The First 10 Metrics - Part III

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The First 10 Metrics – Part II
Where Intelligent Marketing Begins

In the last lecture, we started
looking at the metrics that drive our
marketing successes…

We learned about the modern
purchasing funnel and why it fits today’s
marketing scenario better than the
original

Then we started talking about the first
three metrics – brand awareness, brand
equity and the “test drive” – and how
each effects our marketing

If you weren’t missed the previous
lecture, please download and review it

Metric 4 – Customer Satisfaction
Customer Satisfaction Measured by Asking

CSAT is not the same as awareness
and is more closely related to loyalty
– loyalty feeds awareness in the
behavioral impact model

Brands have established customer
bases and these customers have
experiences with the
product/service that defines their
perception of the brand

For example, a major automaker
measured CSAT and brand purchase
intent finding a one-to-one
connection between CSAT and
repurchase intention

They found that customers who had
problems with their car was more
satisfied and had a higher
repurchase intent than those who
did not have any problems at all.

Why?

Excellent customer service if there
was a problem with the new car
measurably changed perception
positively toward the brand

Therefore, CSAT is the “golden”
marketing metric that bridges both
loyalty and brand awareness – and
can be used as a leading indicator of
future sales

So how do we measure it?

On a scale of 1 to 10, would you
recommend this product/service to
a friend or colleague?

In a CSAT environment, only the
people who answer 9 or 10 matter,
everyone doesn’t

So here is my question to you –
What product or service would you
recommend to a friend?

“Would you recommend to a
friend?” is the essential question to
define satisfied customers

But does that matter to us – how
many people would recommend us?

Fred Reichheld used this question to
define another essential marketing
metric known as –
The Net Promoter Score

The Net Promoter Score is a better
metric than the CSAT because it is
more accurate

To get the Net Promoter Score – we
subtract the average number of
detractors (score 0 – 6) from the
number of promoters (9 – 10).

The difference is one word in the
question – recommend becomes
satisfied

Why is this a better metric?

For actionable metrics, it is better to
ask a few simple questions that
focus the consumer’s attention

Let me give you a
couple of examples

A major waste management
company in the United States used
to call up customers and ask a series
of survey questions

These questions started with
discussions about customer garbage,
pickups, cleanliness of the garbage
trucks, friendliness of the workers
and ended with a question about
satisfaction

Not surprisingly, the detailed
discussions made the customers
neutral (5 – 7) in terms of
satisfaction

Had they started with the question –
“How satisfied are you with your
waste management?” – the
satisfaction numbers would be much
higher

DSW is a $1.4 billion discounted
brand-name footwear retailer that
focuses primarily on women, but
also sells men’s shows

DSW offers more than 2,000 styles
of dress, casual, and athletic shoes,
and in addition sell handbags,
hosiery, and accessories. DSW
operates 300 stores in more than 35
states and also sells online

They are opening stores at a pace of
10 per year through 2010, and also
operates more than 375 leased
departments inside stores operated
by other retailers

When DSW decided to measure
their CSAT, they asked some
interesting survey questions

How likely would you be to
recommend..
All things considered, how satisfied..

Then they checked future spending

Thinking about the past 4 months,
approximately how much have you
spent on shoes for yourself at DSW
and other stores?

Now, thinking about the next 4
months, approximately how much
do you plan to spend on shoes for
yourself at DSW and other stores?

To the first question – 37% of DWS
customers said they would highly
recommend, while 45% said that
they would recommend

Why such high levels
of satisfaction?

DSW has an award—winning
rewards program which is offered
free to all store and online shoppers.
Customers build up points to get
reward certificates giving them
discounts on purchases.

The DSW award program has a 68%
satisfaction rate

More importantly, when customers
were asked about future shopping,
these same shoppers anticipated
increasing their spending at DSW
over the next 4 months

The ultimate for a marketer is when
your customers are so excited about
your products/services that they
recommend to friends or colleagues

Customer evangelists and fans
demonstrate their emotional
connection to your brand, so they
become the marketing department
– everywhere! Their passion adds
authenticity!

A customer’s recommendation is the
best compliment your customer can
ever give your brand

But customer satisfaction is a
double-edged sword – ask this
question instead

What product/service would
you not recommend to a friend?

This question can elicit a strong
response – simple maintenance
issues, incorrect billing, and terrible
customer service

When people talk more about bad
experiences – customer satisfaction
declines decreasing future sales and
damaging the brand

We call this metric the golden
marketing metric because it links
brand and loyalty in the behavioral
impact model

What do we learn?

CSAT is a leading indicator of future
sales and is measured through a
simple question. By adding related
questions, we can also judge future
purchasing intent

You have to manage CSAT as actively as
you do sales revenue to have a
successful brand and company

The First 10 Metrics - Part III

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