The title of this article has been the National Comfort Institute’s (NCI) mantra for well over a decade. It’s what the organization has stood for, and has taught for the past 20 years. But measuring goes far beyond taking technical readings like static pressures or temperatures. We must also use good methods to measure how our businesses are performing so we can continuously improve and grow.
Business performance includes every area of your company, from how productively you’re performing service and installation work, to how your sales and marketing investments are paying off — and everything in between. One of the most important indicators of your company’s performance is how well you are doing in your customers’ eyes.
The simplest, most direct way to discover customers’ perceptions of you and whether they’d use your company again or recommend it to others, is to just ask them.
Sure you can have third parties contact your customers, and perform customer satisfaction surveys and analysis. There’s a lot of validity to these methods, but you can also get a significant amount of valuable feedback by performing some of your own basic surveys and analysis.
Customer feedback can be obtained in a number of ways, from telephone surveys to customer feedback cards, but you have to be careful not to make it too cumbersome for your customers, or too difficult for your staff to record and track.
What if you could get some solid performance input from your customers with a one-question survey?
Net Promoter Score
One such process is called the Net Promoter Score (NPS) approach. NPS is a method that starts with asking your customers one simple question
“On a scale of 0 to 10 (with 10 being Extremely Likely) how likely are you to recommend us to a friend or family member?”
According to NPS creator, Frederick F. Reichheld, you simply divide your customers into three categories based on their response to this simple question:
- Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others, fueling future growth.
- Passives (score 7-8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
- Detractors (score 0-6) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.
The next step is to calculate your NPS by subtracting your percentage of Detractors from your percentage of Promoters. (A positive score of 50 is considered excellent!).
While NPS is just one of many methods that can be used to determine customer loyalty, it’s pretty simple and can provide you with some fairly immediate feedback. Some of this method’s detractors say it’s too simplistic and doesn’t give the statistical accuracy that other, more-proven “scientific methods” can provide, but I believe the direct practical feedback can far exceed the value of higher accuracy.
It’s a little like taking measurements on a real live home versus the statistical repeatability of a “design” model to determine energy savings. While the modeled approach is easier, it often misses the true performance picture you only get when you measure one house, one HVAC system at a time.
There is also a value in direct measurement of customer satisfaction, without the filters of heavy statistical analysis by third parties. By the way, the Net Promoter Score is just a first step in implementing the NPS model, which includes the process to actually improve your customer loyalty and your company’s performance.
While this editorial is not meant to be a full instructional article on how to use NPS, and all the steps in the process, I hope it has raised your interest in using this type of structured customer satisfaction approach.
Here are some links to more information on the NPS process, including Net Promoter’s direct website, and a link to a software site that has great articles on the process and how to make it relatively painless:
Whatever method you’re using or choose to use, you need good feedback mechanisms that allow you to measure your performance in your customers’ eyes, and implement effective processes and tools to continuously improve it.
Dominick Guarino is CEO of National Comfort Institute (NCI), a Performance-Based training, certification, and membership organization, focused on helping contractors grow and become more profitable. His email is [email protected]. For more info on performance-based contracting, go to WhyPBC.com or call NCI at 800/633-7058.