Customer satisfaction

From Wikipedia, the free encyclopedia

Jump to: navigation, search Customer satisfaction, a term frequently used in marketing, is a measure of how products and services supplied by a company meet or surpass customer expectation. Customer satisfaction is defined as "the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds specified satisfaction goals."[1] In a survey of nearly 200 senior marketing managers, 71 percent responded that they found a customer satisfaction metric very useful in managing and monitoring their businesses.[1] It is seen as a key performance indicator within business and is often part of a Balanced Scorecard. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy.[2] "Within organizations, customer satisfaction ratings can have powerful effects. They focus employees on the importance of fulfilling customers expectations. Furthermore, when these ratings dip, they warn of problems that can affect sales and profitability. . . . These metrics quantify an important dynamic. When a brand has loyal customers, it gains positive word-ofmouth marketing, which is both free and highly effective."[1] Therefore, it is essential for businesses to effectively manage customer satisfaction. To be able do this, firms need reliable and representative measures of satisfaction. "In researching satisfaction, firms generally ask customers whether their product or service has met or exceeded expectations. Thus, expectations are a key factor behind satisfaction. When customers have high expectations and the reality falls short, they will be disappointed and will likely rate their experience as less than satisfying. For this reason, a luxury resort, for example, might receive a lower satisfaction rating than a budget moteleven though its facilities and service would be deemed superior in 'absolute' terms."[1] The importance of customer satisfaction diminishes when a firm has increased bargaining power. For example, cell phone plan providers, such as AT&T and Verizon, participate in an industry that is an oligopoly, where only a few suppliers of a certain product or service exist. As such, many cell phone plan contracts have a lot of fine print with provisions that they would never get away if there were, say, a hundred cell phone plan providers, because customer satisfaction would be way too low, and customers would easily have the option of leaving for a better contract offer. There is a substantial body of empirical literature that establishes the benefits of customer satisfaction for firms.

Contents
[hide]

1 Purpose 2 Construction 3 Methodologies 4 See also 5 References 6 External links

Purpose

A business ideally is continually seeking feedback to improve customer satisfaction. "Customer satisfaction provides a leading indicator of consumer purchase intentions and loyalty." [1] "Customer satisfaction data are among the most frequently collected indicators of market perceptions. Their principal use is twofold:" [1] 1. "Within organizations, the collection, analysis and dissemination of these data send a message about the importance of tending to customers and ensuring that they have a positive experience with the companys goods and services."[1] 2. "Although sales or market share can indicate how well a firm is performing currently, satisfaction is perhaps the best indicator of how likely it is that the firms customers will make further purchases in the future. Much research has focused on the relationship between customer satisfaction and retention. Studies indicate that the ramifications of satisfaction are most strongly realized at the extremes." On a fivepoint scale, "individuals who rate their satisfaction level as '5' are likely to become return customers and might even evangelize for the firm. (A second important metric related to satisfaction is willingness to recommend. This metric is defined as "The percentage of surveyed customers who indicate that they would recommend a brand to friends." When a customer is satisfied with a product, he or she might recommend it to friends, relatives and colleagues. This can be a powerful marketing advantage.) "Individuals who rate their satisfaction level as '1,' by contrast, are unlikely to return. Further, they can hurt the firm by making negative comments about it to prospective customers. Willingness to recommend is a key metric relating to customer satisfaction."[1]

[edit] Construction
Organizations need to retain existing customers while targeting non-customers.[3] Measuring customer satisfaction provides an indication of how successful the organization is at providing products and/or services to the marketplace. "Customer satisfaction is measured at the individual level, but it is almost always reported at an aggregate level. It can be, and often is, measured along various dimensions. A hotel, for example, might ask customers to rate their experience with its front desk and check-in service, with the room, with the amenities in the room, with the restaurants, and so on. Additionally, in a holistic sense, the hotel might ask about overall satisfaction 'with your stay.'"[1] As research on consumption experiences grows, evidence suggests that consumers purchase goods and services for a combination of two types of benefits: hedonic and utilitarian. Hedonic benefits are associated with the sensory and experiential attributes of the product. Utilitarian benefits of a product are associated with the more instrumental and functional attributes of the product (Batra and Athola 1990).[4] Customer satisfaction is an ambiguous and abstract concept and the actual manifestation of the state of satisfaction will vary from person to person and product/service to product/service. The state of satisfaction depends on a number of both psychological and physical variables which correlate with satisfaction behaviors such as return and recommend rate. The level of satisfaction can also vary depending on other options the customer may have and other products against which the customer can compare the organization's products. Work done by Parasuraman, Zeithaml and Berry (Leonard L)[5] between 1985 and 1988 provides the basis for the measurement of customer satisfaction with a service by using the gap between the customer's expectation of performance and their perceived experience of performance. This provides the measurer with a satisfaction "gap" which is objective and quantitative in nature. Work done by Cronin and Taylor propose the "confirmation/disconfirmation" theory of combining the "gap" described by Parasuraman, Zeithaml and Berry as two different measures (perception and expectation of performance) into a single measurement of performance according to expectation. The usual measures of customer satisfaction involve a survey[6] with a set of statements using a Likert Technique or scale. The customer is asked to evaluate each statement and in term of their perception and expectation of performance of the organization being measured. Their satisfaction is generally measured on a five-point scale.

