Make it worth your while

Editor’s note: Brett Hagins is a marketing research program manager for Texas Instruments, Inc., and the owner of Marketing Visience, Inc., a Plano, Texas, research firm.

Most customer satisfaction studies take respondents through a battery of predefined attributes and have them assess the performance of a company relative to its competitors. The studies also have some mechanism for gauging the importance of those attributes and their impact on overall satisfaction. Once the results are analyzed, company executives are presented with a “state of the union” report on where the organization is doing well and what can be improved.

What happens next?

At many of the organizations that do customer satisfaction research, nothing! But it doesn’t have to be that way.

One approach to make more effective use of customer satisfaction research efforts is to get employees and management more invested in the act of doing research. And one way to do that is by hosting brainstorming sessions in all relevant process areas. The aim is to uncover any ideas the process leaders have for improving satisfaction in their respective areas. If the research shows that customers feel the process leaders’ ideas would constitute an improvement, they may be more likely to take action.

Examples of the types of questions the employee groups may raise include:

  • Could we have live support via instant messaging on the Web?
  • Could we expand customer interest by loosening our payment schedule?
  • Could we modify our pricing structure in a way that is revenue-neutral but customer-advantageous?
  • Is there an important product extension opportunity that we are missing?

Common objections

Internal clients will have some common objections to testing process improvement ideas. For example, “The exercise will be a waste of time because customers will say they want everything!” This is why it is critical to structure process improvement questions so that the improvement is not only desired by the customer but of central importance in keeping or increasing their business with the company: “Which of the following would cause you to increase your business with Company X by at least 5 percent?” Or, “For which of the following would you be willing to pay a 10 percent price premium?”

Another common internal client belief is that the customer satisfaction study should be a diagnostic rather than a process improvement tool. (“We can always do more research after we highlight where the problem areas exist.”) The problem with this thinking is that that subsequent research is rarely done. In reality, most companies are lucky if they can afford one customer satisfaction survey, much less multiple ones. This is why it is critical to embed at least some process improvement ideas in the core survey if you want to impact business results. It is much more common for a survey not to go deep enough and end up not driving action than it is for a survey to be too complicated.

Getting commitments

Again, it’s much easier to drive process improvement if you get a commitment from the appropriate executives on the front end.

This involves several steps:

1. Develop an analytic plan that shows how the results will be used.

2. Get agreement from key process owners that they will own a particular measure.

3. Collaboratively determine with each process owner what an appropriate level of satisfaction is for their area (i.e., agree on a target number).

4. Find out their ideas - and the ideas of people beneath them - for improving the process if the target is not met (or even if it is).

5. Embed the most promising ideas in the survey and allow the customer to tell you what would be most beneficial.

6. Get a commitment in advance from the executives as to what level of customer support would be needed in order to implement Idea X.

7. Uncover any other barriers to implementation before the survey is executed and test those ideas that are both customer-centric and practical.

8. Design questions in the survey that anticipate and provide ammunition for overcoming internal barriers. “If Process X were implemented, would this allow you to increase your business with Company Y by 10 percent?” Alternatively, “Would you be willing to pay a small fee of $__ in exchange for Company Y implementing Process X?”

One of the ways to gain senior buy-in and sponsorship for a customer satisfaction study is to link it to an existing high-level mandate from executives. If improving customer retention by 10 percent is a mandate, the survey should be structured to help the organization do that.

Another way to elevate commitment is to link customer satisfaction scores with executive compensation or bonuses. This demonstrates in a concrete way that executives are making customers their No. 1 priority.

Tie it to revenue

It is essential to tie customer satisfaction numbers to revenue if you want senior executives to take notice. Typically, behavioral questions in the survey are most likely to be a leading indicator of future revenue from customers: How likely are you to continue to do business with Company X in the future?

Another critical task is to understand what ratings are good enough to have a positive impact on revenue. If 80 percent of your customers are rating your service as good rather than very good or excellent, this may spell trouble for your future market share.

One way to determine if the customer rating is high enough to positively impact revenue is to make a chart that plots overall satisfaction on the horizontal axis and the likelihood to continue to do business on the vertical axis.

The hypothetical example in the graph shows that when 100 percent of customers rate your customer service as excellent, almost 80 percent are likely to purchase additional products from you. Alternatively, when only 70 percent of your customers rate your service as excellent, then only 50 percent are likely to purchase additional products from you.

The threshold for how strong satisfaction must be in order to impact revenue will vary depending on the industry you are in and the switching costs associated with that industry. The level of satisfaction needed to ensure loyalty will be significantly higher in commodity industries due to the low switching costs than it would be for firms offering IT services consulting, for example.

How does one go about tying the customer feedback on process improvement ideas to revenue? One way is to understand what impact that particular process area has on overall satisfaction based on regression analysis. This first step will allow you to understand, hypothetically, that as customer service ratings go up by 50 percent, overall satisfaction goes up by 25 percent. You can then link the increase in overall satisfaction to the revenue graph discussed earlier.

If you’ve asked respondents what impact Process Improvement X will have on their likelihood to do business with you, or if they are “willing to pay a __ percent price premium” for it, it’s important to remember that respondents will frequently overstate their intentions and so you need to “factor down” the customers’ stated intentions to get closer to the actual impact. On a 5-point scale for example, this can be accomplished by taking 70 percent of the “definitely would,” 25 percent of the “probably would,” and 10 percent of the “might or might not” respondents. The percentages used to factor the level of customer interest will vary by category and can be continuously refined.

Disseminating throughout the organization

While giving in-person presentations is always desirable, there may be so many people who need to see the data that one does not have the time to give all the presentations necessary.

The following alternative means of communication should be used to supplement in-person presentations:

  • One-page summary memos.
  • PowerPoint presentations with accompanying voiceover narration distributed through your IT department to all employees.
  • Sharing individual account data through an interactive, online customer satisfaction tool. Walker Research is one example of a customer satisfaction research firm that allows large client companies to distribute their customer satisfaction data real-time to a sales force or as many people as desired, using a tool called SmartLoyalty. Individual salespeople are able to log-on and see the results for their individual customers. This kind of a tool is critical. The days of the marketing research department hoarding data and presenting it on demand should come to a close. The danger of the raw data being misconstrued when there are many end-users are far outweighed by the danger (and likely reality) of the data not having sufficient visibility across the company.

If some version of the results is shared with all employees via a Web-based tool, consider giving employees a short test on the results at the conclusion. This will cause people to pay more attention to the presentation. Companies have used the Web-based testing approach for issues like IT security and sexual harassment; the same methodology would work with the results of customer research.

With regard to getting senior management to pay attention to the data in particular, the use of some guerrilla marketing techniques may be appropriate. You know where these people sit. You know where the executive elevators and washrooms are. Constructing posters with surprising statistics and putting them in opportune places (along with the source of the statistic and your name, title and phone number if they want more information) is one way of getting the attention of people you can’t get in to see.

More willing to act

No matter how you do it, the key is to get people aware, interested and involved. Because when they’ve had a hand in the process behind the research, chances are they’ll be much more willing to act on the results.