Perhaps it’s time to accept that traditional options for understanding customer health have been not great.
Biggest challenge with current customer health options? Your data set: customers who are willing to answer a survey. After we’ve, you know, pleaded and bribed any and all of them to complete a survey. Yeesh.
Suboptimal, isn’t it? But that’s been the model we’ve had to settle for with the options available. If you want a couple top 10 lists about why B2Bs are frustrated by NPS and the annual customer surveys, *I’ve posted those just below the better alternative.
Customer Health (and beyond!) 1st Party Data Points From All Your Customers
Desired Outcome:
- Structured data from every customer you engage with, real-time
- Segmented by firmographics
- Cross-referenced against relevant company data (size of account, member lives, current services)
- Easily cover customer perspective on what you’re providing today; what you may provide in the future
- BONUS: capture customer health and trends + easy to follow trendlines across the business.
Via:
- Short set of curated, structured questions, built into existing 1:1 customer interactions
- For a set period of time (a month or a quarter)
- Change topics by period
There is no reason why we can’t be capturing structured data from every Success interaction with a customer. A few questions for everyone interacting with a customer, captured instantly, and populating a real-time dashboard.
You can modify the questions by month or quarter.
Compounding Goodness
From implementing this one program (low cost, light lift), a ton of value unfolds:
- Ongoing, deeper intel on the customers you want more of, and those you might deprioritise
- Structure already in place to quickly test new ideas – 30 days from idea to brilliant data set
- With similar categories in Sales, Marketing, + this data set, propensity modelling can be roubust
- Content & insights for marketing
- Insight for sales plays
- Intel for sales to go deeper on expand
- Clean, happy data. Nothing extraneous just pure, useful data
- No data admins necessary
When this much clean, current, trustworthy 1st party data is possible with a light lift and compounding lower cost, tell me again why anyone would want to do NPS or Annual Surveys?
(if you need support, just ping Maureen maureen@project1-51otye0gev.live-website.com)
*Current perspective on downsides to surveys
NPS
Several studies and industry analyses have highlighted reasons why companies are becoming dissatisfied with Net Promoter Score (NPS). Here are the key findings:
- Lack of correlation with growth: Multiple studies summarized by MeasuringU found weak correlation (r=0.35) between NPS and company growth. NPS appears to be a better trailing indicator than a predictor of future growth.
- Backward-looking metric: NPS is criticized for being a backward-looking “point in time” metric that doesn’t capture the sophisticated tools companies now have for continuous improvement.
- Disconnection from financial metrics: NPS isn’t directly tied to upsells, churn, or revenue, making it less relevant for business performance evaluation.
- Potential for manipulation: Some firms have turned NPS into vanity statistics, manipulating scores through pleading, bribery, or selective surveying, which damages its credibility.
- Oversimplification: NPS is often criticized for being overly simplistic and providing only a surface-level understanding of customer satisfaction.
- Planned abandonment: A Gartner study published in 2021 found that around 75% of companies plan to abandon NPS as a measurement of customer service and support by 2025.
- Misclassification of customers: A study revealed that NPS often misclassifies B2B customers. While NPS categorized 16% of consumers as detractors, only 4% had actually discouraged others from using the brand. In fact, detractors were seven times more likely to have either recommended a brand or said nothing at all than to have disparaged it5.
- Lack of nuance: NPS fails to capture the complexity of B2B relationships. A customer might give a low score due to a specific issue but still recommend the company for other reasons, which NPS doesn’t reflect.
- Unreliability as a single metric: A study by the Cambridge Service Alliance highlighted the unreliability of NPS as a single loyalty measure within B2B complex service organizations.
- Insufficient visibility: According to Accenture, only 28% of B2B leaders had influence over their customer experience, indicating that NPS might not provide actionable insights for improvement.
- Fluctuation and volatility: NPS scores can fluctuate wildly, especially with smaller sample sizes common in B2B settings. This volatility can lead to frequent, potentially unnecessary changes in company priorities.
- Lack of context: NPS doesn’t offer explanations for low scores or identify root causes of issues, making it difficult for B2B companies to implement targeted improvements.
A couple additional sources:
https://www.strategy-business.com/blog/Why-Net-Promoter-Score-is-past-its-prime
https://hbr.org/2021/11/net-promoter-3-0
https://hbr.org/2019/10/where-net-promoter-score-goes-wrong
Annual Customer Sat Surveys
Several studies have highlighted reasons why B2B companies are becoming dissatisfied with traditional annual customer satisfaction studies:
- Lack of timely insights: Annual surveys fail to capture real-time customer sentiments, limiting companies’ ability to respond swiftly to market changes. Only 21% of companies time feedback requests to specific points in the relationship cycle, such as months before a renewal deadline.
- Incomplete stakeholder feedback: Less than half (45%) of B2B companies request feedback from end users of their products or services, creating a crucial gap in understanding the full customer experience.
- Insufficient actionable data: Traditional surveys often fail to provide detailed feedback necessary for companies to create effective action plans. For example, only 66% of companies inquire about how prospective clients gather information to make purchasing decisions.
- Masking underlying issues: Simplistic numerical ratings used in many traditional surveys can mask unhappy customers. Research found that up to 42% of customers who gave high ratings were actually unhappy with one or more aspects of the company’s products or services.
- Failure to capture non-complainers: A significant minority of customers do not complain but spread negative word-of-mouth. In one study, 20% of manufacturing and distribution companies did not complain about their most serious problem, despite having a Net Promoter Score of –53.
- Lack of granularity: Traditional surveys often focus on broad experiences rather than specific problems, missing crucial details that could inform improvements.
- Inadequate response to feedback: Even when feedback is collected, many B2B companies lack clear policies and procedures for acting on it, leading to customer dissatisfaction.
These findings suggest that B2B companies are recognizing the limitations of traditional annual customer satisfaction surveys and are seeking more dynamic, comprehensive, and actionable methods to understand and improve customer experiences.
