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Goals that Drive Improvement

Posted on November 16, 2010 , by Steve Bernstein
CATEGORIES: Lessons Learned

A few weeks ago I wrote a short note about setting Net Promoter targets.  I neglected to highlight something – possibly the most important element! – which is about focusing on improvement.  Although target-setting is often thought of in terms of driving improvement, in my experience companies often set goals that focus on end scores.  For example, a company might want to move from a 30% NPS to a 35% NPS.  With a goal based on scores, employees will focus on scores (duh!), which means that they will do whatever they need to do to justify a score.
So what’s wrong with that?  Here are 2 considerations:

  1. Volatility:  NPS can move around quite a lot, with swings based on sample, seasonality, macro-economic factors, and more.
  2. Gaming:  If you want a good score, who are you more apt to get feedback from… the customers that love you, or the customer that have “checked out” and no longer want to have a relationship with your company?

If the objective of setting Net Promoter targets (goals) is to improve then an improvement-centric goal is in order.  Once you have a trustworthy (representative and validated) baseline, and once you know what it will take to improve those scores for a given segment, you can set a “% Improvement” target for that segment.  A goal on “Improvement” means that people (employees) will focus on improvement, doing what needs to be done to get better results. 
Next, what do you want to improve?  Taking action based on customer feedback requires that the feedback be representative of the business.  If your (segmented) response rate  isn’t representative, then consider focusing on improving coverage (not NPS).  In this way the focus is on getting feedback and taking action, and not on the voice of the loudest customers that may not be speaking for everyone.