Are Customer Satisfaction Surveys a Waste of Money
Are Customer Satisfaction Surveys a Waste of Money
Why use surveys?
“Getting as many managers out of the shop and talking to customers is the best research method a company can employ. It often seems to me that the conclusions reached after performing a lot of market research could have been reached by using common sense”
Regis McKenna
In 1965 The Rolling Stones echoed the feeling of many consumers when they lamented that they “couldn’t get no satisfaction” even though they “tried and tried and tried”. As businesses have felt the heat of competition and come to understand the economics of customer loyalty there has been a logical and understandable quest for a measurement system that will provide useful insights and information about customers’ wants and needs, their feelings about their suppliers and their future loyalty or re-purchase behaviour. However customer satisfaction surveys have been found wanting in many respects and, as Professor Robert Shaw observes: -
Basic (And Erroneous) Assumptions About Customer Satisfaction Surveys
1. Surveys tell companies that their customers are satisfied.
This might be true if the company definitely knew that the questions on the survey actually related to what customers really wanted. Do they? Where do survey questions come from? All too often, questions are developed without any customer involvement and typically reflect what the supplier believes his customers think is important. To complicate matters further, questions such as: “Overall, how satisfied are you with …..” may give an indication of a customer’s general satisfaction level, but provide absolutely no indication of the causes of satisfaction or dissatisfaction.
2. Removing sources of dissatisfaction will make customers more satisfied.
Many management teams institute corrective action systems to root out the causes of customer dissatisfaction and thus enhance customer loyalty. Clearly, these things need to be done, but they are no guarantee of customer satisfaction or loyalty. Think about it from a married male’s point of view. If he suddenly lets his wife control the TV remote: starts putting the toilet seat down: puts his socks and underwear in the laundry basket and asks for directions when he is lost. Would his wife be more satisfied? Probably, she would only be less dissatisfied. These items are all dissatisfiers – not the real satisfiers on which a sound relationship is based. Too few customer satisfaction surveys look for the real sources of value that are the drivers of true satisfaction and loyalty.
3. Surveys tell you what to improve
If assumptions 1 and 2 are wrong, then assumption number 3 has major problems. If a PC manufacturer is getting low scores on certain questions in his survey, the natural response is to try to improve these factors. But what if the customers don’t care about these things? If the customers rate the PC a 4 (satisfied) on the question (easy to operate), what would it take to rate a 5 (very satisfied)? Do all the customers understand “easy to operate” the same way? Consequently, surveys rarely reveal specific ways in which to improve customer satisfaction.
Too often we meet managers who are thrilled with their survey results, proudly stating that “each operating division is scoring at least 4,0 on a five point scale”. However if you ask questions such as – “How do these measures link to bottom line performance?” – “What exactly do you have to do to do better?” – “What does each division have to do to rate a 5?” – “Why are some divisions rating 4,7, while others are just at 4,2?” Usually, they have no idea.
4. If 85% of the customers are satisfied, the business is doing well.
This is a very dangerous assumption, since it may lead to potentially fatal responses from management. For example, if management focus on dissatisfied customers with low scores, assuming that customers with higher scores are happy, it could have some major shocks when apparently happy customers defect.
“The only meaningful measure of satisfaction in this industry is repurchase loyalty”
Dave Illingworth
GM Lexus USA
Satisfaction surveys are a far less accurate test of satisfaction than actual buyer behaviour. Research has repeatedly shown that 60 – 80% of customers who defected had said on a survey immediately prior to defecting that they were satisfied or very satisfied. In the USA, most motor manufacturers have followed the customer satisfaction survey route and invest heavily in the approach. The result? Ninety percent of their customers claim to be satisfied or very satisfied, but only 35 – 40% come back for another purchase! A similar situation exists in South Africa.
