March 12, 2008
Case Study

How to Score Customer Loyalty: 7 Steps to Double Satisfaction Rating

SUMMARY: B-to-B marketers need to not only generate the leads that will turn into new customers, but also retain the customers they've already landed. The key is knowing which customers are happy ... and which need a little more attention.

See how a marketer created an online survey and telemarketing strategy built on a scoring system. The strategy has added a new tool to its customer-retention effort while doubling their loyalty "score."
Diane Shelgren, Executive VP, Strategy and Client Development, Veritude, knows that keeping customers happy leads to contract renewals. The firm spent years building up a strong customer base for its outsourced staffing and hiring services.

Shelgren wanted to add to her team’s collection of customer-retention tools. “We position ourselves in the marketplace as being a quality provider of services. It’s very important to know that we’re delivering for clients what we promised them.”

They decided that a formal feedback system was needed to take the pulse of their customers. They wanted a mechanism that would highlight potential problem areas needing immediate attention and one that outlined new strategies to improve service delivery and marketing and sales efforts.

Shelgren and her team, including Melissa Mader, Director, Customer Loyalty, created a customer-survey program based on the Net Promoter scoring system.

The technique provides a loyalty “score” by asking clients to rate how likely they would be to recommend a company’s products or services to colleagues. The program provides a basic methodology and guidelines while allowing companies to adapt it for their own customer-retention efforts.

Shelgren’s team incorporated the program into a campaign that used online surveys and telemarketing follow-up to solicit positive and negative feedback about Veritude’s services. The campaign helped them target new customer-retention efforts. Here are the 7 steps they took:

-> Step #1. Create online survey

Net Promoter is built on one question similar to this one: “How likely is it that you would recommend us to a friend or colleague?” Respondents provide a rank on a scale of 0-10, with 10 being the highest.

Veritude’s online survey asked three questions to solicit feedback:

- A variation on the basic Net Promoter question, “If a friend or colleague asked you for a referral, how likely is it that you would recommend Veritude as a provider of staffing and other talent management services?”

- For respondents who provided a rank of 9 or higher, the survey asked, “What does Veritude do particularly well to earn your recommendation?”

- For respondents who provided a rank of 8 or lower, the survey asked, “What would Veritude need to do to earn a better recommendation?”

“The shorter the survey, the better off you are,” says Mader.

-> Step #2. Email survey invitation

All of the key contacts within each Veritude customer were sent an email inviting them to complete the online survey.

Client contacts came from the company’s database, including:
o Hiring managers
o Corporate decision makers
o Other relevant client contacts

Client contacts were told that the process gave them a chance to describe their experience working with Veritude and offer advice on how the company could improve its services. They set a goal to survey all clients twice a year -- typically in the second and fourth quarters.

-> Step #3. Target non-responders

15 days after sending out initial survey invitations, Mader’s team sent a reminder email to clients who had not answered the survey.

One week after that reminder email, the team called clients who still had not responded. A telephone representative invited them again to fill out the online survey, or offered to collect their answers immediately over the phone.

“We found that some people respond better to a phone survey, rather than an Internet survey," says Mader.

-> Step #4. Compile survey scores

Mader’s team first calculated their “score” based on the Net Promoter question. The scale:
o Scores of 9-10 are labeled “promoters”
o Scores of 7-8 are labeled “passive”
o Scores of 0-6 are labeled “detractors”

Scores were compiled for individual customers, as well as tracked across all customer responses to determine the company’s overall score. A score is calculated by subtracting the percentage of detractors from the percentage of promoters.

-> Step #5. Follow-up interviews

While calculating the scores, Mader’s team flagged all survey responses that included a negative comment to the question: “What would Veritude need to do to earn a better recommendation?”

Mader’s team examined the nature of the negative feedback to determine the right member of the company’s leadership team to conduct a follow-up interview. They dug deeper into the problem.

For example:

- If the negative feedback related to a broad Veritude practice or policy, the follow-up call might be assigned to an executive VP Strategy.

- If the negative comment related to a specific customer experience, the interview might be assigned to a leader of that site’s services team.

Each client contact making a negative comment received a follow-up call. Managers assigned to follow up with specific clients used a feedback form that included questions to help them conduct the interviews and places to record customer responses. Team members were instructed to complete all follow-up interviews within 10 days.

NOTE: The team also made follow-up calls to a random sampling of customers giving positive feedback. But this process was less formal; they just wanted to collect more details on specific areas the company does well.

-> Step #6. Analyze results

After the follow-up interviews, Mader’s team analyzed the feedback forms to find specific causes for dissatisfaction.

Their goals:
o Determine if the cause of problems was strategic or operational
o Help identify the best courses of action to address problems

Results of that analysis were presented across the company, with an outline of specific ways different teams could improve customer satisfaction. For example:

- Site teams working with individual clients received the scores for those clients. Shelgren and Mader’s team explained what the results meant for them and helped identify areas for improvement.

- Management teams received recommendations on how to implement new company policies to address problems that appeared in a range of different customers. For instance, new training programs were recommended for client-facing employees.

- The marketing team examined responses to shape new campaigns that addressed specific customer concerns.

-> Step #7. Send thank-you email

After the analysis, the team sent out a thank-you email to clients who completed the survey. The message came from the company CEO, who outlined specific changes the company has made, or is making, as a result of feedback from the survey.

“If you want a high response rate, you have to close the loop with the client,” says Mader.
The goal of the Net Promoter program is to convert detractors and passives into promoters. On that measurement, Shelgren and her team have seen Veritude’s score double since late 2006.

But the real key to the customer retention campaign, says Shelgren, was digging deeper into the causes of customer dissatisfaction and developing specific strategies to address those causes. “It has a very direct impact on our business. You really have to follow through and execute on all the different facets of the program. You can’t just send the survey out and forget about it.

The survey response rate in the high 60% to low 70% range has provided plenty of feedback for the team to work with. Some of those comments have yielded significant improvements and new tactics:

- One survey uncovered a particularly low score from one customer site. After interviewing the client, the cause of the problem appeared to be the working relationship between the client and the Veritude manager responsible for that location.

The company assigned a new manager to work with the client, and the score for that location went up 31 percentage points after the next survey.

- Responses from several new clients indicated dissatisfaction with the process the company used to bring new clients onboard. This feedback led to specific changes for how site managers deal with new clients, as well as the creation of a “welcome kit” for site managers to use with new clients. The kit includes a list of important contact numbers at the company.

Overall, the survey program is helping Shelgren and Mader keep Veritude clients and expand the scope of services they provide to them -- the key objective.

“We have very high client retention and great renewals on contracts,” says Shelgren. “We’re certain this is a part of that.”

Useful links related to this article

Creative Samples for Veritude:

Richard Day Research - handles Veritude’s online surveys:

Net Promoter program:


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