Many companies use customer satisfaction surveys of various types and such surveys certainly have a place in any customer sensing strategy. However, it is also important to understand their limitations.
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, but whether they feel the value they received will keep them loyal. Loyalty or repurchase behaviour is the only true measure of customer satisfaction. As tools for measuring the value a company delivers to it’s customers, satisfaction surveys are not very useful because, amongst other reasons, they focus primarily on transactional issues, such as product quality, deliveries, technical knowledge, hygiene factors, product specs etc. These items are simply the minimum requirements for entry into the market. As tools for predicting whether customers will purchase more of the company’s products and services, they have proved to be all but useless.
Many executives feel that “good” scores (e.g. an average of 4 out of 5) are an indication that the company/customer relationship is strong. In other words, a level of satisfaction below complete (5) is acceptable. After all, this is the real world, where products and services are rarely perfect and customers are hard to please.
However, research has shown that there is no direct (straight line) correlation between customer satisfaction and customer loyalty and only customers showing “top box” scores close to 100% are likely to remain loyal.
This may lead to dangerous – perhaps fatal – responses from management. For example, if your company focuses it’s improvement efforts on dissatisfied customers with low scores, assuming that customers with higher scores are happy and will remain loyal, it could have some major shocks in store when apparently satisfied customers defect.
Satisfaction surveys are a far less accurate test of satisfaction than actual buyer behaviour. In business after business, research has shown that 60 to 80% of customers who defected had said on a survey just before defecting that they were satisfied or very satisfied. 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, but only 40 percent come back for another purchase!
So , even though the results of customer satisfaction surveys are a useful indicator of the health of the business, relying solely on them can be fatal. They can generate valuable information that enables a 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 customers’ desire. However, they cannot provide the breadth and depth of information about customers needed to guide your company’s strategy or product innovation process. Surveys alone will not enable any company to fend off competitors or keep products and services attuned to customers’ changing needs. 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.
The Customer Satisfaction Trap - To learn more about this author, visit Peter Gilbert's Website.
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Are your sales where you want them to be? Will you be one of the few who achieves sales success or one of the many who have failed to change? So what are you doing to change those results? Let’s be honest, with companies moving globally and at lightening speeds, the traditional business solutions are outdated and dead. My approach moves your business out of its comfort zone and secures your competitive advantage now. If you are seeking to increase sales, build customer loyalty, create a culture of great attitudes or just achieve some sleep filled nights, then we should talk because my clients have experienced exactly those types of results. Learn more about customer loyalty at http://www.processspecialist.com/customer-loyalty.htm Give me a call at 219.759.5601 for a free strategy session. P.S. If you are seeking a motivational speaker, sales trainer or small business expert that will leave your audience smiling and remembering, please feel free to contact me at 219.759.5601. - Visit Leanne Hoagland-Smith's Website |
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Vwodek Wojczynski
Business Coach and Consultant Vwodek Wojczynski (pronounced Voy-chin-ski) brings fun, awareness, accountability and fresh perspectives based on his diverse experiences in life and business.
Born in Poland and educated in Greece and Canada, he is trilingual with 8 years experience in business development with clients in Canada, USA, Switzerland and Poland.
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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
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