Category Archives: Marketing thru Operations

Do NPS / CES Feedback Metrics Predict Retention? Depends…

Survey Says?

Several questions came in on the ability of surveys to predict actual behavior, covered in the post Measuring the $$ Value of Customer Experience (see 2. Data with Surveys). My advice is this: if you are interested in taking action on survey results, make sure to survey specific visitors / people with known behavior if possible, then track subjects over time to see if there is a linkage between survey response and actual behavior.  You should do this at least the first time out for any new type of survey you launch.

Why?  Many times, you will find segments don’t behave as they say they will.  In fact, I have seen quite a few cases where people do the opposite of what was implied from the survey.  This happens particularly frequently with best customers – the specific people you most want to please with modifications to product or process.   So this is important stuff.

You’ve Got Data!

Turns out there’s a new academic (meaning no ax to grind) research study out addressing this area, and it’s especially interesting because the topic of study is ability of customer feedback metrics to predict customer retention.  You know, Net Promoter Score, Customer Effort Score and so forth, as well as standard customer satisfaction efforts like top-2-box.

The authors find the ability of any of one of these metrics to predict customer retention varies dramatically by industry.  In other words, you might want to verify the approach / metric you are using by tying survey response to actual retention behavior over time.

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Omni-Channel Cost Shifting

One of the great benefits customer lifecycle programs bring to the party is unearthing cross-divisional or functional profitability opportunities that otherwise would fall into the cracks between units and not be addressed.  What I think most managers in the omni-channel space may not realize (yet) is how significant many of these issues can be.

To provide some context for those purely interested in the marketing side, this idea joins quite closely to the optimizing for worst customers and sales cannibalization discussions, but is more concerned with downstream operational issues and finance.  Cost shifting scenarios will become a lot more common as omnichannel concepts pick up speed.

Shifty Sales OK, Costs Not?

Why is cost shifting important to understand?  Many corporate cultures can easily tolerate sales shifting between channels because of the view that “any sale is good”.  On the ground, this means sourcing sales accurately in an omni-channel environment requires too much effort relative to the perceived benefits to be gained.  Fair enough; some corporate cultures simply believe any sale is a good sale even if they lose money on it!

Cost shifting  tends to be a different story though, because the outcomes show up as budget variances and have to be explained.  In many ways, cost shifting is also easier to measure, because the source is typically simple to capture once the issue surfaces.  And as a cultural issue, people are used to the concept of dealing with budget variances.

Here’s a common case:

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