• by dave.b , Max Kalehoff , March 19, 2010

I recently wrote about the growing hype in marketing circles around customer satisfaction and the Net Promoter methodology. Developed by Fred Reichheld, Net Promoter is a loyalty metric and a discipline for using customer feedback to support business growth and profitability. It's characterized by the ubiquitous Net Promoter question, "On a scale of 0 to 10, how likely is it that you would recommend our company to a friend or colleague?"

The point of that post was to underscore that customer satisfaction and loyalty scoring is worthless if a company is not going to act on the intelligence. That column prompted a thoughtful reply from my friend Bruce Ertmann, a marketing veteran in the automotive industry: satisfaction scores are great, but what matters most is delivering on the promise.

If you consider yourself a marketer, you should listen to Bruce, whose words comprise the rest of this post: "The NPS can be an effective tool for measuring customer loyalty, but only for those organizations that have the basic business fundamentals of customer service fine-tuned. Too many companies refer to their use of this type of survey system as customer engagement, and those are typically the companies that falsely believe they are 'in touch' with their customers.

Consider an organization that dutifully uses the Net Promoter system, monitors the loyalty metrics and, perhaps, even goes so far as to allow customers to write in comments on the very survey that derives the NPS. Those surveys are often administered by a third party, and the data is input into one of too many customer databases where it usually sits siloed within the company's 'customer satisfaction' department. Mary may have been blown away by the product and customer experience, and Paul may have expressed anger over the same, but no one in the company really 'hears' this, and thus, there can be no response; no action.

Consumers who sometimes feel they are being surveyed to death often criticize the Net Promoter system. Many of these consumers also feel it is not very authentic, because companies often like to cheat the system by prepping customers beforehand or even rewarding them in advance for returning perfect 10 scores. The auto industry is historically notorious for this bad practice.

I don't think anything will ever substitute for full-on customer and consumer engagement via the many traditional and social media channels available to companies that are willing to do the work, willing to listen and willing to be accountable for the results. The NPS is limited in that it typically only produces a metric that (1) is derived from customer input and (2) reports after-the-fact information.

Companies that are truly on the cutting edge of continually cultivating lifetime advocates are constantly monitoring and participating in the conversations that abound about their brands -- in real time. They tend to pull in customers and build their advocacy base because they demonstrate real transparency; they are authentic and credible. They've taken care to create a customer experience that is at least commensurate with the brand, and they have integrated that important business component throughout the organization so that everyone knows what it takes to deliver on the promise. That's how great brand reputations, trust and loyalty are built over time. Not just by chasing a metric.

And when things go awry -- as they will from time to time -- these great companies seek to optimize all of the above and get out ahead of the problem -- in real time. Their humility is honest and believable. Failing at that, the greatness fades, and the brand may be irreparably tarnished. Just ask Tiger Woods -- or Toyota."