"Customer satisfaction data can also be collected on a 10-point scale."[1]

"Regardless of the scale used, the objective is to measure customers perceived satisfaction with their experience of a firms offerings."[1] It is essential for firms to effectively manage customer satisfaction. To be able do this, we need accurate measurement of satisfaction.[7] Good quality measures need to have high satisfaction loadings, good reliability, and low error variances. In an empirical study comparing commonly used satisfaction measures it was found that two multi-item semantic differential scales performed best across both hedonic and utilitarian service consumption contexts. According to studies by Wirtz & Lee (2003),[8] they identified a six-item 7-point semantic differential scale (e.g., Oliver and Swan 1983), which is a six-item 7-point bipolar scale, that consistently performed best across both hedonic and utilitarian services. It loaded most highly on satisfaction, had the highest item reliability, and had by far the lowest error variance across both studies. In the study,[8] the six items asked respondents evaluation of their most recent experience with ATM services and ice cream restaurant, along seven points within these six items: please me to displeased me, contented with to disgusted with, very satisfied with to very dissatisfied with, did a good job for me to did a poor job for me, wise choice to poor choice and happy with to unhappy with. A semantic differential (4 items) scale (e.g., Eroglu and Machleit 1990),[9] which is a fouritem 7-point bipolar scale, was the second best performing measure, which was again consistent across both contexts. In the study, respondents were asked to evaluate their experience with both products, along seven points within these four items: satisfied to dissatisfied, favorable to unfavorable, pleasant to unpleasant and I like it very much to I didnt like it at all.[8] The third best scale was single-item percentage measure, a one-item 7-point bipolar scale (e.g., Westbrook 1980).[10] Again, the respondents were asked to evaluate their experience on both ATM services and ice cream restaurants, along seven points within delighted to terrible.[8] It seems that dependent on a trade-off between length of the questionnaire and quality of satisfaction measure, these scales seem to be good options for measuring customer satisfaction in academic and applied studies research alike. All other measures tested consistently performed worse than the top three measures, and/or their performance varied significantly across the two service contexts in their study. These results suggest that more careful pretesting would be prudent should these measures be used.[8] Finally, all measures captured both affective and cognitive aspects of satisfaction, independent of their scale anchors.[8] Affective measures capture a consumers attitude (liking/disliking) towards a product, which can result from any product information or experience. On the other hand, cognitive element is defined as an appraisal or conclusion on how the products performance compared against expectations (or exceeded or fell short of expectations), was useful (or not useful), fit the situation (or did not fit), exceeded the requirements of the situation (or did not exceed).[11]

