Most Customer Satisfaction Surveys Aren’t Useful.

There is a Harvard Business Review article entitled “The One Number You Need to Grow”. In it, the HBR teases us with the following nugget: “If growth is what you’re after, you won’t learn much from complex measurements of customer satisfaction or retention. You simply need to know what your customers tell their friends about you.”

The article’s author Frederick Reichheld tells the tale of a group of Fortune 500 executives at a customer service symposium swapping stories on what revs their customers’ engines and generates successful consumer loyalty. But CEO’s from high-profile brands like State Farm Insurance, Chick-a-Fil, Vanguard and others really pricked their ears up during a talk from Andy Taylor, the CEO of Enterprise Rent-a-Car, a talk that Reichheld describes as “riveting”.

According to Reichheld, Taylor and his senior team had figured out a way to measure and manage customer loyalty without the complexity of traditional customer surveys.

Every month, Enterprise polled its customers using just two simple questions: one about the quality of their rental experience and another about the likelihood of whether the customer would rent from Enterprise again.

Because the process was so simple, it was fast. That allowed the company to publish ranked results for its 5,000 U.S. branches within days., thus giving the offices real-time feedback on how they were doing and the opportunity to learn from successful peers. The survey differed in another way, Reichheld said. In ranking the branches, Enterprise counted only the customers who gave the experience the highest possible rating.

That narrow focus on enthusiastic customers surprised the CEOs in the room. Hands shot up. What about the rest of Enterprise’s customers?, the marginally satisfied who continued to rent from Enterprise and were necessary to its business? Wouldn’t it be better to track, in a more sophisticated way, mean or medium statistics?

No, Taylor said. By concentrating solely on those most enthusiastic about their rental experiences, the company could focus on a key driver of profitable growth: customers who not only return to rent again but who also recommend Enterprise to their friends. Reichheld’s point, made via the Enterprise story, is that customer satisfaction surveys aren’t at all useful. They’re complicated and off-putting to customers, who invariably hate filling out all those long forms. Consequently, they produce low return yields and little useful information for executives to act upon.

In two years of research on the subject of customer satisfaction versus customer experience, Reichheld concludes that linking customer satisfaction surveys to actual customer behavior, using as little as a single survey questions, was highly related to company financial growth.

The Enterprise question – “would you recommend us to your friends?” – was the strongest sign of customer loyalty, he reports. “But evangelistic customer loyalty is clearly one of the most important drivers of growth,” writes Reichheld. “While it does not guarantee growth, in general profitable growth cannot be achieved without it.”

What Reichheld is really talking about is loyalty – i.e. the willingness of someone – a customer, an employee, or a friend – to make an investment or personal sacrifice in order to strengthen a relationship. And trying to measure loyalty through customer retention exercises or complicated customer satisfaction surveys simply does not work. As Reichheld points out, there is no demonstrable connection to actual customer behavior and growth. Figuring out a way to accurately measure customer loyalty is really the name of the game.

And that’s where mystery shopping comes in. A good, reliable mystery shopping program can extend into all facets of your business, providing a solid analysis of your company’s best practices and reliable data on which you can continually build customer loyalty – and your company’s growth in the process.