Most companies find out about their successes or failures these days by way of Twitter or TikTok postings. And while these are certainly worth paying attention to, they are hardly definitive regarding the health of a business. In truth, they are more nuisance than measure as to the state of the enterprise. Sure, there is danger as well as opportunity in a post from PrettyGirl379 that laments why a tube of lipstick is dry, or one from BornToParty29 that the heel of her stiletto broke off. But using those as a guide to plot a long-term business strategy is a fool's errand.
That's because as catchy as viral public anecdotal feedback can be, executives require hard data on which to base their decisions. To do that they use all kinds of metrics to measure how well they are doing. In the past it used to be that physical tallies were all that mattered. Called O-data, or operational data, these were based on a particular unit of measure: units shipped, calls made, traffic through the door. Each of those helped to quantify whether a firm was going up, down or sideways.
However, those don't report on what are perhaps the most important metrics, the ones which drives those underlying numbers: the customer's view of a company. That accounting falls under what is referred to as X-data, or experience data. It fills in the gap between "what is happening" and "why is it happening."
There are multiple measures in this bucket as well. For instance, the CSAT or Customer Satisfaction Score, measures how satisfied customers are with an organization's products and/or services. There's the CES or Customer Effort Score, which tallies how much elbow grease a customer has to put in to buy a product or resolve an issue. But perhaps no score is as prized as the one that charts how a customer views a company, and indeed how they talk about it to their friends and family. Talk it up, and business is likely to grow. Talk it down, and the future isn't so rosy. That's the idea behind the Net Promoter Score, or NPS.
In practice, the math is pretty simple. Customers are surveyed on one single question. They are asked to rate on an 11-point scale the likelihood of recommending the company or brand: "On a scale of 0 to 10, how likely are you to recommend this company's product or service to a friend or a colleague?" Based on their rating, customers are then classified in 3 categories: detractors (less than 6), passives (7 or 8) and promoters (9 or 10). NPS is determined by subtracting the percentage of customers who are detractors from the percentage who are promoters. If all of the customers gave a score of 6 or less than the NPS would be -100. If all said 9 or 10, then the Net Promoter Score would be 100.
The challenge for companies is it takes so little to change that score. One bad customer service experience, and down the scale they slide. We have all tried to sort out a bad charge or make a return, and the call or chat went from cordial to all caps. Odds are you dished about it with your girlfriend or office mate, and given a choice the next time around clicked over to a different outlet.
Take two of my recent experiences. I tried to add an international plan to my mobile phone for an overseas trip, and what should have been a 5 minute point and click turned into a 40 minute online chat, including an attempt to sell me more products. On the other hand, a problem with an online parking app resulted in an "We're sorry" and a $10 credit in less than 5 minutes. Had I been surveyed, the first experience started at a 9, went to a 7, and slid to a 5. The second started at an 8, then jumped to a 10.
Yes, it's brutal, but that's how I scored it, and I wasn't even the Russian judge. In the first case Verizon has the advantage of being such a dominant player that switching ain't so easy. But they gave me an opening and a reason to at least keep my eyes open for an alternative. T-Mobile? AT&T? Not just yet, but give it time.
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Marc Wollin of Bedford hates taking surveys. His column appears regularly in The Record-Review, The Scarsdale Inquirer and online at http://www.glancingaskance.blogspot.com/, as well as via Facebook, LinkedIn and Twitter.
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