5. Customer satisfaction equals customer loyalty
In the article “Why satisfied customers defect” Thomas Jones and Earl Sasser points out
A study conducted by Xerox, found that totally satisfied customers were six times more likely to repurchase Xerox products than satisfied customers. Similarly, a study on retail banking depositors found that completely satisfied customers were nearly 42% more likely to be loyal than merely satisfied customers.
Interpreting Levels of Satisfaction
Response Description Loyalty
5 Very satisfied Very loyal
3 – 4 Satisfied Easily switched to a competitor
1 – 2 Dissatisfied Very disloyal
Jones and Sasser
“Why satisfied customers defect”
6. The right people are being surveyed
Most surveys focus on “the customer”, but the situation is often not that simple. Who mows your lawn? You, your spouse, your teenage son or your Malawian gardener? Should the company survey the person who bought the mower, the person who uses the mower or both? Will their priorities be the same? In the business-to-business arena, do you survey the product/service user, the buyer, the CEO, the QA manager, the marketing manager or the personnel manager? They are likely to have totally different needs and different views. Should you ask them the same questions? Consider a medical aid scheme. Should it survey the insurance broker who sells the policy, the employer who pays for the policy, the employer’s benefits administrator, the employee or the employee’s sick spouse?
A further dimension to this issue is focusing on those desirable customers who will be sources of revenues and profits in the long-term. Customers typically fall into one of two broad categories: the “right” customers, or target group, whom the company should be able to serve well and profitably and the “wrong” customers, whose needs it cannot profitably serve. Having the “wrong” customers is the result of a flawed process for attracting or obtaining customers. Any company that strives to retain difficult-to-serve, chronically unhappy and, inherently disloyal customers is making an expensive long-term mistake. Such customers will continually absorb a disproportionate amount of the company’s resources and impact the morale of employees. Clearly, continuously surveying such customers is unlikely to yield any benefits.
Tools for Listening To Customers
• Focus Groups • Customer contact logs
• Plant visits • Joint planning sessions
• Debriefing frontline staff • Face-to-face discussions
• Trade shows • Mystery shoppers
• Customer panels • Win/loss debriefings
• Toll-free numbers • Telephone/mail surveys
The Usefulness of Customer Satisfaction Surveys
So, even though customer satisfaction surveys do have their limitations, they can be a useful indicator of the overall health of the business. They can generate useful information that enables the company to compare one region or business unit with another. They can provide leading indicators of market shifts and can provide some sense of product or service attributes that customer’s desire. However they cannot provide the breadth and depth of information about customers needed to guide your company’s strategy or product innovation process. For this reason, we recommend that any market-oriented company use a variety of tools and methods to listen to customers, potential customers and former customers in building relationships and forming strategies for creating and delivering value.
Problems with Customer Satisfaction Surveys
• The wrong people are surveyed
• The wrong questions are asked
• Questions are asked the wrong way
• Questions are asked at the wrong time
• Satisfaction and dissatisfaction are assumed to be equally important
• Non-customers and ex-customers are not included
• Surveys are conducted for the wrong reasons
• Results are assumed to apply to all markets/customers
• Surveys are used when other methods are more appropriate
• The results do not drive improvement actions
• No link is made between satisfaction/loyalty/profitability
• Results are not compared to competitors
• The relative importance of attributes is not assessed
• Customers see no response to surveys and hence no benefit
• Surveys focus on suppliers’ needs, not customers’ needs
Customer satisfaction surveys that ask the right questions of the right people at the right time (after determining what customers want and designing the product or service accordingly) can be an effective and useful component of a customer sensing strategy. However, many surveys are poorly designed and executed and are a monumental waste of time, energy and money.
Are Customer Satisfaction Surveys a Waste of Money - To learn more about this author, visit Peter Gilbert's Website.
