When I work with B2B client’s helping them identify their key customers and create a Customer Strategic Growth Plan to grow each target customer. As part of this process to Engage, Educate and Elevate the customer relationship, through the customers’ experience into profitable partnerships.
There are six critical datapoints to measure customer success that I encourage my clients to use regularly:
- Net Promoter Score
- Customer SATisfaction
- Customer Effort Score
- Customer Lifetime Value
- Churn Rate
- Sales per Customer
I remember working with the sales to close ratios in the 1990s this was when we were still cold calling. A lot has changed since then, the ratios I am interested in are the ones that have the customer at the centre.
PwC surveyed 15,000 consumers and found that 1 in 3 customers will leave a company they love after just one bad experience. While 92% would completely abandon a company after two or three negative interactions. However, according to Kapow, companies that prioritise customer experience generate 60% higher profits than their competitors.
Relationship between customer success and customer experience is that customer experience describes the entire customer journey and their interaction with the supplier and the product. In contrast, customer success looks to understand customer experiences and improve them for profitable growth.
Feedback is an essential part of the process if you want to increase customer success, grow the relationship and increase sales revenue. I am amazed that many B2B companies that do not use customer survey as readily as B2C organisations.
There are many reasons for this:
- B2B customers are seen as one unit rather than a group of individual experiences and opinions.
- B2C feedback responses are in the 000s, and so it is easier to see data trends and bottlenecks in the customer journey.
B2B is generally a higher value relationship, and therefore the need for feedback is essential to help develop the relationship long into the future. B2B suppliers will often work within a larger company with a small group of cross-functional individuals with varying roles. These roles might include end-user, decision-maker, specifier, and influencer; therefore, the supplier has access and opportunity to survey for the breadth of customer experience rather than depth. Feedback surveys and ratios lay the foundation for continued growth.
Customer survey and ratios have several benefits:
- The feedback closes the loop to improve performance continuously.
- Positive sales revenues follow happy customers and excellent customer experiences.
- Customer want results, surveys and ratios help you to measure results and see the trends.
- Presenting end-user real-time positive results to the customer is a competitive advantage.
- Use the results in a case study as social proof for other similar potential customers.
- Less than favourable results from the customer survey is an opportunity to demonstrate proactively, quickly and efficiently respond to issues.
There is some dispute between the predictive validity of some surveys; they all have pros and some cons and a specific value. I will discuss the feedback surveys and ratios that I encourage my clients to use to survey their customers and to assess the health of their customer relationship, retention and sales revenue.
Let’s first look at three feedback surveys:
- Net Promoter Score
- Customer Satisfaction
- Customer Effort Score
- Net Promoter Score (NPS)
NPS asks the question: “How likely is it that you would recommend our company or our products to your friends and colleagues?”
Research states that there is a correlation in the likelihood of a recommendation and revenue growth by assessing the customer’s likelihood of recommending your product, service or company.
Respondents to the question, ‘how likely is it…’, scoring 9 to 10 are Promoters and more likely to buy, remain loyal and refer your products or company. Respondents scoring 7 & 8 are Passives or indifferent to your products and those that respond 0 to 6 are Detractors and would not recommend.
NPS can be as low as −100 (everybody detracts) or as high as +100 (everybody promotes). Anything positive, higher than zero, like +6 is good. An NPS of +50 is excellent.
Calculate the NPS as the difference between the percentage of Promoters and Detractors. The NPS score is an absolute number between -100 and +100. If you surveyed your customers and have 20% Promoters, 65% Passives and 15% Detractors, the NPS would be +5 positive, which is good!
You can use the feedback results to segment your passive fans and develop strategies to turn them into active promoters of your company or products.
The NPS single-question asks customers to take a broad view of the brand or product and focuses their intention, rather than their overall feeling of satisfaction.
- Customer Satisfaction (CSAT)
CSAT is a metric that tracks how satisfied customers are with your organisation’s products or services.
The question: “How satisfied were you with your experience?” or “How would you rate your overall satisfaction with the [goods/service] you received?” Respondents use the scale between 1 Very unsatisfied to 5 Very satisfied
CSAT scores expressed as a percentage scale: 100% for total customer satisfaction and 0% for overall customer dissatisfaction. Calculate only responses of 4 ‘satisfied’ and 5′ very satisfied’; using the two highest values on feedback surveys is the most accurate predictor of customer retention.
Number of satisfied customers (4 and 5) /number of survey responses x 100 = % of satisfied customers.
CSAT targets an immediate reaction to a specific interaction, product or service, although limited in measuring a customer’s ongoing relationship with a company, you can also use multiple questions to focus on particular parts of the customer experience.
- Customer Effort Score (CES)
The easiest way to increase customer loyalty is by helping customers solve their problems quickly and easily. The Harvard Business Review article found little correlation between satisfaction and loyalty, whereas:
- 94% of customers reporting low effort said they would repurchase, and
- 88% said they would increase their spending.
If you think about it, the benchmark of satisfaction is a low bar to achieve, is that all you want for your customers experience?
The Harvard research discovered that ease of experience was far more critical, describing it as “processing fluency which is the ease with which information is processed.
Customers rank their experience on a scale ranging from “Very Difficult” to “Very Easy.” Ease of use determines how much effort was required to use the product or service and how likely they’ll continue paying for it.
Ease of a given experience is a better indicator of customer loyalty than measuring direct customer satisfaction. CES measures the user experience of a product or service.
These feedback surveys questions are quick and straightforward, and you can ask the questions across multiple experiences during a customer’s journey and get a bigger picture view of how your customer feels at various points during their lifecycle.
Customer loyalty is a real business driver of increasingly competitive advantage, and negative responses in these surveys alert you to roadblocks in the customer experience.
When Should You Use Customer Feedback Surveys?
- Following the post-purchase journey.
- After the customer lifecycle moments.
- Before renewal or following the contract anniversary.
- After customer support or demo interaction.
- Post customer onboarding.
Gathering customers view makes it easier to find potential and existing bottlenecks and improve the customer experience along the customer journey. However, feedback scores in themselves are useless unless you are willing to act and improve performance. It is best to supplement survey scores with further qualitative research to understand the drivers behind the results to ensure you take the right action to improve key business areas. The resulting ratios and ultimately gain happy customers willing to recommend your service to other similar customers.
Next, I will continue with the feedback ratios Customer Lifetime Value, Churn Rate and Sales per Customer.
Have you use these surveys or will you be using them in the future? Please let me know?