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Measuring customer satisfaction is not a new idea, but as technology puts more control in the hands of users, marketers are seeking out the optimal ways to measure how successful they are with their marketing messages, products and services.
Marketers are divided on how best to achieve this. Some are using an array of metrics and other processes to come up with a view of how they're doing with customers, while others are trying to simplify the process by using a single metric, such as the Net Promoter Score.
The NPS, developed by loyalty expert Fred Reichheld, is a score of customer loyalty based on a single question: "How likely are you to recommend our company to colleagues?"
Marketing organizations are also coming up with new metrics to gauge the customer experience.
Last month, the Chief Marketing Officer Council released a study on customer measurement and proposed a new performance indicator, the Customer Affinity Index.
The index incorporates traditional metrics such as brand awareness, trust and credibility, as well as metrics that evaluate other aspects of the customer relationship, including product relevance, value-added services and business problem-solving.
"Marketing has a critical responsibility to define and build customercentric businesses," said Donovan Neale-May, executive director of the CMO Council.
"To be more successful, marketers should adopt new performance measurements, like Customer Affinity, that are actually tied to the customer experience," Neale-May said.
Survey finds disconnect
As part of the study, the CMO Council surveyed more than 1,000 IT marketers and b-to-b technology buyers. It found that 56% of IT vendors perceived themselves as being extremely customercentric, but only 12% of customers agreed. Also, 85% of vendors said they were getting better at responding to customer needs, but only 55% of customers agreed.
Pat LaPointe, managing partner of MarketingNPV, a marketing measurement consultancy, said he has some concerns about the Customer Affinity Index.
"It is a promising direction," he said, "but absent much more investigation, it is likely to be another suit of the emperor's new clothes."
LaPointe said that while the research does a nice job of clearly articulating the elements of what might go into customer affinity, it falls short in two dimensions.
"It doesn't recognize that the complex cocktail that is customer affinity might differ dramatically from one industry to the next—and b-to-b technology is not an industry—and there is no reference to the interaction effects between the individual elements of the affinity cocktail," he said.
"This is another in a series of proposed silver bullets that represent a dangerous tendency to confuse survey-based research with the things that really impact the bottom line."
Taking their own measure
Marketers said it is too early to know if the proposed Customer Affinity Index will be an effective measurement tool for them, but in the meantime they are busy working on their own customer measurement efforts.
Bo McBee, VP-total customer experience and quality for Hewlett-Packard Co.'s Technology Solutions Group, said HP has three different levels of customer measurement efforts. "We are doing several things to underscore how important [customer measurement] is for us and how connected it is to our growth goals," he said.
The first level of measurement is a quantitative telephone and online survey, conducted annually with more than 30,000 customers of HP and its competitors. The survey is contracted out, and recipients do not know that HP is behind it.
"This shows us our performance relative to our competitors, and shows us where we have to improve relative to the competition," McBee said.
The second level drills down deeper into information uncovered in the annual survey, involving a combination of quantitative and qualitative research.
As part of this research, "we also measure the strength of our customer relationships," McBee said. "The drivers of engagement are a little different than the drivers of customer satisfaction. We look at how engaged HP is in helping customers solve their problems."
The second level of research also includes relationship assessment process (RAP) surveys for most of HP's large enterprise customers, delving into what kind of relationship they want with HP. "Some of them just want us to be a vendor, and some of them want us to be a trusted partner," McBee said.
Finally, HP receives daily feedback from its hundreds of thousands of customer interactions, including everything from Web-based surveys to direct mail cards.
"You can't be world-class without ongoing customer feedback," McGee said.
He said all this information is used by executives throughout the organization to achieve their total customer experience (TCE) priorities set for the year.
"All execs have a piece of that strategy, from marketing, sales, engineering through delivery. Everyone has a contribution."
McBee said HP's strategy is to look at the customer from many different angles, rather than using a simple metric such as the Net Promoter Score.
"We don't believe NPS is everything it's written up to be," he said. However, he added, "If you're looking for ways to streamline your approach, you can make it work."
Other organizations are finding success with the NPS.
NPS scores with tektronix
Martyn Etherington, VP-marketing at Tektronix, which manufactures test and measurement equipment for communications networks, said the company began using NPS with its largest customers about 18 months ago.
"The customers who have a very high NPS are the customers that not only remain loyal but have demonstrated growth through orders with us," he said.
"There is an absolute correlation between people who are your advocates and growth. Growth should be the ultimate metric for marketing, period."
Tektronix uses different customer satisfaction metrics in certain areas of the business, such as service, although even those areas are moving toward implementing NPS, Etherington said.
"I don't know if it is the ultimate metric, but in the absence of any other really good lead indicator to growth, this is probably the best that I've seen."
Other marketers are rolling out new customer measurement programs this year.
Gates Corp., a Denver-based industrial manufacturer, is in the process of doing new customer-focused research with brand strategy firm Siegel+Gale, New York.
"We're trying to go beyond customer satisfaction to dig into how our customers make choices," said Rich Carvill, marketing manager of the industrial power transmission group at Gates.
"One of our challenges is that Gates is a global leader in most of our markets, so we are trying to understand where we go from here and where we grow. We really want to dig for a deeper understanding of what our customers want and how they make decisions."
Gates conducted its first wave of quantitative research among its customers and competitors in the fall and is now analyzing results.