According to the IOD 80% of companies say they deliver ‘superior’ customer service, however only 20% of customers agree with that sentiment.
Now with increased competition, crowded markets, little product differentiation and flat sales makes it more important than ever to give top class customer satisfaction.
So, how do you quantify, measure and track customer satisfaction and how do you know what your customers’ expectations are?
Consider the following statistics:
A 5% increase in loyalty can increase profits by 25% and a very satisfied customer is six times more likely to be loyal than just a satisfied customer. Only 4% of dissatisfied customers complain. The average customer with a complaint tells at least nine other people. Satisfied customers tell five people about their good treatment.
So a business should view each purchase by a customer as an opportunity to recruit a promoter of the business. Don’t just watch sales volume and rely on the sales rep describing your customers state of mind, track frequency of complaints and turn a dissatisfied customer into a brand advocate!
Customer satisfaction is based on
- business relationship
- whether services/product meet or exceed expectations
So, how can you do more for your customers. If a customer scores 90% satisfaction, they are then 90% more likely to recommend you. If score drops to 80-89% the likelihood of recommendation drops to 48%. It is fundamental in building a stable business.
Survey your customers using email/phone/mail or face-to-face and rate their experience on a scale of 1 to 5 and calculate the effect of customer satisfaction, for example if:
100 customers spend £100 per month and customer satisfaction is 90% then there are 90 happy customers and 10 unhappy customers. 10 unhappy customers = £1000 per month lost.
Next month customer satisfaction is 75%. 25 unhappy customers = £2500 per month lost. That begins to put the importance of customer satisfaction into perspective.
Sales and management must head the initiative for implementing a customer satisfaction system. Compare your own customer satisfaction with that of your competitors. Engage your employees, measure everyone’s KPI’s and inform your customers about the changes you are making. Ask the question of your customers why they prefer another brand over yours, get their feedback. Are your employees making promises they can’t keep. Identify the best company in your sector and benchmark against them.
During a Business Exposure Group meeting we asked ‘When is the right time to conduct a Customer Satisfaction Survey, is it
– post purchase
– periodic surveys
– on a continuous basis
– verbal feedback on a monthly basis
– should you have a formal measurement in place’
It is important to realise that what satisfied your customers at the beginning of 2018 may not satisfy them in 2019. Use the Brexit issue as an excuse to talk and discuss concerns and areas of opportunity. If you receive a low score from the customer survey it is important to reply – ‘You were right to feel let down and this is what we are going to do to rectify the problem’. This makes you look proactive and gives you maximum credibility with your customers.
However, if customers complete a survey their expectations rise and they expect positive changes. Do not let the surveys sit there gathering dust.
There are 6 parts to a customer satisfaction survey –
- Who should be interviewed – eg a truck manufacture, should it be the driver / manager / director
- What should be measured
- How should the interview be carried out
- How should satisfaction be measured
- What do the measurements mean
- How to use the survey to greatest effect
Put yourself in your customer’s position. What do they consider important, and when you have evaluated the results of your customer satisfaction survey communicate some quick wins via your monthly newsletter to show how the business is committed to customer satisfaction and improving business processes.