Monday, July 10, 2006

GE uses "net promoter score" to measure customer satisfaction

The above-linked article from today's WSJ online illustrates how General Electric is increasingly relying on customer surveys focused on customer referenceability to measure the performance of their products and business units.

Most companies' customer surveys are hopelessly lengthy and confusing. In many cases, they measure things the companies think are important rather than the things customers think are important. Which is a waste of time and money.

The concept GE uses, pioneered by Bain's Fred Reichheld ("The Ultimate Question") presumes that the answer to a simple question--"Would you recommend us to a friend?"--is the best measure of customer satisfaction. The surveys GE uses have more questions than that, although starting with that single one makes a lot of sense to me.

"Would you recommend us to a friend?" It's a question every company should ask its customers regularly, and take great heed of the answers.

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