Like this article? Share it with your friends
Customer satisfaction surveys are definitely in! Regardless of where you go or what you buy, the chances are that you will be asked to fill in a form to indicate your level of satisfaction with the product or service. Hotels, restaurants, fast food outlets, car rental companies and motor dealerships are all on the bandwagon. And we customers should be pleased that our suppliers are taking such a laudable interest in our welfare. With all this focus on customers, one would expect to observe a huge outbreak of brilliant customer service and awesome products in the marketplace. Sadly, this isn’t the case. My Mercedes dealership is still the same ineffectual, unreliable, unresponsive clod he was three years ago. All the surveys and irritating telephone calls have not made one iota of difference. So what is the problem?
Why use surveys?
“Getting as many managers out of the shop and talking to customers is the best research method a company can employ. It often seems to me that the conclusions reached after performing a lot of market research could have been reached by using common sense”
Regis McKenna
In 1965 The Rolling Stones echoed the feeling of many consumers when they lamented that they “couldn’t get no satisfaction” even though they “tried and tried and tried”. As businesses have felt the heat of competition and come to understand the economics of customer loyalty there has been a logical and understandable quest for a measurement system that will provide useful insights and information about customers’ wants and needs, their feelings about their suppliers and their future loyalty or re-purchase behaviour. However customer satisfaction surveys have been found wanting in many respects and, as Professor Robert Shaw observes: -
Basic (And Erroneous) Assumptions About Customer Satisfaction Surveys
1. Surveys tell companies that their customers are satisfied.
This might be true if the company definitely knew that the questions on the survey actually related to what customers really wanted. Do they? Where do survey questions come from? All too often, questions are developed without any customer involvement and typically reflect what the supplier believes his customers think is important. To complicate matters further, questions such as: “Overall, how satisfied are you with …..” may give an indication of a customer’s general satisfaction level, but provide absolutely no indication of the causes of satisfaction or dissatisfaction.
2. Removing sources of dissatisfaction will make customers more satisfied.
Many management teams institute corrective action systems to root out the causes of customer dissatisfaction and thus enhance customer loyalty. Clearly, these things need to be done, but they are no guarantee of customer satisfaction or loyalty. Think about it from a married male’s point of view. If he suddenly lets his wife control the TV remote: starts putting the toilet seat down: puts his socks and underwear in the laundry basket and asks for directions when he is lost. Would his wife be more satisfied? Probably, she would only be less dissatisfied. These items are all dissatisfiers – not the real satisfiers on which a sound relationship is based. Too few customer satisfaction surveys look for the real sources of value that are the drivers of true satisfaction and loyalty.
3. Surveys tell you what to improve
If assumptions 1 and 2 are wrong, then assumption number 3 has major problems. If a PC manufacturer is getting low scores on certain questions in his survey, the natural response is to try to improve these factors. But what if the customers don’t care about these things? If the customers rate the PC a 4 (satisfied) on the question (easy to operate), what would it take to rate a 5 (very satisfied)? Do all the customers understand “easy to operate” the same way? Consequently, surveys rarely reveal specific ways in which to improve customer satisfaction.
Too often we meet managers who are thrilled with their survey results, proudly stating that “each operating division is scoring at least 4,0 on a five point scale”. However if you ask questions such as – “How do these measures link to bottom line performance?” – “What exactly do you have to do to do better?” – “What does each division have to do to rate a 5?” – “Why are some divisions rating 4,7, while others are just at 4,2?” Usually, they have no idea.
4. If 85% of the customers are satisfied, the business is doing well.
This is a very dangerous assumption, since it may lead to potentially fatal responses from management. For example, if management focus on dissatisfied customers with low scores, assuming that customers with higher scores are happy, it could have some major shocks when apparently happy customers defect.
“The only meaningful measure of satisfaction in this industry is repurchase loyalty”
Dave Illingworth
GM Lexus USA
Satisfaction surveys are a far less accurate test of satisfaction than actual buyer behaviour. Research has repeatedly shown that 60 – 80% of customers who defected had said on a survey immediately prior to defecting that they were satisfied or very satisfied. In the USA, most motor manufacturers have followed the customer satisfaction survey route and invest heavily in the approach. The result? Ninety percent of their customers claim to be satisfied or very satisfied, but only 35 – 40% come back for another purchase! A similar situation exists in South Africa.
