Customer: Show Me the Money

It was a line made famous by actor Cuba Gooding in the hit movie Jerry McGuire.  It is a plea for results, not promises; performance, not intentions. And it reminds me of some of my client companies that rely on the popular Net Promoter Score as their single proof of service excellence.

Now, don't get me wrong.  I have great admiration for the way the NPS lead the C suite to focus on customers and service instead of only drilling down on this quarter's financial balance sheet.  But, unfortunately it enticed some leaders, seeking to simplify the customers complex relationship with their organization, to rely on a single question to gauge customer affinity.  It became the search for an answer to an ultimate question, somewhat like, "I promise that someday I will marry you."

We all know customers demonstrate their loyalty in a variety of ways.  Loyal customers buy again, buy more, trust more, and provide a wider berth for mistakes.  Some identify so much with a brand they proudly wear it.  Their Bass Pro Shops caps or Harley-Davidson jackets attest to their allegiance.  The NPS does remind us that the highest level of customer fidelity is their eagerness to be advocates.  The NPS does not seek to learn about performance, only intention.  It is a good start. But, the real test of customer advocacy is their actual words of recommendation or their amorous stories that start with phrases like "You're not going to believe what happened to me."

I like Cuba's line.  Promises don't build trust; performance does.  Intentions are not the stuff that drive the bottom line, actions are.  The politician asks, "Will you vote for me?" and the citizen, excited by the campaign, says "yes."  But, promises made at a political rally are not the ultimate test of political support, only votes cast behind the curtain.  Basing evaluations and scorekeeping on how many customers promise to come back to your store is foolhardy as a gauge when the metric that matters is how many crosses your threshold again.

We were working with a major bank in Central America.  They had for years used as their key metric in the customer service arena, a survey question giving customers a chance to register their "overall customer satisfaction." They believed that if customers were satisfied---meaning their needs and expectations were met—they were very likely to be loyal.  They were happy 80% of their customers indicated they were satisfied with their experience and the bank worked to get that percentage higher.  Yet, the stark reality is that about 75% of customers who leave an organization to go with a competitor report they were satisfied with the one they abandoned.  It seems satisfaction is not worth much.

They then switched to the Net Promoter Score as their new metric--a survey question that sought to learn how many customers indicated they were promoters—meaning they would recommend the bank to a friend or colleague.  And, they were thrilled that about 80% of their customers were classified as "promoters" and the bank worked to get that percentage even higher.

That is the point when we came on the scene.  We started a conversation about the demonstration of loyalty—a "show me the money" discussion.  Do you want to improve satisfaction or do you want to improve the bottom line?  Do you want intent to recommend or do you want customers actually to recommend you?  When we encouraged them to add a question:  Have you recommended our bank to a friend or colleague, 80% dropped to less than 55%.  It was an eye-opener on what really matters—performance, not intention.

Seeking a cause and effect metric is tough in the qualitative world of customer experience.  There is so much subjective, eye-of-the-beholder built into the assessment.  There are so many variables that make up the anatomy of affection it is challenging to sort out what actually caused what.  So, we reach for correlation measures coupled with a lot of hope.  We hope that if they say they would recommend us, they actually do.  We hope that if they say they found their experience "wonderful" (or the "researchy" phrase—completely satisfied), they will demonstrate that evaluation by positively impacting our bottom line.

In the end, no single metric can adequately capture what we need to know to have a high level of confidence that customers will "show you the money."  Lifetime value, the share of wallet, the degree of effort, recency, retention, spend per transaction are all useful in ascertaining how customers evaluate the experiences and translate it into the performance that matters to the success of the enterprise.  Like, love, customer devotion will fortunately retain a bit of mystery hopefully leading us to never take it for granted.