I’ve recently been engaged in an energetic discussion with several peers in the industry around the topic of leveraging the telephone methodology for a Net Promoter program. While it is expected that the telephone data collection costs are typically more expensive than online interviews on a per interview basis, there are far larger issues that must be considered. Pearl Industrial phone
I have cataloged my thoughts around
1. “Real” cost of telephone
2. Quality of the data collected
3. Impact on ROI
When implementing a Net Promoter program, the best practice at the outset is to establish an ROI based on sound financial metrics. This is usually some kind of number; Promoters are worth 20x the value of a detractor, based on the average life cycle customer value. Therefore the ROI will be based on the number of promoters created each year. Or, you might start with the premise that becoming the loyalty leader in your category will drive 2.6 x the profitability of the industry average. Both financial models are well documented in books and articles analyzing the impact of NPS within many organizations. Given the potential for improvement, the focus should be on accelerating the realization of these benefits.
Email addresses of your customers are typically difficult to collect as compared to telephone numbers. In some cases, your account managers or sales people may have them, rarely are they captured correctly in central CRM systems. Therefore, with online programs, in the initial crucial waves of research, one can expect upwards of 50% email bounce backs and response rates in the 10-20% range. Most organizations will assign staff to correct the data in the CRM data base, which means calling these people or their client reps. Most organizations will also assign staff to encourage their client reps to remind the customers to complete the survey, at the cost of at least a phone call and probably a face to face or lunch meeting. These are a few of the hidden costs associated with the online only data collection methodology.
The impact of lower participation rates (customers not responding or not given the chance to respond) along with the absolute costs associated with correcting these email addresses could easily outweigh the savings in data collection costs.
On the other hand, if one starts with telephone, the customer file from the CRM or accounting system is likely to be much more current and effective (let’s face it, accurately recording and retaining telephone numbers is easier). Even though the person may have moved on from their job, the phone number still reaches the correct company and usually the correct department. The interviewer can confirm the replacement person is in the right role, update the CRM data and complete the NPS evaluation, usually achieving over 50% participation rates for companies that start with a high NPS. Also if the phone number is wrong, the interviewer can look up the corporate phone number and find the correct person in the case of a relationship based program!
The perceived savings by using an online methodology is due to the reduced amount of money spent with an external data collection vendor, but it ultimately can increase the total cost of the program. When you factor the cost of the client reps and marketing department’s time taken to try to achieve acceptable participation rates and clean the CRM email data, you can see that telephone will ultimately be less expensive.
Telephone based programs will also establish a basis for trustworthy data more quickly and with more integrity than email or IVR based programs. With telephone, the participation rates to client identified research tend to be 50% or more. This will instill a much higher level of confidence across the organization. Also, with a higher participation rates there are more customer data points from a broader base of clients. Including a calling detractors program into your NPS program will drive a very high level of awareness and buy-in for the program along with closing the loop with your detractors. Your marketing and customer care departments will spend more time understanding each customer touch points in order to identify ways of creating more promoters and less time trying to achieve trustworthy data.
With regards to trustworthy data, one of the differentiating elements of telephone data collection is the fact that there is a person asking the questions. While it is known that this introduces an element of the social desirability bias, this also allows for much more comprehensive probing and clarifying of the follow-up open-ended questions, such as “why did you rate the way you did”. These comments are critical to the acceptance and to identifying what to change to achieve quick wins for your program. If you really want to accelerate your program, there are a select few telephone data collection firms that can provide mp3 files of the customer verbatim comments directly to the executives who are responsible for calling detractors. With these recordings, the executives are more prepared for the call knowing the true emotion of the detractor and can quote exactly what was said. There is nothing like the true “voice” of the customer to