5. Customer satisfaction equals customer loyalty
In the article “Why satisfied customers defect” Thomas Jones and Earl Sasser points out
A study conducted by Xerox, found that totally satisfied customers were six times more likely to repurchase Xerox products than satisfied customers. Similarly, a study on retail banking depositors found that completely satisfied customers were nearly 42% more likely to be loyal than merely satisfied customers.
Interpreting Levels of Satisfaction
Response Description Loyalty
5 Very satisfied Very loyal
3 – 4 Satisfied Easily switched to a competitor
1 – 2 Dissatisfied Very disloyal
Jones and Sasser
“Why satisfied customers defect”
6. The right people are being surveyed
Most surveys focus on “the customer”, but the situation is often not that simple. Who mows your lawn? You, your spouse, your teenage son or your Malawian gardener? Should the company survey the person who bought the mower, the person who uses the mower or both? Will their priorities be the same? In the business-to-business arena, do you survey the product/service user, the buyer, the CEO, the QA manager, the marketing manager or the personnel manager? They are likely to have totally different needs and different views. Should you ask them the same questions? Consider a medical aid scheme. Should it survey the insurance broker who sells the policy, the employer who pays for the policy, the employer’s benefits administrator, the employee or the employee’s sick spouse?
A further dimension to this issue is focusing on those desirable customers who will be sources of revenues and profits in the long-term. Customers typically fall into one of two broad categories: the “right” customers, or target group, whom the company should be able to serve well and profitably and the “wrong” customers, whose needs it cannot profitably serve. Having the “wrong” customers is the result of a flawed process for attracting or obtaining customers. Any company that strives to retain difficult-to-serve, chronically unhappy and, inherently disloyal customers is making an expensive long-term mistake. Such customers will continually absorb a disproportionate amount of the company’s resources and impact the morale of employees. Clearly, continuously surveying such customers is unlikely to yield any benefits.
Tools for Listening To Customers
• Focus Groups • Customer contact logs
• Plant visits • Joint planning sessions
• Debriefing frontline staff • Face-to-face discussions
• Trade shows • Mystery shoppers
• Customer panels • Win/loss debriefings
• Toll-free numbers • Telephone/mail surveys
The Usefulness of Customer Satisfaction Surveys
So, even though customer satisfaction surveys do have their limitations, they can be a useful indicator of the overall health of the business. They can generate useful information that enables the company to compare one region or business unit with another. They can provide leading indicators of market shifts and can provide some sense of product or service attributes that customer’s desire. However they cannot provide the breadth and depth of information about customers needed to guide your company’s strategy or product innovation process. For this reason, we recommend that any market-oriented company use a variety of tools and methods to listen to customers, potential customers and former customers in building relationships and forming strategies for creating and delivering value.
Problems with Customer Satisfaction Surveys
• The wrong people are surveyed
• The wrong questions are asked
• Questions are asked the wrong way
• Questions are asked at the wrong time
• Satisfaction and dissatisfaction are assumed to be equally important
• Non-customers and ex-customers are not included
• Surveys are conducted for the wrong reasons
• Results are assumed to apply to all markets/customers
• Surveys are used when other methods are more appropriate
• The results do not drive improvement actions
• No link is made between satisfaction/loyalty/profitability
• Results are not compared to competitors
• The relative importance of attributes is not assessed
• Customers see no response to surveys and hence no benefit
• Surveys focus on suppliers’ needs, not customers’ needs
Customer satisfaction surveys that ask the right questions of the right people at the right time (after determining what customers want and designing the product or service accordingly) can be an effective and useful component of a customer sensing strategy. However, many surveys are poorly designed and executed and are a monumental waste of time, energy and money.
Are Customer Satisfaction Surveys a Waste of Money - To learn more about this author, visit Peter Gilbert's Website.