[edit] Methodologies
American Customer Satisfaction Index (ACSI) is a scientific standard of customer satisfaction. Academic research has shown that the national ACSI score is a strong predictor of Gross Domestic Product (GDP) growth, and an even stronger predictor of Personal Consumption Expenditure (PCE) growth. On the microeconomic level, academic studies have shown that ACSI data is related to a firm's financial performance in terms of return on investment (ROI), sales, long-term firm value (Tobin's q), cash flow, cash flow volatility, human capital performance, portfolio returns, debt financing, risk, and consumer spending.[12] Increasing ACSI scores has been shown to predict loyalty, word-of-mouth recommendations, and purchase behavior. The ACSI measures customer satisfaction annually for more than 200 companies in 43 industries and 10 economic sectors. In addition to quarterly reports, the ACSI methodology can be applied to private sector companies and government agencies in order to improve loyalty and purchase intent. Two companies have been licensed to apply the methodology of the ACSI for both the private and public sector: CFI Group, Inc. and Foresee Results apply the ACSI to websites and other online initiatives. ASCI scores have also been calculated by independent researchers, for example, for the mobile phones sector,[13] higher education,[14] and electronic mail.[15] The Kano model is a theory of product development and customer satisfaction developed in the 1980s by Professor Noriaki Kano that classifies customer preferences into five categories: Attractive, One-Dimensional, Must-Be, Indifferent, Reverse. The Kano model offers some insight into the product attributes which are perceived to be important to customers. SERVQUAL or RATER is a service-quality framework that has been incorporated into customer-satisfaction surveys (e.g., the revised Norwegian Customer Satisfaction Barometer[16]) to indicate the gap between customer expectations and experience. J.D. Power and Associates provides another measure of customer satisfaction, known for its top-box approach and automotive industry rankings. J.D. Power and Associates' marketing research consists primarily of consumer surveys and is publicly known for the value of its product awards. Other research and consulting firms have customer satisfaction solutions as well. These include A.T. Kearney's Customer Satisfaction Audit process,[17] which incorporates the Stages of Excellence framework and which helps define a companys status against eight critically identified dimensions. For Business to Business (B2B) surveys there is the InfoQuest box.[18] This has been used internationally since 1989 on more than 110,000 surveys (Nov '09) with an average response rate of 72.74%. The box is targeted at "the most important" customers and avoids the need for a blanket survey. In the European Union member states, many methods for measuring impact and satisfaction of e-government services are in use, which the eGovMoNet project sought to compare and harmonize.[19]

These customer satisfaction methodologies have not been independently audited by the Marketing Accountability Standards Board (MASB) according to MMAP (Marketing Metric Audit Protocol).

Business case
From Wikipedia, the free encyclopedia

Jump to: navigation, search A business case captures the reasoning for initiating a project or task. It is often presented in a well-structured written document, but may also sometimes come in the form of a short verbal argument or presentation. The logic of the business case is that, whenever resources such as money or effort are consumed, they should be in support of a specific business need. An example could be that a software upgrade might improve system performance, but the "business case" is that better performance would improve customer satisfaction, require less task processing time, or reduce system maintenance costs. A compelling business case adequately captures both the quantifiable and unquantifiable characteristics of a proposed project. Business cases can range from comprehensive and highly structured, as required by formal project management methodologies, to informal and brief. Information included in a formal business case could be the background of the project, the expected business benefits, the options considered (with reasons for rejecting or carrying forward each option), the expected costs of the project, a gap analysis and the expected risks. Consideration should also be given to the option of doing nothing including the costs and risks of inactivity. From this information, the justification for the project is derived. Note that it is not the job of the project manager to build the business case, this task is usually the responsibility of stakeholders and sponsors.[1]

Contents
[hide]

1 Review 2 Formal business cases o 2.1 Objectives o 2.2 Generating a business case 3 Public sector projects 4 See also 5 Notes 6 References

[edit] Review
At various stages in the project, the business case should be reviewed to ensure that:

The justification is still valid, The project will deliver the solution to the business need.

The result of a review may be the termination or amendment of the project. The business case may also be subject to amendment if the review concludes that the business need has abated or changed, this will have a knock on effect on the project.

[edit] Formal business cases

Formal business cases are evaluated to ensure:

the investment has value and importance the firm has the capability to deliver the benefits the firms dedicated resources are working on the highest value opportunities projects with inter-dependencies are undertaken in the optimum sequence.

[edit] Objectives
The business case process should be designed to be:

adaptable - tailored to the size and risk of the proposal consistent - the same basic business issues are addressed by every project business oriented - concerned with the business capabilities and impact, rather than having a technical focus comprehensive - includes all factors relevant to a complete evaluation understandable - the contents are clearly relevant, logical and, although demanding, are simple to complete and evaluate

measurable - all key aspects can be quantified so their achievement can be tracked and measured transparent - key elements can be justified directly accountable - accountabilities and commitments for the delivery of benefits and management of costs are clear.

The principal purposes of the formal business case process are:

introduce a way of thinking that causes people with the authority to recommend projects to firstly consider their value, risk and relative priority as a fundamental element of submitting the project proposal require those proposing a project to justify its value to the firm and to self-cull any proposals that are not of demonstrable value enable management to determine if the project proposed is of value to the business and achievable compared to the relative merits of alternative proposals. enable management to objectively measure the subsequent achievement of the business cases benefits.

