Is Net Promoter Really the Ultimate Question?

For years, I’ve been counseling clients to use Net Promoter as the metric for measuring everything from overall brand health to the success of an event, customer satisfaction to online experiences. Undoubtedly, the likelihood of recommending a product or service to a friend is really important in the scheme of things but is it sufficient to make intelligent business decisions? Can one question alone even provide a clear picture of brand loyalty? After interviewing Calvin Vass, Senior Manager of Research at CDW, a company that has turned research into an insight-revealing, decision-enhancing, revenue-generating machine, my answers to the above questions in a word, is a contrite “No!” More importantly, my interview with Vass provides an exemplary questionnaire for any business looking to use research to reveal and leverage the “voice of the customer.”

Are you asking the right questions?

At the heart of any good research inquiry, of course, is the quality and ultimate value of the questions you ask. Over the last 11 years, CDW’s Vass has worked diligently to refine the questions his company asks, by listening to feedback from research professionals, his CDW coworkers and even the customers themselves. Rather than depend on one question, CDW’s loyalty index is based on an approach developed by Walker Information. The questions explore, according to Vass, “different dimensions of the relationship; what the customer plans to purchase with us, if they are committed and what they would do if we went away.” Explained Vass, “Net Promoter is a one-dimensional kind of metric; one will often get better, more consistent results by asking more questions.”

Can you identify the questions that correlate strongest to your company’s sales?

The holy grail of any research program is to find the single barometer that has the strongest correlation to business health. For some companies, Net Promoter is this barometer. For CDW, it was the combination of their Customer Loyalty Index and a highly evolved loyalty program. Through their loyalty research, CDW also discovered that customers who filled out their survey wanted to see their feedback implemented. Consequently, CDW built a system that feeds customer complaints right back to sales for prompt resolution.

Do you segment your studies?

While Net Promoter divides customers into two camps, Promoters and Detractors, this black and white segmentation may or may not be right for your business. CDW elected to segment its market surveys into two main categories, Active Customers and Less Active Customers. The first group is surveyed quarterly and the second group is surveyed monthly. Vass explained the reason for the outreach to the second group, “we are always trying to bring them more deeply into the franchise.”

Do you use your research to uncover new business opportunities?

Measuring loyalty is unquestionably important but in a difficult economy, you’ll want to go deeper. Knowing that they were in a battle for “share of wallet” among even their most loyal customers, in 2009 CDW added to its research program. Explained Vass, “we asked them what types of technologies are you interested in rolling out in the next couple of months?” Through this research, CDW identified thousands of customers interested in specific offerings that were passed onto the sales team. These leads were turned into several hundred thousand quotes and orders placed, amounting to millions in additional revenue.

Is your research department really part of the team?

One of the great byproducts of Net Promoter is that it helped bring research back into vogue, though not necessarily into every C-suite. For CDW, reviewing customer loyalty data is a top priority up and down the organization. CDW leadership reviews customer feedback quarterly, which in 2009 resulted in new customer retention initiatives. Offered Vass, “this is a priority for our Sales, Operations and Marketing departments which allows us to have a truly unified customer loyalty program.” Added Vass, “it is the overall recognition that the voice of the customer [is critical],” who sees himself as part of the customer service team versus the traditionally isolated research platoon.

Are you using research to identify problems too?

With Net Promoter, the emphasis tends to be placed on the Promoters almost at the exclusion of the Detractors. In a battle for share of wallet, he who addresses customer issues the best, wins. And oh by the way, even Promoters can have issues. To address this reality, CDW uses its research to identify and take action on negative feedback and specific problems. Calling these “hot alerts,” CDW does its best to resolve them quickly and amicably. “When we first started doing this, the customers were surprised,” explained Vass, who also noted that just resolving something as simple as a shipping problem results in higher loyalty.

Do you have a customer community to ask for guidance?

While measuring loyalty is clearly important, it can’t in and of itself increase loyalty. Building a community of customers for research, on the other hand, can do just that and much more. Knowing this, CDW has built three private communities made up of 300 small, 300 medium and 300 large business customers. In addition to asking its communities for input on advertising, product and operational issues, each community is also encouraged to talk among themselves. Reported Vass, “they can ask another member about a specific type of technology; it is a very vibrant back and forth conversation, certainly not one-way at all.” He added, “these aren’t just loyal customers but super-loyal, providing feedback other customers couldn’t.”

Final note:  This article first appeared on FastCompany.com and is currently being discussed on a Forrester Research community page.  For a bit more balance, see the video below on Why People Love Net Promoter.