Leading companies like FedEx and others have found that a daily metric that tracks occurrence of errors that frustrate customers can be a simple and easy way of measuring and predicting when a customer might leave and never come back. By holding focus groups with customers from a variety of industries and locations, FedEx gathered a long list of things the company had done to aggravate them over the years. Once this list was narrowed down to a reasonable number of problems, they had customers rank order them from the most maddening to the least, assigning 1-to-10 severity ratings. Every day, FedEx tracks occurrence of these problems, multiplies the frequency by the severity, and rolls it up into an index that measures customer aggravation levels. It turns out that this index is directly correlated to disloyalty.
The biggest downside of a metric like this is that it does not provide data on overall satisfaction levels or situations where you might have surprised and delighted a customer – it only measures screw-ups. However, I think the list of advantages far outweighs the limitations:
- Aggravation index can be tracked and reported on a daily basis, providing real-time performance data
- Customers do not have to put out any time or effort to give you data on their levels of dissatisfaction
- Most organizations track the things that frustrate customers already so there is not a lot of cost in implementing this metric
- The metric is simple enough for all levels of employees to understand
- The data is actionable – levels of aggravation can be analyzed to determine the specific events or errors that occurred and action plans can be put in place to improve
- Aggravated customers eventually leave and this measure gives you a way to detect minor problems before this occurs.
Source: “The Customer Aggravation Index: Predicting Customer Loyalty Without Surveys”
Original Publication: Business Finance
Subjects: Customer-Related, Management