[edit] Generating a business case

Development of the business case should not be mechanical. Indeed, the case must demonstrate that the issues have been thought through, the full benefits will be realized on time, any technical aspects have been thoroughly evaluated and cost, and track and measure their achievement. In general, the process of developing a business case involves financial decomposition, opportunity identification, opportunity qualification, benefit validation, and finally finalization of the business case.[2] A business case should contain some or all of the following information types (depending on the size, timing, scale and availability of information):

Reference - project name/reference, origins/background/current state Context - business objectives/opportunities, business strategic alignment (priority) Value proposition - desired business outcomes, outcomes roadmap, business benefits (by outcome), quantified benefits value, costs/ROI financial scenarios, risks/costs of not proceeding, project risks (to project, benefits and business) Focus - problem/solution scope, assumptions/constraints, options identified/evaluated, size, scale and complexity assessment Deliverables - outcomes, deliverables and benefits planned, organizational areas impacted (internally and externally), key stakeholders, dependencies Workload - approach, phase/stage definitions (project (change) activities, technical delivery activities, workload estimate/breakdown, project plan and schedule, critical path) Required resources - project leadership team, project governance team, team resources, funding Commitments (required) - Project controls, reporting processes, deliverables schedule, financial budget/schedule

[edit] Public sector projects

Many public sector projects are now required to justify their need through a business case. In the public sector, the business case is argued in terms of cost/benefit analysis, which may include both financial and non-financial cost and benefits. This allows the business to take into account, for example, societal benefits.

[edit] See also

Business plan Case competition Innovation Optimism bias Planning fallacy Reference class forecasting Win-win

[edit] Notes
1. ^ Building a Projects Business Case PM Hut, 8 January 2009 2. ^ Business Case Development Toolkit (with Excel model)

[edit] References

Bentley, Colin; Practical Prince2 (The Stationery Office), ISBN 0-11-702853-3. Five elements to include in a compelling business case OGC Guidance and templates on 'Business Case' Schaltegger, S. & Wagner, M. (Eds.): Managing the Business Case for Sustainability. The Integration of Social, and Economic Performance. Sheffield: Greenleaf, 2006

Customer Satisfaction in 7 Steps

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By Adrian Thompson | February 11, 2002 | Business 2 Its a well known fact that no business can exist without customers. In the business of Website design, its important to work closely with your customers to make sure the site or system you create for them is as close to their requirements as you can manage. Because its critical that you form a close working relationship with your client, customer service is of vital importance. What follows are a selection of tips that will make your clients feel valued, wanted and loved.

1. Encourage Face-to-Face Dealings

This is the most daunting and downright scary part of interacting with a customer. If youre not used to this sort of thing it can be a pretty nerve-wracking experience. Rest assured, though, it does get easier over time. Its important to meet your customers face to face at least once or even twice during the course of a project. My experience has shown that a client finds it easier to relate to and work with someone theyve actually met in person, rather than a voice on the phone or someone typing into an email or messenger program. When you do meet them, be calm, confident and above all, take time to ask them what they need. I believe that if a potential client spends over half the meeting doing the talking, youre well on your way to a sale.

2. Respond to Messages Promptly & Keep Your Clients Informed

This goes without saying really. We all know how annoying it is to wait days for a response to an email or phone call. It might not always be practical to deal with all customers queries within the space of a few hours, but at least email or call them back and let them know youve received their message and youll contact them about it as soon as possible. Even if youre not able to solve a problem right away, let the customer know youre working on it. A good example of this is my Web host. Theyve had some trouble with server hardware which has caused a fair bit of downtime lately. At every step along the way I was emailed and told exactly what was going on, why things were going wrong, and how long it would be before they were working again. They also apologised repeatedly, which was nice. Now if they server had just gone down with no explanation I think Id have been pretty annoyed and may have moved my business elsewhere. But because they took time to keep me informed, it didnt seem so bad, and I at least knew they were doing something about the problems. That to me is a prime example of customer service.

3. Be Friendly and Approachable

A fellow SitePointer once told me that you can hear a smile through the phone. This is very true. Its very important to be friendly, courteous and to make your clients feel like youre their friend and youre there to help them out. There will be times when you want to beat your clients over the head repeatedly with a blunt object it happens to all of us. Its vital that you keep a clear head, respond to your clients wishes as best you can, and at all times remain polite and courteous.

