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Customer Satisfaction

Why Measure Customer Satisfaction?

By Rick Crandall, for Hostedware Corporation

Most companies say they believe in great customer service, but few set up a system to insure that they provide it. Delivering great service takes both understanding what your customers want and a way to see that they receive it. Many firms put effort and expense into areas that clients don't care about. Those areas that customers rate low and have high impact on customers are where you will show the biggest gains in improvement.

It is beyond the scope of this article to tell you how to deliver great service to your customers. However, we can show you how to find out what your customers think is great service and why it is worth your while to gather that knowledge.

Delighted Customers Are Profitable
It's widely accepted that it is at least five times more profitable to sell to an existing customer than to find a new customer. More important, the difference between satisfied customers and very satisfied customers can make a big difference in customer repeat business and your profits. For instance, Xerox found that customers who rated them a 5 instead of a 4 on a 5-point satisfaction scale were six times more likely to buy more products! This means, first, that measuring client satisfaction is very important, and, second, that distinguishing between degrees of satisfaction is crucial.

Measuring Customer Satisfaction
There are several ways to gather input from customers. The simplest way to find out how customers feel and what they want is to ask them. If you have only 20 clients, you can talk to each one personally. The advantage of this approach is that you'll get a personal "feel" for each customer. The disadvantage is that you'll gather different information from each customer depending on how the conversation goes.

Focus Groups
Focus groups are good ways to get informal input from a group of customers or prospects. You bring in 5-10 customers or prospects and ask them questions or have them react to material. You can pay a professional facilitator and videotape the whole session, or just lead an informal discussion yourself. In either case, you have a chance to gather ideas about customer needs, reactions to your company, suggestions for new services, and so forth. In addition to individual responses, you get ideas that develop as the group reacts to each other's responses.

Client Advisory Groups
One way to get regular input from customers is to put together an advisory group. This can act like a focus group, but is set up to provide input over time. You may pay members, or simply buy them dinner every quarter. If you create a good group, members may also enjoy meeting and interacting with each other.

There are many benefits to such groups. They give you a source of input from the customer viewpoint. They provide a sounding board for specific questions. They enhance your relationship with good customers who become more committed to your success. And they can move relationships with prospects ahead.

Advisory boards are a much underused way to improve customer service, develop new services, and encourage repeat business. Even the smallest businesses can use them effectively.

Client Surveys
Customer surveys with standardized questions insure that you will collect the same information from everyone. The simplest possible survey is described in the book Marketing Your Services: For People Who Hate to Sell. The author recommends a three-item survey, simply asking "What did/do you like about working with me?", "What did/do you dislike about it?", and "Is there anything else you can tell me that would help me provide better service?". Such a brief survey can help open a dialog, but to collect more detailed information, you need to ask more questions.

Remember that few of your clients will be interested in "filling out a questionnaire". It's work for them without much reward. By casting any survey as an attempt to find out "how we can serve you better" -- in other words as an attempt to improve customer service --your clients will feel less put upon. And, as will be discussed further, if you are sincere about making great service a center point of your firm, your staff will also feel good about collecting information.

Even for a big survey, you should contact your most important clients personally. You might do that before contacting others. Ask for their suggestions. This way, their input can help you determine what type of questions to ask others. And your big accounts might be flattered to be asked to help set the agenda. Have a conversation, not an interrogation. Don't make them feel like they're filling out a survey.

The Phone
Up to about 10 minutes of questions can be done on the phone. By speaking directly with people, you have the flexibility to talk with them. Again, this is more desirable than a questionnaire, especially with larger clients. But, of course, it takes more of your time.

Written Surveys
On a longer survey, here are a few of the possible dimensions you could measure:

• quality of service
• speed of service
• pricing
• complaints or problems
• trust in your firm members
• closeness of relationship with contacts in your firm
• types of other services needed
• percent of business you receive from your clients
• your positioning in clients' minds

If you're just starting a business, you may want to gather information about your expected competitors. This can help you position yourself while you're making initial contact with prospective clients.

You should involve your staff and clients in designing a questionnaire. The odds are that once you start discussing questions with staff and clients, you will come up with more than you should ask. If you have a big client list and lots of questions to ask, split your survey. Ask half the questions to half your clients and half to the other. To get more sophisticated, randomly assign clients to versions of the questionnaire and have a few questions that overlap both groups which will give you an estimate of similarity between the halves (reliability).

You can also share some of the results back with clients, which allows you to discuss important issues further.

Email / Your Web Site
If you have a simple, brief survey, email can be the way to go. Clients can either respond directly on a form you provide, or link to your web site to fill out the survey.

Rick Crandall, PhD (www.rickcrandall.com), is an author and consultant specializing in sales, marketing, and customer service for trade associations, the service industries and professions, and other business groups.

Hostedware Corporation is a pioneer in providing online software solutions for research, education and performance improvement. Hosted Survey and Hosted Test are used by human resources professionals, market researchers, education and training organizations and membership associations worldwide.

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