Editor's note: Doug Berdie is president of Consumer Review Systems. He can be reached at dberdie1@msn.com.
The field of customer satisfaction has always been closely aligned with desires to improve the quality of a company’s products and services. Marketing researchers who are serious about their profession study the effects of the research they conduct, keep up to date with approaches others are trying and strive to continually improve the effectiveness of their work – both in terms of the research techniques used and the effects their data have on improving quality. Over the past 40+ years in this business, many insights have become obvious to me. Some of these include:
Customer satisfaction is a necessary, but not sufficient, condition for customer loyalty and retention. My research and that of others has shown convincingly that many highly satisfied customers do not remain loyal and some customers who are not satisfied do remain loyal. What this means is that satisfying customers must be a high priority because it at least makes it possible to retain them. However, each company must also determine the other factors that are necessary to retain customers. Only when both conditions are met will a company have a solid customer retention practice.
Customer satisfaction research and improvement efforts require a commitment from top management. Companies that embark on customer satisfaction efforts without the backing of top management usually fail to garner the resources needed to conduct quality research and to design and implement the types of changes required to improve customer satisfaction. Corporate downsizings and other cost-cutting activities have placed a premium on resources and those deemed most critical by top management usually prevail.
Customer satisfaction activities must be viewed as positive by employees not as weapons being used by management. If employees believe customer satisfaction scores will be used against them, they will openly or furtively sabotage the effort. Employees need to see that improved service to customers makes their life easier, helps the organization and benefits everyone. Using scores to focus on individual employees must be carefully considered, as must equitable ways to use CSI scores to drive bonus/incentive programs.
Sharing the good news with employees is as important as sharing the “improvement opportunities." Well-designed customer satisfaction research systems identify customers who have unresolved problems and quickly feed that information back to those who can address the issue. If this feature is not supplemented with continued feedback of the "good news," the system becomes painted with a negative brush and all feedback becomes greeted with, "Oh, no! More bad news!" Positive feedback helps unite the employee teams responsible for providing customer satisfaction and retention.
Customer satisfaction research without action-oriented presentations and a commitment to follow-up research with action will not lead to success. The marketplace is filled with companies that have collected customer satisfaction research data and are disappointed because they have seen no results from their activities. Research, by itself, collects information. Information is not action; it facilitates the planning of sound actions.
Research data presented in certain formats is more easily translated into action than data presented in other ways. The clients I have worked with have been successful in "turning data into action" because 1) major effort is spent translating the data into business language that addresses client issues and 2) clients always receive key summary themes that run through the data and specific, implementable recommendations based on those themes.
Good intentions alone don’t result in improvement. Merely knowing the areas of customer satisfaction and trying to address them through good intentions (without an organized set of predefined activities) will not result in improvements to customer satisfaction. Improvements only result when action plans are clearly defined, formalized and implemented.
Improving customer satisfaction requires prioritization and focus of effort. Effective customer satisfaction research must identify those parts of the customer experience that most influence satisfaction. Among these, a manageable number (usually not more than two or three) of the ones offering the most potential benefit from improvement must be targeted for action. This approach ensures that you are addressing the things that matter most to the customer and are focusing your attention rather than diluting effort across too many areas.
Most customer satisfaction improvements come from changes in the behavior of company employees. Whether changes are needed in employee attitude, how employees relate to customers, product/service changes, billing changes or delivery changes, it is people who make those changes. To change the behavior of employees, four things must occur: they must be told clearly what they are to change and why; they must be told how they will benefit from the change; they must be given tools to make the changes; and they must periodically be told what progress they are making in changing their behavior. For these conditions to be met, a good upfront and ongoing communication system is needed as well as some form of reward/recognition based on the behavior changes.
Implementation of action plans occurs most effectively when baby steps are taken. Businesspeople are very busy. Every day, crises emerge to be dealt with, making it difficult to tackle new initiatives. Effective customer satisfaction improvement starts with small baby-step activities that overcome workplace inertia. Breaking work plans into small tasks makes it easier to start and easier to complete them when time is limited.
Clear demonstration of positive ROI related to customer satisfaction activities is needed. Some management is willing, initially, to take on faith that improved customer satisfaction leads to increased profits. However, even these managers usually require proof of ROI from their expenditures after one or two years. Make plans at the very start of the customer satisfaction effort for how you plan to provide this type of evidence.
Satisfaction is only the first step in building long-term, loyal customers. Once the satisfaction drivers are uncovered and addressed, organizations must focus on gaining a thorough understanding of the factors that affect retention and loyalty so they can mount a systematic effort to address them. The factors vary from organization to organization and research is required to help identify which ones are in play for your firm. Things like barriers to switching, the purchase process, marketplace conditions, product/service availability, personal relationships with customer contacts, etc., all need to be investigated to design the most effective customer retention and loyalty process.
Try new tactics
Customer satisfaction/loyalty research has been around for a very long time. Those in the field who see the most benefit from it are those who continually learn from others and are willing to try new tactics to accelerate the benefits clients see from their research expenditures and efforts. Hopefully, the above insights will help in that process.