4. Have a Clearly-Defined Customer Service Policy

This may not be too important when youre just starting out, but a clearly defined customer service policy is going to save you a lot of time and effort in the long run. If a customer has a problem, what should they do? If the first option doesnt work, then what? Should they contact different people for billing and technical enquiries? If theyre not satisfied with any aspect of your customer service, who should they tell? Theres nothing more annoying for a client than being passed from person to person, or not knowing who to turn to. Making sure they know exactly what to do at each stage of their enquiry should be of utmost importance. So make sure your customer service policy is present on your site and anywhere else it may be useful.

5. Attention to Detail (also known as The Little Niceties)

Have you ever received a Happy Birthday email or card from a company you were a client of? Have you ever had a personalised sign-up confirmation email for a service that you could tell was typed from scratch? These little niceties can be time consuming and arent always cost effective, but remember to do them. Even if its as small as sending a Happy Holidays email to all your customers, its something. It shows you care; it shows there are real people on the other end of that screen or telephone; and most importantly, it makes the customer feel welcomed, wanted and valued.

6. Anticipate Your Clients Needs & Go Out Of Your Way to Help Them Out
Sometimes this is easier said than done! However, achieving this supreme level of understanding with your clients will do wonders for your working relationship. Take this as an example: youre working on the front-end for your clients exciting new ecommerce endeavour. You have all the images, originals and files backed up on your desktop computer and the site is going really well. During a meeting with your client he/she happens to mention a hard-copy brochure their internal marketing people are developing. As if by magic, a couple of weeks later a CD-ROM arrives on their doorstep complete with high resolution versions of all the images youve used on the site. A note accompanies it which reads: "Hi, you mentioned a hard-copy brochure you were working on and I wanted to provide you with large-scale copies of the graphics Ive used on the site. Hopefully youll be able to make use of some in your brochure." Your client is heartily impressed, and remarks to his colleagues and friends how very helpful and considerate his Web designers are. Meanwhile, in your office, you lay back in your chair drinking your 7th cup of coffee that morning, safe in the knowledge this happy customer will send several referrals your way.

7. Honour Your Promises

Its possible this is the most important point in this article. The simple message: when you promise something, deliver. The most common example here is project delivery dates. Clients dont like to be disappointed. Sometimes, something may not get done, or you might miss a deadline through no fault of your own. Projects can be late, technology can fail and sub-contractors dont always deliver on time. In this case a quick apology and assurance itll be ready ASAP wouldnt go amiss.

Conclusion

Customer service, like any aspect of business, is a practiced art that takes time and effort to master. All you need to do to achieve this is to stop and switch roles with the customer. What would you want from your business if you were the client? How would you want to be treated? Treat your customers like your friends and theyll always come back.

Measuring Managing Customer Satisfaction

and
It takes continuous effort to maintain high customer satisfaction levels. ________________________
by Kevin Cacioppo

As markets shrink, companies are scrambling to boost customer satisfaction and keep their current customers rather than devoting additional resources to chase potential new customers. The claim that it costs five to eight times as much to get new customers than to hold on to old ones is key to understanding the drive toward benchmarking and tracking customer satisfaction. "The gulf between satisfied customers and completely satisfied customers can swallow a business."

Measuring customer satisfaction is a relatively new --Harvard Business Review, concept to many companies that have been focused exclusively on income statements and balance sheets. November/December 1995 Companies now recognize that the new global economy has changed things forever. Increased competition, crowded markets with little product differentiation and years of continual sales growth followed by two decades of flattened sales curves have indicated to today's sharp competitors that their focus must change. Competitors that are prospering in the new global economy recognize that meas-uring customer satisfaction is key. Only by doing so can they hold on to the customers they have and understand how to better attract new customers. The competitors who will be successful recognize that customer satisfaction is a critical strategic weapon that can bring increased market share and increased profits. The problem companies face, however, is exactly how to do all of this and do it well. They need to understand how to quantify, measure and track customer satisfaction. Without a clear and accurate sense of what needs to be measured and how to collect, analyze and use the data as a strategic weapon to drive the business, no firm can be effective in this new business climate. Plans constructed using customer satisfaction research results can be designed to target customers and processes that are most able to extend profits. Too many companies rely on outdated and unreliable measures of customer satisfaction. They watch sales volume. They listen to sales reps describing their customers' states of mind. They track and count the frequency of complaints. And they watch aging accounts receivable reports, recognizing that unhappy customers pay as late as possible--if at all. While these approaches are not completely without value, they are no substitute for a valid, well-designed customer satisfaction surveying program. It's no surprise to find that market leaders differ from the rest of the industry in that they're designed to hear the voice of the customer and achieve customer satisfaction. In these companies: Marketing and sales employees are primarily responsible for designing (with customer input) customer satisfaction surveying programs, questionnaires and focus groups. Top management and marketing divisions champion the programs. Corporate evaluations include not only their own customer satisfaction ratings but also those of their competitors. Satisfaction results are made available to all employees. Customers are informed about changes brought about as the direct result of listening to their needs. Internal and external quality measures are often tied together.

