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Follow on Google News | RAPID Loyalty Measurement gives new Dimension to tired Net Promoter® Score (NPS)Business Over Broadway announces the RAPID loyalty measurement approach, helping companies like Mob4Hire accelerate business growth by understanding three facets of customer loyalty: Retention, Advocacy and Purchasing.
"While there is a consensus among customer feedback professionals that business growth depends on improving customer loyalty, there is little agreement in how to best measure customer loyalty," states Hayes. "We have seen improvements in many areas of VoC programs, yet the quality of the measurement and meaning of customer loyalty has not kept pace. I created the RAPID approach to offer scientific guidance regarding what loyalty questions to use in customer surveys." Based on over 8,000 respondents across five major studies in the last three years, Hayes provides quantitative evidence that customer loyalty consists of three primary components, and he presents reliable, valid and useful metrics to help companies assess each loyalty component: Retention Loyalty Index (RLI): 3-item index measures the degree to which a customer will remain as a customer/not leave to a competitor Advocacy Loyalty Index (ALI): 4-item index measures the degree to which customer feel positively toward/will advocate your product/service/ Purchasing Loyalty Index (PLI): 4-item index measures the degree to which customers will increase their purchasing behavior In the wireless industry, Hayes found that each of these three loyalty indices were predictive of different types of future business growth for carriers. Specifically, RLI was the best predictor of churn; ALI was the best predictor of new customer growth; PLI was the best predictor of increases in average revenue per user (ARPU). For each of the RAPID indices, network operators with higher loyalty scores experienced faster business growth than network operators with lower loyalty scores. The RAPID approach has been adopted by Mob4Hire into their MobExperience offering, helping companies to optimize their customers' mobile experience and user loyalty. Stephen King, CEO of Mob4Hire states, “In many cases in the mobile industry, companies rely solely on customer loyalty as their primary marketing tool; for example, our research shows that mobile users are more likely to download mobile apps that have, at least, a 4-Star User Rating in the Apple App Store. We licensed Dr. Hayes' RAPID approach as a key component in our MobExperience solution because his methodology has helped our customers release mobile apps and websites that maximize different types of user loyalty and reflect the quality of their brand." Despite many companies using the Net Promoter® Score (NPS), researchers and practitioners have disputed whether using this metric alone is adequate. First, the NPS is not the best predictor of growth. Second, single-item measures, such as the NPS, are inherently less reliable (have more measurement error) than multiple-item measures. Third, the NPS' difference-score approach is ambiguous because the same NPS score can occur under different circumstances (NPS = P - D; for example, 50 – 20 = 30; 40 – 10 = 30). Finally, the NPS taps only one component of customer loyalty (advocacy), focusing primarily on driving new customer growth at the potential risk of mismanaging customers. Relying solely on the NPS, companies may miss opportunities for growth through existing customers. The RAPID approach addresses all of the pitfalls of the NPS. The three RAPID indices are easy to understand, have excellent measurement precision, comprehensively measure the health of the customer relationship and help companies understand how to increase business growth through new and existing customers. The three loyalty indices each provide reliable, valid and useful information about the different facets of customer loyalty. Hayes concludes, “Rather than blindly using loyalty questions in customer surveys, practitioners are better served if they actively select the loyalty questions that fit their specific business needs. A company that finds itself losing customers to its competitors could use the RLI to improve customer retention. A company that wants to increase purchasing behavior could use the PLI to target programs that result in higher purchase behavior. A company that finds its new customer growth rate stagnant could use the ALI to increase new customer growth. To effectively manage business growth, companies need to intelligently select their customer loyalty measures. The RAPID approach offers one solution to this problem." Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld About Mob4Hire As the leader in brand mobile optimization, multi-award winning MOB4HIRE (http://www.mob4hire.com) uses its international community of 52,000 mobile experts in over 150 countries to provide usability and user experience research, mobile engagement measurement, market research, and functional testing services to global brands, telecoms, ad agencies, market research agencies, publishers, content providers, SIM companies, mobile app and mobile web developers. Founded in 2007, Mob4Hire partners include Nokia Forum, Motorola Motodev, Samsung, RIM Blackberry Alliance, NAVTEQ, O2 Litmus and Flurry Analytics. For more information, contact info@mob4hire.com. # # # About Business Over Broadway Dr. Hayes is Business Over Broadway (B.O.B.; http://www.businessoverbroadway.com). He is a recognized expert in Customer Feedback Programs (e.g., VOC programs, customer loyalty programs), and customer satisfaction/ End
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