Tag Archives: NetPromoter

The Third Secret – Targeting Qualified Prospects

Posted on 3 October 2011 by | Leave a comment

The third secret customers keep from you is which [future] customers to target.  If you knew the answer to this question, you could grow your customer base in a cost-effective way by amortizing customer acquisition costs across a larger number of clients.  There are two ways this may occur:

Wanted: Qualified Prospects

Ask for Qualified Prospects

Customers tell your company who would benefit from your product.  This information won’t appear magically so you have to ask for it.  (Note: some companies offer referral bonuses for this information.  I’m against such perks because they introduce a quid pro quo aspect that resembles pork-barrel politics.  Better that your product is so strong that they feel like their reputation will be enhanced in the process.)  The company actively and directly participates in this method.

Earn Qualified Prospects

Customers tell their contact that you would help them solve a problem.  This method is word of mouth (WoM) marketing and is one of the premises behind NetPromoter Scores.  To make it work, the customer’s experience with your brand must be so positive (or cult-like in the case of Apple) that consumers purchase goods and services to be part of the experience.   The company actively but indirectly participates in this method.

Gain Customer Trust

Regardless of which method you choose, your goal is to gain customer trust through a valuable customer experience:

  1. Know thy customer
  2. Create a great product that meets customer goals
  3. Support the customer like they’re the last customer on earth
  4. Develop some market buzz by appealing to perceived customer needs
  5. Laugh all the way to bank like Apple

The pivot point in this secret and others is that customers must trust your company and brand.  Products and service must work together to create an experience that customers value.  When this work is done customers become willing to reveal qualified prospects and interactions become collaborative endeavors which benefit company, customer, and shareholder.

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The Key to Unlocking 3 Customer Secrets

Posted on 14 September 2011 by | Leave a comment

Some of the most crucial customer conversations never occur because customers keep secrets.  Unfortunately, if you knew the secrets (and their answers) you could maintain and grow your customer base, increase revenue per customer, and innovate in meaningful ways.

Starting today and in successive posts we’ll examine three (3) secrets and the keys to unlock those secrets:

  1. When they’re ready to leave
  2. What they need (wants vs. goals)
  3. Which other customers to target

When they’re ready to leave – When customers reach the point of leaving you for the competition they have decided they are no longer willing to invest (or waste) their time helping you create a solution.  In fact, they have actively and financially disengaged from your company.  In Influencer: The Power to Change Anything, the authors suggest that customers such as these have already answered no to one or both of these questions:   “Can I do it?” and “Is it worth it?”

Customer interactions run the gamut.

Extremely positive – customers actively participate by suggesting ways to modify your products/services (innovating) and then in advocating on your behalf (selling)

Extremely negative – customers are so upset with your company that they leave as fast as possible, convince others to leave and prevent new customers from even starting to do business with you.  (See more on the power of word of mouth.)

The solution?

Ask:

  • Are you satisfied?  Or would you purchase again?
  • How likely would you be to recommend to your friends/colleagues?  Yes, the famous (some say infamous) NetPromoter question returns again.  The value here is that answering in the affirmative requires the respondent to invest themselves.
  • Would you like someone from the company to contact you about your experience?

Observe:

  • Are survey response rates increasing (good) or decreasing (potentially bad).  A decrease in response rates is indicative of lower engagement and loyalty and could be a precursor to defection.
  • See which companies get feedback after good/bad experiences in this Temkin Group report.

Respond:

  • Companies that fail to respond nullify the survey itself.  They communicate an ambivalence of commitment.  In essence, we want to care (we’ve checked the box), but our inaction should tell you that we don’t.

Customers are the lifeblood of any company.  Lose them and the revenue stream gets disrupted.  So it stands to reason that companies should invest in serving their customers’ needs.  The pivot point in unlocking when customers are ready to leave is to simply ask.  Not all customers will tell you but as Wayne Gretzky once said, “you miss 100% of the shots you never take.”

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Posted in Customer Loyalty, Customer Service

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3 Ways to Quantify Customer Service Success

Posted on 16 November 2010 by | 4 Comments

One of the reasons customer service is often relegated to the sidelines is that companies struggle to understand the value of delivering the service itself.  How much better could a company perform if service improved from good to great?

A recent HBR post by Whitney Johnson made me think about how customer service professionals can measure the value they provide.  We aren’t sales people, though we impact revenue.  We aren’t marketers, yet our frequent customer interaction shapes the brand (for better or worse).  Here are 3 ways to define the impact of customer service on company success.

  1. Renewal Rates – When customers continue to purchase a subscription (in the case of SaaS) or maintenance (in more conventional software license models) they are literally voting with their wallets.  An improvement in renewal rates increases the customer lifetime value and translates directly to profitability.
  2. Satisfaction or Loyalty Scores – All companies should measure customer perception of their organization, its products, and services.  Whether the measure is a customer satisfaction (CSAT) or loyalty through a measure like NetPromoter Scores, it is imperative to track changes in customer feedback.  Even the rate of response is something to measure since a decrease in response rate could signify a weakening loyalty to your company and its products.
  3. Referral Rates – When customers stake their reputation on your products/services you have achieved a level of loyalty that helps your sales team in future prospecting.  This premise is so important that companies will go to great lengths to ensure their first customers are true fanatics.

A word of caution… these measures cannot be used in isolation and must be used together.

  • High renewal rates with low satisfaction measures indicate that you have customers firmly in your grasp, but that customers want to escape as soon as possible.
  • High satisfaction rates coupled with low renewal rates may signify that your products/services are becoming less relevant in the marketplace.

The pivot point is that when customers tell us and others about their satisfaction and follow-up by renewing services/products, then we can be confident we are adding value.  Measuring the attributes above is a good start to gaining insight into the size and scope of the value.

What measures have you found useful to use when trying to quantify value?

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Posted in Best Practices, How to Deliver Customer Service, Why Bother with Customer Service

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