Trustworthy Data


Thursday, May 9, 2013

Trustworthy data is the lifeblood of your Netpromoter program. Without such data, your program is doomed to fail. In fact it will not only fail, but it drags the motivation of your employees away as well. Employees will lose hope on all activities surrounding such program and treat it as ‘another management buzz’. 

In 2012, PEX, a process excellence company found that more than 30% of companies surveyed stated that they do nothing with the customer survey data. This is conservative as the figure could actually be much higher from our experience. We find that though companies somewhat have a customer survey program, many do nothing with the data.

Management doesn’t have confidence in most of the customer survey data. Loyalty program agenda in business meetings is a joke. Most executives play down the importance of customer survey data and its analysis. This is because although intrinsically they know that loyal customers result in higher business volume, the management often has difficulties linking them. The correlation between loyal customers (based on the survey data) and revenue is either weak or non-existent. 

However, trustworthy data does not necessarily mean accurate data. It is far from that as it is almost impossible to get a customer survey that is perfect and accurate. A customer who says that he likes a widget would not necessarily convert that liking into a purchase. Likewise, customer’s attitude does not necessarily reflect their behaviour. 

Whenever management willing to take business decisions based on a set of data, then we would call it a trustworthy data. Business decision involves making changes to status quo and that means investment. Management will only take the risk to invest on an improvement if they trust the data.  So a good gauge of trustworthy data is to observe the management’s enthusiasm in the data and their willingness to invest in improvement.

Though we always advocate that customers’ voice drives business why then the voices are not trusted? As explained earlier, when management cannot find the link between customer loyalty derived from the voices and the financial performance, management lose interest and confidence in the data.  The root cause to having such data is on how the data is captured. 

When an employees compensation is tied to customer’s feedback, he or she tend to be overly concern with such data to the extend they would ‘want’ customer to always give good feedback. This is sometimes called the gaming of survey data. It is done in various ways such as selective customers offered to fill the survey, bad survey feedback removed from database or fill up survey on behalf of customers. Such desperate acts bring down value of the customer loyalty program. 

But why does this happens? Why employees or even management take the short cut to get good rating from customers, although they know such act will not help the company? Companies tie employee bonus to customer feedback, a well intended initiative to drive positive behaviour among the employees. However, when this is done before inculcating the customer centric DNA within the organization, disaster happens. Organizations that have matured customer centric culture fair better in ensuring that the survey data is reliable and trustworthy. Enterprise Rent a Car, one of the large US car rental company is perhaps the only company known to fire its executives when customer survey data is compromised. This could be the reason why Enterprise is growing much faster than their competitor in that market. They build a customer centric culture by pitting great emphasis on voice of their customer program.

Satmetrix Inc, the co-founder of Netpromoter system defines three factors to generating reliable, relevant and trustworthy data.

Targeting the right customers

This is key, as a customer survey program should first define the sample of their customers that they would want to survey. Do they talk to customer that have done recent purchase or regular purchases; a particular age group; gender or any other customer segmentation that they would want to understand? 

Asking the right questions

A survey program needs to define its objective for what it plans to achieve. Using that objective as a guide, the company could design questionnaires that will support in measuring the objectives. Netpromoter system does not encourage long questionnaires that not only bore the respondent but also tend to result in un-reliable data. Asking simple and fewer questions help in increasing response rate and to a larger extend improve the reliability of the feedback from the respondents.

Asking at the right time

When is the most appropriate time to survey a customer? It depends on what the company wants to know from the customer. Are they interested in knowing the customer’s feedback on a recent purchase or to know the customer’s overall perception? It also helps in defining survey cycle to ensure that the target customers are invited to participate in the survey at the right time.

When a customer survey program is build by taking these factors into consideration, there is a greater chance in building trustworthy data. When done right, this could ensure a greater governance of capturing data leading to a higher confidence of the entire program from both employees and management. 

Satya Narayanan