Value to the Customer (V2C)
- The value a company creates for themeselves WITH their Customers: Value to the Firm (V2F)
The Value to Customer Dimension
- Relationship Equity: Valuation by Customers of the relationship with the company.
- Value Equity: Valuation by Customers of the price-to-value relationship.
- Brand Equity: Valuation by Customers of the brand
- Emotions: Valuation by Customers of both positive and negative emotions that can be associated with a company
The Value to Firm Dimension
- Revenue: Customer spend on a company’s service(s)
- NPS: Net Promotor Score
- Retention: The likelihood of Customer retention
- Risk: The risk of future revenue. This one is based on the variation between the three previous components. In short: the higher the variation between the three individual scores, the higher the risk.
My take on this
I like this research for a few reasons:
- It’s Dutch.. but that doesn’t mean anything to most of you probably ;-)
- It has a scientific/academic foundation and the research is conducted under the responsibility of a respected Dutch University.
- The two dimensions fit into my “value co-creation” thinking.
- The fact that the Value to Firm dimension does not talk only of financial value and it’s not based on one number.
- I particularly like the way the research approaches the Risk of future earnings by bringing it into the equation for starters, but mainly by it being a component based on the variation between the three other components. This makes a whole lot of sense to me.
Additionally I would like to add that I’m not a fan of NPS as an indicator. Most certainly not when it’s presented as a “silver bullit”. I would choose to add at least one more question to the NPS question:
- Did you recommend company x/y/z over the past three months.
Unfortunately I do not have insight in the questionnaire itself. Hopefully I will obtain this. If I do, and get permission, I will put it up here too.
Curious as to what you all think. Is there something similar to this somewhere else in the world? If so, how’s that working? Is this the closest we get to measurement of value co-creation on a company to company comparable level? If not, what are your suggestions for improvement?