Achieving Business Excellence with John Spence

The Single Most Important Indicator of Business Success

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I just received a wonderful note from my friend Miguel da Rocha Cavalcanti in Rio de Janeiro asking me what I felt was the single most important indicator of business success.  My reply was quite simple: customer satisfaction.  If you have highly engaged, satisfied and loyal customers — then an awful lot of the other things in your business must already be going very well  (of course, cash flow is pretty darn important too — even if your customers love you, if you run out of money you will be run out of business – but lots of cash flow is not necessarily an indicator of sustainable business success!). 

Miguel also asked me what I felt about the Net Promoter Score (NPS) process for tracking customer loyalty. I told him I thought was a very useful, elegant and straightforward metric/discipline for using customer feedback to fuel profitable growth in a business — but should always be supported with, as my buddy from Vienna, Stefan Gubi, likes to say, “four eyes” meetings with your top customers. Nothing in the world can replace sitting across the table from  your customer to truly gauge their level of satisfaction, loyalty and commitment to your products and services.

As Mark Twain once said, “The only critic whose opinion counts is the customer.”  It does not matter what you, or I, or your employees think is “great customer service.” The only person who can make that determination is your customer.  And the only way to find out what your customers want is to ask them, listen to them and do everything you can to own the “Voice Of the Customer.”  Through surveys, customer panels, focus groups, help lines, expert users’ groups, new users’ groups, discussion boards, blogs, special events, trade shows, open houses, visiting customer locations, taking key customers to lunch… and 100 more ways, it is essential that you spend the time, energy and money necessary to find out as much as you can about the likes and dislikes of your customers and precisely how they define great customer service.

How you go about collecting this information can be as complex or simple as you like.  The NPS school of thought says that asking a single question such as: “How likely are you to recommend our products and services to your family and friends?” can yield some very valuable data.  Some organizations do formal annual customer surveys, others ask customers to fill out a brief reply card at the time of purchase, while other organizations have extremely intensive customer relationship management (CRM) systems that slice and dice customer data to determine even the most nuanced preferences, but the truth is that the great majority of businesses do absolutely nothing!

It is shocking to me how little most organizations know about the people who pay their bills.  I mean, please try to help me understand who is more important to your business than your customers?  Without customers you have nothing.  You can have stunning buildings, amazing products, and highly talented people… but if you don’t have engaged and loyal customers there is no way to sustain a successful business.  It is very clear, at least to me, that whoever understands the customer better  than their competition and then uses that information to deliver superior service and build strong trusting relationships, will enjoy the most success.

My question to you: what are the top 10 things you can think of, off of the top of your head, that your company is doing to truly own the Voice Of the Customer?  What programs, systems, surveys and processes do you have in place right now  to assist you in forming strong, trusting, loyal relationships with your most important customers?

If you can’t answer that  question very quickly, with 10 really solid examples, you likely have some work to do.

I hope this helped — I wish you every possible success in 2009 — take good care — John

PS — If you have not watched my video on the Six Key Factors for Business Success in 2009click here — and please pass along the link to anyone you feel would benefit from the ideas I share. Thanks so much – John

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Comments

  1. John,

    You make things so awesomely simple. There is no other answer to this question.

  2. I am consulting with a company regarding eCommerce. Can you refer me to a place (I tried NPS without success) where I can find some statistics on how using a call center service boosted business and customer service? Thanks for your cutting-edge information.

  3. Dear John,

    again your post is to the point!

    I have been using NPS for years. It is an easy and effective way to gather information and trends about customer satisfaction. And you get amazing response rates. But it is difficult to understand the reasons behind the trends without deeper customer interaction.

    Personally I measure customer satisfaction based on the number of downloads of my presentations, and number of comments on my blog. I am my only customer, thus my satsifaction is easy to measure – but extremely important to be measured, as you said.

    I have to say that I am pretty amazed and satisfied by the fact that >15% of the viewers have downloaded the presentation I made for you last spring
    http://www.slideshare.net/mgrtbx/achieving-business-excellence

    And >15% of the viewers of my Really Simple BSC have downloaded that one also
    http://www.slideshare.net/mgrtbx/really-simple-balanced-scorecard
    (You can jump to slide 68 to see my measures of customer satisfaction)

    Your question about “10 things, that our company is doing to truly own the Voice Of the Customer”, is a good one. I will initiate some internal discussion around that rather than announcing them publicly.

    Greetings from rainy Tokyo

  4. You can disregard my question above – I found a great article at econsultancy.com in case anyone else is asking questions relating to eCommerce sites. http://econsultancy.com/blog/2607-to-phone-or-not-to-phone

  5. Desmond says:

    John,

    Is good to hear from you again. I believed whenever we talk about NPS. Two books must not be left out in our reference.

    1. The Ultimate Question – Fred Reicheld
    2. Answering The Ultima Question – Richard Owen, Laura Brooks

    I’m pretty sure you have these copies in your hand- in case your client or potential clients want to know what all about.

    It is the ultimate tool that will tell us business will stay on short term, medium term or long term and is very common sense thingy…..

    Regards,
    Desmond

  6. I agree wholeheartedly, and it’s nice to know that customer satisfaction is still to be the focus of the web world….I think one of the main ways you can today ensure customers coming back is by creating a user interface on your site that is easy and good looking (something like the parenting site gurgle which is very user friendly and targets its audience well), and allowing customer participation through forums and social networking. There’s my two penneth!

  7. Customer satisfaction is surely the key indicator of business success. If the customer of a business process is not satisfied enough to return for that repeat purchase or does not agree to serve as a good reference, then the business has failed to succeed in the real sense. Doing business in a way where excellence gets measured in terms of customer satisfaction is probably a right approach.

    One of the ways businesses can ensure this is by focusing on business excellence at all times. Do check out the following blog where I have tried to capture some of these thoughts and ideas:
    About Doing Business, Business Excellence