- One of the main takeaways from our research is that companies can keep customer surveys simple. The most basic surveys - employing the right questions - can allow companies to report timely data that are easy to act on. Too many of today's satisfaction survey processes yield complex information that's months out of date by the time it reaches frontline managers. Good luck to the branch manager who tries to help an employee interpret a score resulting from a complex weighting algorithm based on feedback from anonymous customers, many of whom were surveyed before the employee had his current job.
- Contrast that scenario with one in which a manager presents employees with numbers from the previous week (or day) showing the percentages (and names) of a branch office's customers who are promoters, passively satisfied, and detractors - and then issues the managerial charge, "We need more promoters and fewer detractors in order to grow" The goal is clear-cut, actionable, and motivating.
- In short, a customer feedback program should be viewed not as "market research" but as an operating management tool. Consider Enterprise Rent-A-Car. The first step in the development of Enterprise's current system was to devise a way to track loyalty by measuring service quality from the customer's perspective. The initial effort yielded a long, unwieldy research questionnaire, one that included the pet questions of everyone involved in drafting the survey. It only captured average service quality on a regional basis - interesting, but useless, since managers needed to see scores for each individual branch to establish clear accountability. Over time, the sample was expanded to provide this information. And the number of questions on the survey was sharply reduced; this simplified the collating of answers and allowed the company to post monthly branch-level results almost as soon as they were collected.
- The company then began examining the relationships between customer responses and actual purchases and referrals. This is when Enterprise learned the value of enthusiasts. Customers who gave the highest rating to their rental experience were three times more likely to rent again than those who gave Enterprise the second-highest grade. When a customer reported a neutral or negative experience, marking him a potential detractor, the interviewer requested permission to immediately forward this information to the branch manager, who was trained how to apologize, identify the root cause of the problem, and resolve it.
- Despite the system's success, CEO Andy Taylor felt something was missing. Branch scores were not improving quickly enough, and a big gap continued to separate the worst-and best-performing regions. Taylor's assessment: "We needed a greater a sense of urgency." So the management team decided that field managers would not be eligible for promotion unless their branch or group of branches matched or exceeded the company's average scores. That's a pretty radical idea when you think about it: giving customers, in effect, veto power over managerial pay raises and promotions.
- The rigorous implementation of this simple customer feedback system had a clear impact on business. As the survey scores rose, so did Enterprise's growth relative to its competition. Taylor cites the linking of customer feedback to employee rewards as one of the most important reasons that Enterprise has continued to grow, even as the business became bigger and, arguably, more mature. (For more on Enterprise's customer survey program, see "Driving Customer Satisfaction" HBR July 2002.)
Who benefits from complexity?
- If collecting and applying customer feedback is this simple, why don't companies already do it this way? I don't want to be too cynical, but perhaps the research firms that administer current customer surveys know there is very little profit margin for them in something as bare-bones as this. Complex loyalty indexes, based on a dozen or more proprietary questions and weighted with a black-box scaling function, simply generate more business for survey firms.
- The market research firms have an even deeper fear. With the advent of e-mail and analytical software, leading-edge companies can now bypass the research firms entirely, cutting costs and improving the quality and timeliness of feedback. These new tools enable companies to gather customer feedback and report results in real time, funneling it directly to frontline employees and managers. This can also threaten in-house market research departments, which typically have built their power base through controlling and interpreting customer survey data. Marketing departments understandably focus surveys on the areas they can control, such as brand image, pricing, and product features. But a customer's willingness to recommend to a friend results from how well the customer is treated by frontline employees, which in turn is determined by all the functional areas that contribute to a customer's experience.
- The path to sustainable, profitable growth begins with creating more promoters and fewer detractors and making your net-promoter number transparent throughout your organization. This number is the one number you need to grow. It's that simple and that profound.