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Is Net Promoter Really the Ultimate Question?

How CDW built a world-class customer loyalty program going way beyond Net Promoter.

CDW

For years, I’ve been counseling clients to use Net Promoter as the
metric for measuring everything from overall brand health to the success
of an event, customer satisfaction to online experiences. Undoubtedly,
the likelihood of recommending a product or service to a friend is
really important in the scheme of things but is it sufficient to make
intelligent business decisions? Can one question alone even provide a
clear picture of brand loyalty? After interviewing Calvin Vass, Senior
Manager of Research at CDW, a company that has turned research into an
insight-revealing, decision-enhancing, revenue-generating machine, my
answers to the above questions in a word, is a contrite “No!” More
importantly, my interview with Vass provides an exemplary questionnaire
for any business looking to use research to reveal and leverage the
“voice of the customer.”

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Are you asking the right questions?

At the heart of any good research inquiry, of course, is the quality
and ultimate value of the questions you ask. Over the last 11 years,
CDW’s Vass has worked diligently to refine the questions his company
asks, by listening to feedback from research professionals, his CDW
coworkers and even the customers themselves. Rather than depend on one
question, CDW’s loyalty index was modeled on a three question approach
developed by Walker
Information
and Net Promoter‘s question, invented by Fred Reichheld. The questions explore, according to Vass,
“different dimensions of the relationship; what the customer plans to
purchase with us, if they are committed and what they would do if we
went away.” Explained Vass, “Net Promoter is a one-dimensional kind of
metric; one will often get better, more consistent results by asking
more questions.”

Can you identify the questions that correlate strongest to your company’s sales?

The holy grail of any research program is to find the single
barometer that has the strongest correlation to business health. For
some companies, Net Promoter is this barometer. For CDW, it was the
combination of their Customer Loyalty Index and a highly evolved loyalty
program. Noted Vass, “we have a strong relationship between our
loyalty program and our financial performance.” Through their loyalty
research, CDW also discovered that, “Many of our customer problems are
linked to the sales team,” reported Vass. Consequently, CDW built a
system that feeds customer complaints right back to sales for prompt
resolution.

Do you segment your studies?

While Net Promoter divides customers into two camps, Promoters and
Detractors, this black and white segmentation may or may not be right
for your business. CDW elected to segment its market surveys into two
main categories, Active Customers and Less Active Customers. The first
group is surveyed quarterly amounting to over 100,000 surveys per year.
The second group is surveyed monthly with over 800,000 inquiries
fielded annually. Vass explained the reason for the outreach to the
second group, “we are always trying to bring them more deeply into the
franchise.”

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Do you use your research to uncover new business opportunities?

Measuring loyalty is unquestionably important but in a difficult
economy, you’ll want to go deeper. Knowing that they were in a battle
for “share of wallet” among even their most loyal customers, in 2009 CDW
added to its research program. Explained Vass, “we asked them what
types of technologies are you interested in rolling out in the next
couple of months?” Through this research, CDW identified 12,000
customers interested in specific offerings that were passed onto the
sales team. These leads were turned into 200,000 quotes and 108,000
orders placed, amounting to a whopping $230 million in additional
revenue.

Is your research department really part of the team?

One of the great byproducts of Net Promoter is that it helped bring
research back into vogue, though not necessarily into every C-suite.
For CDW, reviewing customer loyalty data is a top priority up and down
the organization. CDW leadership reviews customer feedback quarterly,
which in 2009 resulted in new customer retention initiatives. Offered
Vass, “this is a priority for our Sales, Operations and Marketing
departments which allows us to have a truly unified customer loyalty
program.” Added Vass, “it is the overall recognition that the voice of
the customer [is critical],” who sees himself as part of the customer
service team versus the traditionally isolated research platoon.

Are you using research to identify problems too?

With Net Promoter, the emphasis tends to be placed on the Promoters
almost at the exclusion of the Detractors. In a battle for share of
wallet, he who addresses customer issues the best, wins. And oh by the
way, even Promoters can have issues. To address this reality, CDW uses
its research to identify and take action on negative feedback and
specific problems. Calling these “hot alerts,” CDW has handled more
than 7,300 such complaints, doing its best to resolve them quickly and
amicably. “When we first started doing this, the customers were
surprised,” explained Vass, who also noted that just resolving something
as simple as a shipping problem results in higher loyalty.

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Do you have a customer community to ask for guidance?

While measuring loyalty is clearly important, it can’t in and of
itself increase loyalty. Building a community of customers for
research, on the other hand, can do just that and much more. Knowing
this, CDW has built three private communities made up of 300 small, 300
medium and 300 large business customers. In addition to asking its
communities for input on advertising, product and operational issues,
each community is also encouraged to talk among themselves. Reported
Vass, “they can ask another member about a specific type of technology;
it is a very vibrant back and forth conversation, certainly not one-way
at all.” He added, “these aren’t just loyal customers but super-loyal,
providing feedback other customers couldn’t.”

Final note: Though CDW was named a 2010 winner of Forrester
Research
‘s “Voice of the Customer Award,” they are hardly resting on
their laurels. Noted Vass, “in 2010 there was a three-fold increase in
survey of customers,” with the goal of uncovering new ways to meet
customer needs.

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About the author

Drew is the founder of Renegade, the NYC-based social media and marketing agency that helps inspired B2B and B2C clients cut through all the nonsense to deliver genuine business growth. A frequent speaker at ad industry events, Drew’s been a featured expert on ABC’s Nightline and CNBC

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