Customer Satisfaction Measurement

Customer Satisfaction Measurement 1 © The Leadership Factor Ltd

Customer SatisfactionMeasurement


Why CSM?


Why satisfied customers?

Buy more often Buy more (range) Pay more (9% less price sensitive) Recommend more

Free advertising Referred customers are best

Stay longer

Make companies more profitable


Satisfaction - Loyalty links

Zone of affection

Zone of indifference

Zone of defection

1

20%

40%

60%

80%

100%

Loyalty

Satisfaction5 10

Apostle

Terrorist

Source: Professor J. Heskett, Harvard Business School


Customer satisfaction pays

Customer loyalty is a better predictor of profit than market share (Harvard)

Dow Chemicals: 1% increase in loyalty generates 1.2% increase in account share

IBM: 1% gain in customer satisfaction index results in $100 million extra sales over 5 years

Poor service is the main reason for customer defections

Service differentiates more than product or price in most markets


Why measure satisfaction?

Traditional measures not adequateCustomer complaints

Most dissatisfied customers don’t complain Most complaints don’t reach senior management

Salesforce Selective feedback of information Subjective knowledge based on relationships

Only objective third party surveys provide a reliable customer satisfaction indicator

Requirement of ISO 9001:2000


Continual improvement of Quality Management System

Requirements

Customer

Sat isfact ion

Customer

Measurement analysis

improvement

Management responsibility

Resource management

Product realisation

Input

Product

Output

Source of diagram: BSI


How to measure customer satisfaction


Whose perspective?

productspeople

processes

outcomesresults

benefits

Lens of the organisation

Lens of the customer


Exploratory research

Talk to customers to fully understand the lens of

the customer

It is essential that customers set the agenda

Depth interviews or focus groups

Range of customer typescustomer valuemarket segments full coverage of DMU

(decision making unit)

Customer requirements Forced trade off Relative importance Questionnaire based on

what’s most important to customers


Self-completion questionnaires

The main survey

Personal interviews

Telephone interviews


Choice of survey

Personal interviewsToo expensive

Postal surveyLowest costLikely to be a low response rate (20%)Makes the sample unrepresentativeMay not be able to trust the result

Telephone surveyGood response rate – reliable resultLow satisfaction probed – understand reasonsOn balance the most cost-effective


Telephone survey

Introductory letter to customersExplain the purpose of the survey

We need your feedback We want to make you as satisfied as possible

15 minute telephone interview At a time convenient to you Only once a year

Sample of 200 customers Representative

Based on customer valueRange of decision making roles covered


The results


Importance6.5 7 7.5 8 8.5 9 9.5 10

Accuracy of deliveries

Trade margin

Product development

On time delivery

Problem resolution

Treat me like a customer

Staff training

Brand promotion


Satisfaction6.5 7 7.5 8 8.5 9 9.5 10


Trade margin

Product development

On time delivery

Problem resolution


Staff training

Brand promotion


Satisfaction Index

80.4%

90%

70%

60%

50%

ABC LtdABC Ltd.


Moving forward


Satisfaction IndexTM targets

80.4%

82.0%

83.4%

84.7%

85.5%

79.0%

80.0%

81.0%

82.0%

83.0%

84.0%

85.0%

86.0%

87.0%

2000 2001 2002 2003 2004

Borderline

Good

Very good


Improving customer satisfaction

6.5 7 7.5 8 8.5 9 9.5 10


Trade margin

Product development

On time delivery

Problem resolution


Staff training

Brand promotion

Importance

Satisfaction

PFI

PFI

PFI


Mirror survey


Mirror survey (optional)

Simultaneous survey of employees who affect customer satisfaction

Self-completion questionnaire “How important or unimportant do you think these

things are to our customers?” “How satisfied or dissatisfied do you think

customers are with our performance in these areas?”

Involves employees in the CSM process Highlights causes of customer dissatisfaction

by identifying ‘understanding gaps’


Mirror survey: importance

6.5 7.0 7.5 8.0 8.5 9.0 9.5 10.0


Trade margin

Product development

On time delivery

Problem resolution


Staff training

Brand promotion

Customer

Employee


Mirror survey: satisfaction

6.5 7.0 7.5 8.0 8.5 9.0 9.5 10.0


Trade margin

Product development

On time delivery

Problem resolution


Staff training

Brand promotionCustomer

Employee


Overview of the process Project planning Exploratory research Questionnaire design Main survey Analysis and reporting

Measure based on what’s important to customers


How to proceed


DIY or use external specialist

Advantages of DIY approachLess expenditureLearn new skills

Advantages of specialist agencyUse their expertise – get it rightCustomers have option of anonymity, making

them more honest (many will be happy to be identified)

Will show we are taking the concept seriouslyAgency will do the work much more quicklyAgency can help with next steps after the survey


Agency timescales

Exploratory research phase: 6 weeksBriefing and project planningConduct 12 depth interviewsDesign questionnaireInterim review meeting

Main survey: 6 weeksSamplingInterviewsAnalysis and reportingPresentation of resultsFeedback to customers


Estimated agency cost options

Exploratory researchFace to face depth interviews £6,000Telephone depth interviews £3,000Focus groups £8,000

Main surveyTelephone survey (200 interviews) £10,000Postal survey £6,000

Mirror survey (optional) £1,750


Suggested agency


The Leadership Factor Leading specialist provider of research in

customer satisfaction measurement 100 staff HQ in Huddersfield, plus offices in France,

Italy, USA and Australia ISO 9001 registered Over 200 satisfaction studies per annum – the

most by any UK agency Large Satisfaction Benchmark database Can make comparisons across many blue chip

companies

Customer Satisfaction Measurement

Documents

Transcript of Customer Satisfaction Measurement