Why companies need to change how they ask
Companies spend billions of dollars every year on customer satisfaction surveys. Obtaining honest feedback from customers is a laudable goal, but here’s the problem: What gets measured gets done. And companies are measuring the wrong thing. The best predictor of top-line growth isn’t how satisfied your customers are with your service; it’s whether they would recommend your company to someone else.
Customer recommendations are the Holy Grail of marketing.
Our hypothesis is that customer recommendation rate can predict a company’s top-line growth and explain why some companies maintain their market leadership for decades.
You’d think that if you asked people how satisfied they are with a product or service, you’d at least get some insight into the likelihood that they’ll buy from you again.
The best predictor of top-line growth can usually be captured in a single survey question: Would you recommend this company to a friend?
This question doesn’t tell you how satisfied customers are, or how much they like a particular product. It doesn’t even directly tell you whether customers liked a particular transaction. The question is about the relationship: Is this organization worthy of my trust? Does this organization deserve my loyalty? Will I stand behind this organization, and speak well of it to others?
When you ask customers if they would recommend your company to a friend, it goes beyond trusting your capabilities or not; you’re measuring their willingness to go out on a limb for you and describe why others should purchase from you as well. CX professionals often define this metric as Net Promoter Score (NPS) or Customer Satisfaction Score (CSAT), but the question remains the same.
A growing number of companies are using Net Promoter as a single source for tracking and driving top-line growth. By putting Net Promoter at the heart of their strategy, companies that have tested this approach have grown revenues between 10 percent and 15 percent more quickly than their competitors.