Fred Reichheld argues in his book, The Ultimate Question, that companies profit when they delight their customers so much that they are both willing to return and to recommend the companies. I believe that this philosophy has been true since the beginning of time, and there is no doubt in my mind that it is critical to the success of our business.
We operate a CRM consulting firm, enabling midsize and Fortune 1,000 companies to successfully implement salesforce.com, an on-demand CRM application. Increased demand for on-demand CRM has resulted in the doubling of our staff in the past 12 months alone. We continue to add clients and team members at a rapid rate. But with growth comes the need to be proactively aware of what has made us successful, which I believe is the customer experience we've created, along with customer satisfaction.
Part of this challenge is defining the right metrics and then having a customer-friendly approach to capture the inputs needed to measure it. Deploying a survey strategy was natural in our case, because we practice what we sell. Our company takes advantage of every opportunity to leverage CRM to facilitate and monitor all of our key processes and procedures. Now we're using CRM to support Reichheld's directives.
‘Almost any company can benefit from knowing this information about its existing customers.’
Once we've completed a client project, we send an email to the client's project leader or key stakeholder inviting the person to take a web survey. We ask people to rate on a scale of 0 to 10 Reichheld's "Ultimate Question": the quality of service received, the likelihood that they would work with us again and the likelihood that they would refer us to a colleague.
We set up workflow automation to notify our survey manager when a response is received, at which point the survey data is quickly augmented with the project leader, project type and project size, saving the client from having to provide this information. Results captured drive a robust survey dashboard of graphical analysis, including an average score for each question, each project manager and each type of project. We send out surveys quarterly, so we also have a bar chart by quarter of the overall average score for the time period.
Granular feedback
One key benefit that comes from these surveys is the knowledge of how we did and where we stand with each client. Although Reichheld's three questions and one comment may not seem substantial enough to glean any workable information, I have found that the feedback is actionable, enabling us to address issues and take advantage of opportunities. For example, if a client submits a rating lower than our benchmark, we call that company to open a dialogue on what we could have done better.
We initially became interested in satisfaction surveys because salesforce.com's customer surveys ranked our company one of the highest of any of their partners worldwide. We knew satisfaction was powerful and wanted to have control of this knowledge internally. In the past three quarters, since we began issuing customer surveys, our overall rating has been high but flat. Almost every one of our clients does multiple projects with us (customer loyalty); about 41 percent of our revenue is related to referrals; and we have had near triple-digit revenue growth four years running before the surveys. So we cannot attribute a percentage increase in customer loyalty related to Reichheld's methodology—yet. But that's not why we began surveying our customers. We weren't looking to solve a problem.
Instead, with a 72 percent response rate from the surveys, we can use the data to help us identify potential issues and proactively address them before they affect customer loyalty. Our overall average rating is 8.8 out of 10. While analysis does not prove a direct relationship between overall quality rating and a willingness to be a reference, the high response rate provides us with a ready reference list. And we are now considering offering a companywide bonus tied to customer satisfaction ratings.
We tie the survey back to individual project managers, so we can track problems back. Positive feedback is critical, too, in pursuing additional work from existing clients. In one case it provided us with insight and confidence to pursue and win an international project from a domestic client that, we discovered, hadn't realized we did overseas work. The client had given us top marks and very positive survey feedback on its domestic project. The international project doubled our revenue from the client.
Reichheld has truly inspired our organization to actively follow a plan for creating customers who are so delighted that they become promoters of our business. It seems that any company that does not believe in the value of knowing a customer's willingness to do business with it again is focused on the wrong things: short-term profits at the risk of long-term value creation and success. Arguing that other methodologies and survey questions might better serve a business misses the point. Over time I look forward to reporting on more detailed positive results to Reichheld's clear, simple, and easy to implement approach.