How Do You Measure Customer Satisfaction?

We are driven by customers, we react to feedback, and we build organizations to interpret this feedback into market-driven solutions and products. In a perfect world, right? We have different motivations to gather customer information, depending on the part of the business you speak to. What does customer measurement mean to your organization, and how do you use it to improve what you do today? Do you measure "satisfaction," "loyalty," "experience," or the new holy grail of customer measurement, "would you refer?" Do you manage a customer scorecard on different variables important to your business?

This varies so widely by industry and by the availability of resources -- and, most important, by the commitment of the leadership team to understanding how this information applies to the business.

In the retail world, there's a frenzied optimism around NetPromoter and understanding if your customers "Would recommend you to a friend or colleague." But if you are relying on this NPS rating only, you are missing the boat as a loyalty factor.



Sometimes it takes going back to the basics to develop a good customer survey strategy that aligns with what you really want to know about your customers. I've put these into fivecategories.

Administration: Surveying customers is an art, not a science. Why? Because, like an artist, you never have enough money to produce the perfect picture, you never have a specific time to finish it, and the end result can be interpreted differently by many viewers. You should first understand that consumers are open to providing feedback on their experiences -- but, it's important to note, if they are 55+, they are more likely to give feedback on bad experiences than good ones. Those 18-34 are not likely to give feedback on good experiences. ( According to the "Forrester Consumer Technographics Retail Study, March 2006). Before you start, you should outline some fundamental "outcomes" that your entire organization believes in. That could be, as I said before "satisfaction," "loyalty," or "experience," but each should have clear definition and controls.

Targeting: Finding that audience of customers, lost customers and prospective customers is key to any survey strategy. Finding the feedback "pool," as I like to call it, is key. There are finite groups that will respond to surveys, will go to great lengths to provide feedback and will not require a great incentive to participate. How many of you actually have feedback segments in your database?

Methodology: Your methodology should align with your resource and budget limitations. If you have a limited budget and limited resources, then the frequency and depth of this analysis will vary. The consumer packaged goods industry has great examples of good consumer research at a high price. There isn't much they don't know about what you like about cat food: price sensitivity, product satisfaction, and relative depth of department involvement. The grocery industry will know everything there is to know about shopping cart analysis and the relative reasons a person shops at a retail, grocery or superstore. The automotive and pharma industries aregreat at focus groups and high-touch satisfaction measurement related to the buying experience, in-product experience and future product needs. The online retail space is typically great at high-frequency online measurement of the online buying experience and NPS. The hospitality industry will know everything about a customer's travel and hotel requirements, but is woefully ineffective at understanding the post-stay experience, the relative levels of satisfaction of discrete customer groups and/or the buying/booking experience.

Feedback Loops: Don't ask for something unless you're prepared to handle the results. The result may be a need for intervention. Are you prepared for this if you get an overly negative response? What will you do with those that "will not refer you to a friend or colleague"? Be sure to structure your programs to align with your ability to support response. This is why many customer service departments own the "customer satisfaction" process. Be wary of marketing organizations that do surveying without keying in the customer service teams.

Compensation: Should we pay for feedback? The answer is simply "YES." Call it a customer reward, but whether you pay or not, you should budget this compensation in some form, as you'll find some customers will only respond to incentives, some will do it free, and others will tell their friends about the rewards. In either case, be prepared to pay for feedback; you'll do so in one form or another. There are creative ways to do this without conditioning your customer to rewards, yet promoting the right activities.

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