Customer Satisfaction – deriving insights from data
Several operational, technological and process innovations have leveled the playing field in most industries. Size and scale no longer necessarily guarantee market share. Customers have more avenues to indulge in comparative buying and are more likely to investigate alternative vendors. Therefore, in a business climate far more alive with dynamic forces and behavior, customer satisfaction has become more critical than ever before.
Ruby Newell-Legner, an American CRM specialist, notes in her 2016 book, “Understanding Customers”(1), that a mere 4% of dissatisfied customers approach businesses with their concerns and it can take up to 12 positive interactions to make up for a single negative experience. Worse still, a far more dramatic 91% of customers would terminate their relationship with a business without any interaction at all. Likewise, a recent Deloitte survey found how customers have become much less tolerant of the lack of an easy and seamless experience (2). Over half of the respondents to this survey said that the overall enjoyment of their customer experience was important in their decision to purchase a service or product.
Given such size-able negative consequences, businesses are well advised to allocate the required resources and actively strategize towards keeping customers satisfied.
Ensuring effective measurement of customer satisfaction is key
A significant aspect of customer strategy is listening to one’s customers, which can be achieved by conducting feedback surveys. However, organizations need to go about doing this unobtrusively and to avoid over-surveying. Constantly soliciting surveys from customers has been shown to generate considerable resentment and is not advisable. A reliance on customer complaints to identify areas of improvement too is inadequate and likely to generate a skewed perception.
Here are a few things to consider when deriving insights from data gathered through customer surveys.
- On a 1 to 10 numeric scale to measure individual aspects of the service they are receiving, the vast majority of customers tend to rate between 7 and 9. This means that an average performance should be rated at 8, rather than 5.
- Businesses should assess the data set their surveys generate with an eye on both what is working and what isn’t. “Customer satisfaction” scores could seem acceptable, while certain specific areas score low – or vice versa.
- Looking at customer feedback in isolation from the larger industry you are part of is a mistake. Assessment of data must take into account how your competitors are perceived.
- In order for data to be useful in generating actionable insights and driving strategy, it must be statistically significant. Organizations should take care to not be misled by data that is not representative of overall trends.
- It is important that each piece of feedback from the customer is considered within context. For instance, a recent service experience that is liable to skew the customer’s short term opinion – whether in the negative or positive – should not be extrapolated from disproportionately.
Interpreting data must lead to strategic insight and proactive initiatives
Gathering and interpreting data is only one half of the challenge. It is perhaps even more critical to generate actions to drive improvements in customer satisfaction.
- Care must be taken to ensure that teams driving change are small and focused along specific actionable goals in quality, customer engagement and internal processes. Diffused responsibilities reduce the potential for innovations and breakthroughs.
- Customer feedback needs to be mapped against business KPIs. Data is useful but data-driven action is truly priceless.
- Actionable items must include both long term and short term initiatives. As important as the overarching concerns may be, addressing easier fixes helps generate positive perception among customers.
- Customer satisfaction must be owned by the entire organization – not customer service or sales and marketing alone. The top echelon of management must also be seen to be invested and involved in the effort, for it to succeed.
Customer satisfaction is a key differentiator that secures the market share of a business. In an era of unprecedented volatility in customer behavior, creating a robust cultural orientation towards customer satisfaction can be the difference between relevance and relegation.