I recently read this article on B to B online. Being the VP of Customer Loyalty at a Software company made me really sit up and listen. What is this, someone questioning the NPS (net promoter score), isn’t that just a fancy way of saying customer loyalty. The NPS has long been a favorite in Fortune 100 for touting and measuring how loyal their customers are, this is getting interesting.

And speaking of fancy!  My 4 year old has a favorite booked called Fancy Nancy (written by Jane O’Connor), the story is about a little girl who loves being fancy, throughout the book are things like Nancy’s favorite color is fuchsia which is a fancy way of saying purple, or a stupendous idea, which is a fancy word for a great idea, or my favorite- my family is posh, that’s a fancy word for fancy! While this is entertaining to my 4 year old, it is not so entertaining to your employees or your customers when we use fancy words to describe business processes. What does Net Promoter Score mean? It is just a fancy way of saying measuring customer loyalty!

We measure customer loyalty at Infusion Software, via a similar methodology as many companies. We send a monthly survey to a subset of our customers where we ask them, “would you recommend Infusion Software to our friends/colleagues/business associates?”. Our customers are allowed only 2 ways to respond- thumbs up or thumbs down. I suppose we could do something a little more fancy, like multiple questions or varying degrees of loyaly, are we uber cool? Or just cool? Since we service small business customers, we like to keep it simple and straight forward, but most importantly, we like to keep it simple to provide us with the data we need to act on, and super cool, vs uber cool doesn’t help us much.

One really important aspect of NPS, again, fancy words for customer loyalty, that is often over looked or not used as often as it should be as a balancing metric, is, in my mind the most fancy way of measuring customer loyalty- follow the money!

If your customers are continuing to pay you- since we are a SaaS provider, our customers essentially vote their loyalty every month, by continuing to pay us, by purchasing more services from us, or on the converse by stopping their billing- we just got a big goose egg- fancy word for thumbs down, or dissatisfied customer. I believe, many times, inside big companies people look to one metric and say look how well we are doing our NPS is high, we are uber cool. However, without looking at how people really vote their loyalty- the monthly recurring revenue or new services revenue generated, licensing revenue etc., you are getting a false sense of good fortune- fancy word for inflated happiness, when you may actually have a flat or decreasing bottom line. Fancy words for not good news for your company.

So measure customer loyalty, or NPS, find a way that works for your company, but always keep your eye on the real vote of confidence, approval, or loyalty your customers give you- which is their money.