Customer satisfaction is incorporated into the strategic focus of the company via the mission statement. Stakeholder compensation is tied directly to the customer satisfaction surveying program. A concentrated effort is made to relate the customer satisfaction measurement results to internal process metrics.

To be successful, companies need a customer satisfaction surveying system that meets the following criteria: The system must be relatively easy to design and understand. It must be credible enough that employee performance and compensation can be attached to the final results. It must generate actionable reports for management.

Defining customer satisfaction

Because the concept of customer satisfaction is new to many companies, it's important to be clear on exactly what's meant by the term. Customer satisfaction is the state of mind that customers have about a company when their expectations have been met or exceeded over the lifetime of the product or service. The achievement of customer satisfaction leads to company loyalty and product repurchase. There are some important implications of this definition: Because customer satisfaction is a subjective, nonquantitative state, measurement won't be exact and will require sampling and statistical analysis. Customer satisfaction measurement must be undertaken with an understanding of the gap between customer expectations and attribute performance perceptions. There should be some connection between customer satisfaction measurement and bottom-line results.

"Satisfaction" itself can refer to a number of different facts of the relationship with a customer. For example, it can refer to any or all of the following:

Satisfaction with the quality of a particular product or service Satisfaction with an ongoing business relationship Satisfaction with the price-performance ratio of a product or service Satisfaction because a product/service met or exceeded the customer's expectations

Each industry could add to this list according to the nature of the business and the specific relationship with the customer. Customer satisfaction measurement variables will differ depending on what type of satisfaction is being researched. For example, manufacturers typically desire ontime delivery and adherence to specifications, so measures of satisfaction taken by suppliers should include these critical variables. Clearly defining and understanding customer satisfaction can help any company identify opportunities for product and service innovation and serve as the basis for performance appraisal and reward systems. It can also serve as the basis for a customer satisfaction surveying program that can ensure that quality improvement efforts are properly focused on issues that are most important to the customer.
Objectives program of a customer satisfaction surveying

Customer Satisfaction Measurement Facts

A 5-percent increase in loyalty can increase profits by 25%-85%. A very satisfied customer is nearly six times more likely to be loyal and to repurchase and/or recommend your product than is a customer who is just satisfied. Only 4 percent of dissatisfied customers will complain. The average customer with a problem eventually tells nine other people. Satisfied customers tell five other people about their good treatment.

In addition to a clear statement defining customer satisfaction, any successful surveying program must have a clear set of objectives that, once met, will lead to improved performance. The most basic objectives that should be met by any surveying program include the following: Understanding the expectations and requirements of all your customers Determining how well your company and its competitors are satisfying these expectations and requirements Developing service and/or product standards based on your findings

Examining trends over time in order to take action on a timely basis Establishing priorities and standards to judge how well you've met these goals

Before an appropriate customer satisfaction surveying program can be designed, the following basic questions must be clearly answered: How will the information we gather be used? How will this information allow us to take action inside the organization? How should we use this information to keep our customers and find new ones?

Careful consideration must be given to what the organization hopes to accomplish, how the results will be disseminated to various parts of the organization and how the information will be used. There is no point asking customers about a particular service or product if it won't or can't be changed regardless of the feedback. Conducting a customer satisfaction surveying program is a burden on the organization and its customers in terms of time and resources. There is no point in engaging in this work unless it has been thoughtfully designed so that only relevant and important information is gathered. This information must allow the organization to take direct action. Nothing is more frustrating than having information that indicates a problem exists but fails to isolate the specific cause. Having the purchasing department of a manufacturing firm rate the sales and service it received on its last order on a scale of 1 (terrible) to 7 (magnificent) would yield little about how to improve sales and service to the manufacturer. The lesson is twofold. First, general questions are often not that helpful in customer satisfaction measurement, at least not without many other more specific questions attached. Second, the design of an excellent customer satisfaction surveying program is more difficult than it might first appear. It requires more than just writing a few questions, designing a questionnaire, calling or mailing some customers, and then tallying the results.

