How to define and deal with Customer Satisfaction?
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Customer Satisfaction: what is it, and how do you achieve it?

 

Wanting to make customers happy seems logical. However, history has shown that customer satisfaction has not always been a special point of focus for businesses. Nowadays, companies are increasingly aware that the backbone their success is Customer Satisfaction. Happy customers mean loyal customers and increased business. What strategies, then, can guarantee your products and services live up to your customers’ expectations?

 

Customer Satisfaction: a definition

Before tackling how customer should be measured and analysed, let’s start with a brief definition of the concept at hand. Customer satisfaction can be defined as the customer’s feelings or attitudes towards a product, a firm or a service provided by a company. Satisfaction is created when the customer’s needs or expectations are met. A number of factors come into play here, some tangible (e.g.: product quality, swiftness of delivery, etc.), others intangible (e.g.: your staff’s behaviour towards customers).

 

Focus on Customer Satisfaction: the origin

While customer satisfaction is on every marketeer’s lips, it has not always been a point of focus in business. To understand how this interest in customers’ opinions started, let’s go back to the Industrial Revolution (1820-1840). Before the Industrial Revolution, goods and services were provided by small, independent businesses. Production costs were higher because goods could not be mass-produced (Encyclopedias). As a consequence, consumers had to pay heavy prices for products, making them accessible to only a small minority. With the introduction of mass-production and economies of scale, goods were produced faster and, most importantly, cheaper, thereby resulting in more attractive prices and, consequently, meaning companies could target a larger audience (with lower income situations). Perhaps one of the most prominent pioneers of this revolution was Henry Ford, whose Model T car was designed to be affordable for the average American.

From the Industrial Age until the 1980s, companies focused primarily on optimizing production and logistics. It was all about making the best product while reducing production costs to a minimum. In the 1980s, however, this started to change. Companies were able to produce the same products as their competitors for a similar or even cheaper price. Companies’ Unique Selling Proposition (i.e., the factor or consideration presented by a seller as the reason that one product or service is different from and better than that of the competition) were not well defined, sometimes overlapping, making it hard for consumers to identify what made companies providing the same service/products different.

As a result, companies shifted their attention to their customers’ needs in order to find ideas for improving their products or services. This started with paper-based questionnaires (with scanner-based tools) to collect information on their customers’ satisfaction. With the emergence of new technologies and the increasingly widespread use of the Internet, web-based customer satisfaction research made its way into the business market. Customer satisfaction surveys could be done on a larger scale, as data collection became faster and more efficient than ever before.

This, then, posed a new challenge: where to store and how to analyse all these data. The advent and ongoing development of customer relationship management software solutions brought a response to this issue. Over the years, CRM solutions, which are, by definition, 100% customer-centred, have helped companies conduct customer satisfaction surveys, collect the resulting data and analyse them. From paper-based surveys, companies have shifted to online research and, more recently, to mobile research. Nowadays, 7% of all market research has to do with assessing customer satisfaction, making Customer satisfaction one of the largest categories of research (Vision critical).

 

Customer satisfaction and business success

While the history of a customer-centric approach has shown that customer satisfaction was used as a tool by companies to re-define their USP and stand out. But is taking your customers’ opinion into account actually profitable?

In their research paper entitled Customer satisfaction and business performance: a firm‐level analysis, Paul Willians and Earl Naumann, examined whether a correlation between customer satisfaction and the success of a company could be established. On a quarterly basis, they cross-referenced the level of customer satisfaction and a number of financial performance metrics of a firm. Their findings left no room for doubt: “there are significant, and moderate‐to‐strong associations between satisfaction levels and a firm’s financial and market performance. More specifically, there are strong links between customer satisfaction, and retention, revenue, etc.

 

Measuring Customer Satisfaction: the Consistency pattern

How, then, can we ensure our customers are happy? There is a myriad of tips that will help you keep your customers happy. However, according to McKinsey, the one and only key to making your customers happy is consistency. There are three consistency patterns to keep in mind when designing a winning customer loyalty strategy.

 

Consistent NPS surveys

Everyone knows which KPI (key performance indicator) to pick to find out about satisfied and dissatisfied customers: the NPS. The Net Promoter Score is an index that measures the likelihood of your customers recommending your service/product to others. It helps you identify the detractors, passives and promoters of your brand. But when should this powerful tool be used? Before customers place their order? When they buy a product? When it is delivered? Or when it is used? Actually, the right answer is: all of the above. It is important to collect your customers’ opinions at each and every step of the customer journey. You need to set up an NPS survey that follows the entirety of your customer journey. For example, ask customers who have just bought one of your products online what they thought of your e-shop, the security of the payment method or the information provided about the purchase. Then, once customers receive their product, ask them what they thought about the delivery delay, whether the product fits their expectations, etc. Ask customers who have called your technical support if their problem has been solved or if they need further assistance, and so on and so forth. Customers’ behaviours should be assessed throughout the customer journey, not only at individual touchpoints. Why is this so important? As McKinsey points out: “measuring satisfaction on customer journeys is 30 percent more predictive of overall customer satisfaction than measuring happiness for each individual interaction”.

 

Consistent Communication and Service Delivery

Be consistent in your communication, and also in your service delivery.

First, it is paramount you define your Unique Selling Proposition. This will help your company stand out from the crowd and be easily identified by customers. Then, tell your audience about whatever it is that makes you so different. Be consistent and communicate about the same USP across all your communication channels. Lastly, and probably most importantly, keep your promises. Qatar Airway has built its brand image on its quality service with luxurious onboard experience. It has built a consistent communication strategy that highlights this USP at each touchpoint with the customer. However, if the airline has been able to build customer trust, it is above all because it has lived up to its customers’ expectations for service quality by consistently delivering faultless service. It has developed premium travel options (spacious seats, refined cuisine and distinguished crew members) which have helped it reinforced its position as a premium customer-experience airline company.

 

Consistent improvement

If you assess your customer satisfaction on a journey-based approach, be prepared to challenge your existing business processes. Hiding behind the anonymity mobile phones or computers, your customers won’t hold anything back. They know the customer is king and consequently, will not mince their words. Getting feedback from your customers is a valuable source for improvement, but you need to be prepared for change. Whenever you receive a complaint from a dissatisfied customer, take the necessary steps to fix it internally and restore your customer’s satisfaction. However, things don’t end there once the problem is solved, use it to identify the pain points leading to poor customer experiences and fix them. Prepare your staff for change and limit resistance to change.

 

Customer Satisfaction: what to keep in mind

While a customer-centric approach has become not only common-place, but also critical to business success, it has not always been the case. The analysis of customers opinions or behaviours towards brands has helped companies better define their USP to secure their position on the marketplace. CRM solutions have facilitated the logistical aspects of customer satisfaction, but have also, and most importantly, provided means to analyse these data. However, even if advanced CRM software help companies get a glimpse into their customers’ mind, ultimately, it is the responsibility of each individual company to make their customers happy. The key to achieving this is the three consistency patterns: consistency in NPS surveys, consistency in USP communication and service delivery and finally, consistency in the search for product/service improvements.