Concierge Services and Measurability

Posted by: on Sep 30, 2012 | 2 Comments

Concierge services provide a wide array of benefits for companies, residential and corporate developers, hospitality, small medium business executives (“SMBs”). By catering to the “luxury consumer” or “busy executive”, concierge services enhance relationships, increases engagement, retention, productivity, and marketability as well as adding a competitive edge.

Inarguably valuable in today’s hectic and stressful world, the benefits of a warm welcome or a service one doesn’t have time for accomplishing themselves are now welcome more than ever and for business purposes the return on investment (“ROI”) is measurable to some degree through the Net Promoter Score. The Net Promoter Score, or NPS®, is based on the perspective that every company’s customers can be divided into three categories: Promoters, Passives or Neutrals, and Detractors. By asking one simple question – “How likely is it that you, our valued customer, would recommend us to a friend or colleague?” – responses can be tracked to get a clear measure of the company’s (or brand’s) performance through the eyes of the customers.

But, we must remember that the score is only a barometer of perceived value through the eyes of the customer, and can be influenced by many things.  When the customer was surveyed, was the whole experience solely reliant on the brand’s execution or was there a “middle man”? While NPS is a barometer and a form of customer satisfaction, this is not your typical customer satisfaction program.  Net Promoter programs follow an associated discipline to drive improvements in customer loyalty, growth and profitability – and weighs negatives significantly more heavily than the positive responses.

Simply measuring your NPS does not lead to success. A combination of leadership commitment, software and business processes deliver real-time data to employees, so they can appropriately respond to customer feedback alter processes or products and achieve the desired results.

It is the clarity of information and simplicity of communication that enables employees to surprise and delight their customers while operating at peak efficiency. By comparing employee performance week over week, month over month, and year over year, companies and employees can make strides in converting detractors or neutral users of one’s products and services into promoters.

The willingness to always go the extra mile is what distinguishes a customer-centric culture. Service needs to be thinking about what people need before they think of it with a constant mantra of: anticipate, offer, confirm, prepare and deliver – seamlessly!

Controversy in Measuring and Scoring

Despite its popularity, the Net Promoter Score concept has met with controversy from academics, market researchers and even some business owners. Recent research disputes that the Net Promoter Score metric is the best predictor of customer loyalty. Accusations include lack of scientific evidence that the “likelihood to recommend” approach is in no way documented to be a better predictor of business growth when compared with other customer loyalty questions (e.g., overall satisfaction, likelihood to purchase again). The Net Promoter Score is a measure of intention to recommend, rather than measuring the customer’s actual behavior of recommending. In fact, I have personally heard clients rave about services, stick with a brand for years and never recommend the service once to a friend.

Other negatives that have been raised are with the issue of the calculation methodology, indicating that by collapsing an 10-point scale to three components, significant information is lost to “rounding” of results. Along with how most people naturally lean toward the middle of a scale while being surveyed.

Possibly most important, however, is that the Net Promoter Score has been critiqued because it is not inclusive of future sales and growth predictors such as product line, innovations, or pricing. NPS is a measure for word of mouth marketing, and does little towards measuring brand recognition, equity or market power.

In Using Net Promoter Scores

Many businesses have implemented Net Promoter Scores or “Refer a Friend” as a way to help improve customer relationships. This feedback is only useful if a company can act on it. Various software providers have built their platforms to support Net Promoter Scores and enhance customer satisfaction by delivering meaningful data to the customer service employees, while collecting other data attributes such as “why” customers feel the way they do.

In the Concierge Services industry, customer referrals are key to ongoing growth and success, and NPS helps us derive new products and services. Luxury consumers are likely to promote outstanding service as the core component of value, particularly when comparing experience or accommodations of equal physical quality. Additionally, high-end customers are less likely to tolerate survey frequency regarding satisfaction, whereby the ability to access in-depth insights frequently may actually cause to diminish satisfaction.

2 Comments

  1. Mark Kolier (@markkolier)
    September 30, 2012

    Nice post Marla. I like your blog and the blog subjects. Will be reading more.

    • Marla Bace
      October 19, 2012

      Thanks Mark. Appreciate your support and insight.