Understanding differing customer attitudes

The most basic objective of a customer satisfaction surveying program is to generate valid and consistent customer feedback (i.e., to receive the voice of the customer, which can then be used to initiate strategies that will retain customers and thus protect the most valuable corporate asset-loyal customers). As it's determined what needs to be measured and how the data relate to loyalty and repurchase, it becomes important to examine the mind-set of customers the instant they are required to make a pre-purchase (or repurchase) decision or a recommendation decision. Surveying these decisions leads to measures of customer loyalty. In general, the customer's pre-purchase mind-set will fall

into one of three categories--rejection (will avoid purchasing if at all possible), acceptance (satisfied, but will shop for a better deal), and/or preference (delighted and may even purchase at a higher price). This highly subjective system that customers themselves apply to their decisions is based primarily on input from two sources: The customers' own experiences--each time they experience a product or service, deciding whether that experience is great, neutral or terrible. These are known as "moments of truth." The experiences of other customers--each time they hear something about a company, whether it's great, neutral or terrible. This is known as "word-of-mouth."

There is obviously a strong connection between these two inputs. An exceptional experience leads to strong word-of-mouth recommendations. Strong recommendations influence the experience of the customer, and many successful companies have capitalized on that link. How does a customer satisfaction surveying manager make the connection between the survey response and the customer's attitude or mind-set regarding loyalty? Research conducted by both corporate and academic researchers shows a relationship between survey measurements and the degree of preference or rejection that a customer might have accumulated. When the customer is asked a customer satisfaction question, the customer's degree of loyalty mind-set (or attitude) will be an accumulation of all past experiences and exposures that can be indicated as a score from 1 (very dissatisfied) to 5 (very satisfied). It can also be captured with other response formats with an odd number of choices (e.g., 1 to 3 or 1 to 7) to allow for a neutral response. Obviously, the goal of every company should be to develop customers with a preference attitude (i.e., we all want the coveted preferred vendor status such that the customer, when given a choice, will choose our company), but it takes continuous customer experience management, which means customer satisfaction measurement, to get there--and even more effort to stay there.

About the author

Since completing his master's degree in 1998, Kevin Cacioppo has been working for the leading integrated enclosure manufacturer. In his present role as global account leader, he has applied both theory and experience to support the world's largest semiconductor original equipment manufacturer in the United States and abroad. His work continues to indentify, in the perception of the customer, what steps must be taken to solidify relations and secure future business. E-mail him at kcacioppo@qualitydigest.com .

November 2012

Stable Prices, Higher Customer Satisfaction for Food Producers

Relative stability in the cost of food items for consumers leads to higher customer satisfaction for food manufacturers. Meanwhile, the national ACSI benchmark measuring aggregate customer satisfaction is unchanged for a third straight quarter. NOVEMBER 2012 BENCHMARK RESULTS AVAILABLE NOW >>

Press Release:
Aggregate Customer Satisfaction Stuck in Neutral. Read More >>

Commentary:
National Customer Satisfaction Lacks Momentum, But Holds the Line. Read More >>

Coming in December 2012:

Customer experience insights on the checking, savings, and loan services offered by major banks and credit unions; ongoing tracking of policyholder satisfaction with insurance providers.
The ACSI reports scores on a scale of 0 to 100.

Monthly Results for Stakeholders

The American Customer Satisfaction Index (ACSI) releases customer satisfaction benchmarks on a monthly basis to bring stakeholders in-depth coverage of various sectors of the economy throughout the entire calendar year. The national customer satisfaction benchmark is updated quarterly, factoring in ACSI scores from over 230 companies in 47 industries; 2 local government services; and more than 100 services, programs, and websites of federal government agencies.

Global Leadership

Customer Satisfaction
-7% y/y Primary Industry: Telecommunications Customer satisfaction, a term frequently used in marketing, is a measure of how products and services supplied by a company meet or surpass customer expectation. Customer satisfaction is defined as "the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds specified satisfaction goals." In a survey of nearly 200 senior marketing managers, More on 'Customer Satisfaction' at Wikipedia Edit Your Skills Add Skill Listed on your profile

Customer Satisfaction Professionals

Rajesh Janey
President - India and SAARC at EMC Currently President, India and SAARC at EMC Previously President, NetApp India and SAARC and was responsible for...