Like this article? Share it with your friends
| |||
 |
No article feedback found. | ||
|
Leave Your Feedback | ||
|
|||
 The Customer Satisfaction Trap
| |||
| Most companies that use satisfaction surveys to learn how happy their customers are with their products and services often mislead themselves. What matters is not what customers say about the level of satisfaction, ... |
|||
|
Take Paid Online Surveys To Make Money At Home
| |||
| When you are in a situation where you would like to make money from home, you will find that paid surveys might be exactly what you are looking for. Paid surveys can be accomplished from your own home, with no train... |
|||
|
Can You Really Make Money with Online Surveys?
| |||
| People have been expressing their opinions since before the written language. In fact, opinions fly whenever people get together. Wouldn't it be great to be paid to voice your opinion? You may have seen surveys on ... |
|||
|
In Search Of The Well Paying Survey Site
| |||
| Interested in making some extra money from your own home? Well, one excellent way to bring in some extra money is by taking paid surveys. Yes, you can actually get paid for your opinion. There are quite a few compan... |
|||
|
Who Is Eligible To Participate In Paid Surveys?
| |||
| When you start taking a look around for easy ways to add to your income, you'll find that one option that is open to you is that of the paid surveys. A paid survey is a great way for someone who can give an honest ... |
|||
| |||
Bernard ReberBack in late 1992, MS Access hit the streets. About that time the company I managed needed new software to handle their growing client base and I decided to try this new product. I had little difficulty writing and adapting a database to suit us and discovered a hidden talent for programming. A business was born. With business studies and 25 years of management experience in three different countries under my belt, I could offer a unique combination of skills and my customers agreed. From these humble beginnings my software 'invoiceit' emerged in 1999 and has since been taken to 49 states (hello Wyoming, won't you join us?), all across Canada and more than 70 other countries. From the very beginning the program included cashbook accounting, the simplest form of keeping financial business records. The Dictionary.com defines 'cashbook' as "A 'book' in which to record money received and paid out". For 'book' substitute 'simple software' and that's what I'm about. Now I have published Simple Accounting, an inexpensive spreadsheet solution which even you can master. For just $14.95 it costs less than a takeout meal! More at http://www.scrambled-card.com/simple_accounting_main.htm - Visit Bernard Reber's Website |
|||
|
To learn more about the Evan Elite Author Program please contact us. | |||
 | |
 Peter Gilbert (Visit Peter's Website) Peter began his sales career with Ecolab Inc in South Africa.He spent 14 years with the company in a variety of technical and sales roles, with his final assignment being as CEO of the South African operation. He then founded the South African affiliate of Philip Crosby Associates, and fulfilled the role of Sales Director for 7 years, during which period the company became the largest TQM consultancy in the southern hemisphere. When the Company was bought by Proudfoot Consulting, he assumed the role of Sales Director for three years, before leaving to establish Chally SA, specialising in sales assessment and recruitment
|  |
 |
|
|
 |
|
|
|
 |
| Modeling the Masters: Learn the true secrets behind Walt Disney's business success factors & grow your company! Video produced by Phanta Media |
|
|
 |
| Have you written articles that would be of value to entrepreneurs? Become an expert on our site by publishing them! Expose yourself to a wide audience, drive more traffic to your website and get more sales! Click Here for details. |
 |
 | ||
 |
||
 |
||
 |
||
|
| ||
|
|
|
Get advice & tips from famous business owners, new articles by entrepreneur experts, my latest website updates, & special sneak peaks at what's to come!
|
|
|
 |
 Instant Newsletters Employee Engagment Performance Emotional Intelligence Valley of Death Quadruple Your Business |
|
 | ||
 |
Fortune Hunters
CBC Entrepreneur TV | |
 |
More PR Resources
Press Release Builder | |
| ||
 |
|
|
|
|
|||||||||||||||||||||
 |
|
|
||||||||||
