The following is the second post in a five-part series on how 1-800 CONTACTS uses Compellon20|20 to drive change within their organization. Thank you to Neil Wieloch, PhD, Director, Marketing Strategy and Insights, for writing these posts and for sharing 1-800 CONTACTS’ successes with us. In case you missed it, the first post in this series was about identifying the drivers of churn.
Does NPS really tell you anything?
Most organizations utilize similar post-transactional surveys. Chances are, a Director or VP read The Ultimate Question some time around 2006 and implemented an NPS tracking system. These same organizations then also generate monthly reports showing that satisfaction or NPS remains high and constant. But how much do these scores really drive actual customer behavior (the true test of value)?
1-800 CONTACTS is one of these organizations: we have been tracking customer satisfaction and NPS on a monthly basis. And our scores are really high; people who purchase contact lenses from 1-800 CONTACTS are really satisfied and highly likely to recommend us to a friend or colleague.
Recently, the Insights Team at 1-800 CONTACTS wanted to really understand the direct impact that satisfaction had on individual customer behavior. Specifically, we wanted to know why there is churn if satisfaction is so high? To identify the drivers of churn, the Team worked with our internal data warehouse team to build a robust dataset that included: customer transactional behavior data, appended demographic and psychographic data on each customer, and data from ongoing customer feedback surveys. We then ran that dataset through Compellon’s predictive engine – and selected “customer re-order” as the target.
The results of the Compellon model were both heartbreaking and insightful: individual satisfaction with their experience is not one of the predictors of customer likelihood to re-order. This measure, which has been tracked for years and is used as an indicator of performance for many departments, is not directly attributable to customer churn.
As it turns out, 1-800 CONTACTS is so good at creating a positive customer experience that almost all customers rate us highly for satisfaction and likelihood to recommend. These consistently high ratings, while serving as a great internal reminder of how well we deliver service – with little variance, serve as poor predictors of customer behavior.
The Insights Team has since re-designed the satisfaction questions in order to generate a wider range of responses. Specifically, we have phrased the questions in terms of customers’ expectations and now ask how well their experience “met their expectations.” This re-design has not only generated a greater variety in responses, it now serves as a predictor of customer behavior.