Happy with your Customer Satisfaction score? Don’t be! Here’s why:
Cash is King – Profit an Opinion
Even the one metric (profit) that we all acknowledge gets challenged. This quote reached me through Twitter, from a person following a Financial Management for Non Financials-course at that time. It is as much a true statement as a false one. Having a bundle of cash but no activities to work with it does not make business sense. On the other hand Profit actually is an opinion, since the annual profit-statement depends on a few rules that we set to calculate profits. If we change the rules (or go to another country) with the same revenue and costs you can have different Profit. Hence my opinion that the quote above is as much true as it is not true.
The same goes for metrics that try capture Customer Satisfaction or Loyalty. Any metric you choose can be true or false. And one thing is for sure: The killer metric does not exist! Let me explain:
CSAT nor NPS are exclusively “right”
In my experience lots of companies have very decent to even good Customer Satisfaction (CSAT) scores (in The Netherlands for example scoring 7,8 , on a scale of 10, is considered a good score). Nevertheless also companies with little to no growth or even little to no profit score as high as this or higher. The conclusion can be that these CSAT-scores do not provide any insights to improve your business performance. I am inclined to go with that conclusion. Are you?
A similar discussion is still going on in respect of the NetPromoterScore (NPS) that tries to capture Customer Loyalty. I will not dive into that discussion here. If you are interested just hit this link.
Changing the rules of the game
Back to CSAT: I experienced in my carreer great improvements through measurement (and acting upon) CSAT:
When I was working for Center Parcs as a Management Trainee, almost 15 years ago, this company had a long history of great CSAT scores. Even for the Dutch the scores were high: high eighties where no exception. Still “we” experienced a decline in bookings and (F&B) spend during that time (and it where the growing years), so something had to happen.
Center Parcs introduced a new CSAT metric that focussed on Top Box scores. They spend some time investigating what customers really cared about and came up with a new CSAT form on which customers where no longer asked to score on a scale of ten. Per question the customer only got 4 options: “-/-” or “-” or “+” or “+/+” and they told “us” they would be measuring on percentage of Top Box (the “+/+”).
Without changing your play
As nobody in the company really thought improving service was possible, little changed in the beginning. Of course management started a program to explain and drive what they where looking for (I’ll get back to that later), but most people where convinced that service was already at the highest possible level. Until the first results came in: week after week a dramatic under-performance compared to target (I really do not know the exact scores anymore, but I remember the turmoil).
Now it became clear to everyone that something needed to happen, that “management” was not just saying somethings about creating great and new experiences (Center Parcs did not invent experience management, but the became quite good at it already sometime ago), they actually meant it. And then it happened: sparked by the Leadership-team and local management, all employees got involved in the process of creating new experiences. Simple low-cost experiences as well as high-value investments, throughout the company. Experiences that did not only surprise the customer, but also generated increase in bookings, on-site revenues and profits.
What gets measured gets done
My conclusion: CSAT (or any other metric you choose) will not work as a killer metric if you remain satisfied with mediocre or even good scores compared to competition (or common understanding). When you’re stuck at that ceiling, be creative, challenge everything you already know and take it from a different angle. Re-invent the metric that works best for the situation you’re in.
It may well be (and it is likely to be so) that Center Parcs at any time has hit the ceiling of this new “killer metric” too. And this will happen to you too, or has happened to you already. Don’t just sit around and wait untill you are hit by revenue declining and/or customers leaving or staying away. Dive in and create a follow-up metric that will work for you there and then.
Killer metrics do not exist, they are company specific and should evolve with it!
Where are you at?