Joel Manfredo, MBA, MS (Finance)

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Customersatisfaction.com is your single, best resource for improving your customer service, sales, telemarketing and negotiation capabilities Whether you are building the fortunes of your professional practice or building your Fortune 1000 company, Customersatisfaction.com and Dr. Gary S. Goodman can assist you. We're here for you if you're seeking consultation or an internationally acclaimed customer service speaker, a dynamic sales speaker, or a highly credentialed, engaging best practices in negotiation speaker. We offer special seminars, custom conference programs, keynote speakers, convention breakout programs, customer service training, sales speakers, prospecting seminars, telemarketing training, front-line and supervisor coaching, sales management training, teleconferences, webinars, audio & video learning products, original articles, books, and licensed publications. We also offer a range of consulting and research services that include: customer service & sales outsourcing, employee and customer satisfaction surveys, service level monitoring, mystery shopping, unobtrusive measurement, benchmarking, and focus groups. By teaming with us, youll be able to access uniquely effective protocols for improving customer service, sales, and telemarketing productivity, making customer transactions shorter, and more cost-effective. Youll discover leading-edge ways to monitor, measure, and manage your service and sales functions, and overall customer satisfaction. Our methods have been recognized as the "Best" of the "Best Practices in Customer Care." More important, our clients win prestigious industry awards, enabling them to reach and sustain positions of leadership and respect. We also give customers new forums, including blogs, where they can Rant & Rave, praising excellent service providers while alerting us to those who fail to meet expectations. By doing so, we hope to improve customer satisfaction at large, while creating a significant feedback loop between businesses and those who are served by them. Welcome to Customersatisfaction.com! --Dr. Gary S. Goodman, Ph.D.; J.D.; M.B.A.; President

Customersatisfaction.com is your single, best resource for improving your customer service, sales, telemarketing and negotiation capabilities Whether you are building the fortunes of your professional practice or building your Fortune 1000 company, Customersatisfaction.com and Dr. Gary S. Goodman can assist you. We're here for you if you're seeking consultation or an internationally acclaimed customer service speaker, a dynamic sales speaker, or a highly credentialed, engaging best practices in negotiation speaker. We offer special seminars, custom conference programs, keynote speakers, convention breakout programs, customer service training, sales speakers, prospecting seminars, telemarketing training, front-line and supervisor coaching, sales management training, teleconferences, webinars, audio & video learning products, original articles, books, and licensed publications. We also offer a range of consulting and research services that include: customer service & sales outsourcing, employee and customer satisfaction surveys, service level monitoring, mystery shopping, unobtrusive measurement, benchmarking, and focus groups. By teaming with us, youll be able to access uniquely effective protocols for improving customer service, sales, and telemarketing productivity, making customer transactions shorter, and more cost-effective. Youll discover leading-edge ways to monitor, measure, and manage your service and sales functions, and overall customer satisfaction. Our methods have been recognized as the "Best" of the "Best Practices in Customer Care." More important, our clients win prestigious industry awards, enabling them to reach and sustain positions of leadership and respect. We also give customers new forums, including blogs, where they can Rant & Rave, praising excellent service providers while alerting us to those who fail to meet expectations. By doing so, we hope to improve customer satisfaction at large, while creating a significant feedback loop between businesses and those who are served by them. Welcome to Customersatisfaction.com! --Dr. Gary S. Goodman, Ph.D.; J.D.; M.B.A.; President

Customer Satisfaction Cisco Customer Satisfaction (CSAT) continues to be one of the highest priorities of Cisco and a cornerstone of the Cisco Channel Partner Program. CSAT is an integral part of establishing customer loyalty, and gives partners a method to assess customer-to-partner relationships and actively address customer concerns. Partner Access onLine (PAL) provides partners with real-time, partner-customized access to Cisco best practice sharing. "Our key differentiating feature is our John Chambers, Cisco Chief Executive Officer Log In to PAL fanatical approach to customer satisfaction"

CSAT Resources Customer Satisfaction Excellence Loyalty Model in Partner Access onLine (PAL)

FAQs

Requirement

Target Actual Requirements Met? 30 # of Responses Yes 35 (Gold/Silver Partners Target) 4.45 CSAT Regional Target 4.70 Yes (APJC Regional Target) Requirement Target Actual Requirements Met? 20 # of Responses Yes 21 (Premier Partner Target) 4.60 CSAT Regional Target 4.59 No (Americas Regional Target)

How to Ensure Strong Customer Service and Customer Satisfaction

(Note that nonprofits might use the term "clients" rather than "customers") Increasing competition (whether for-profit or nonprofit) is forcing businesses to pay much more attention to satisfying customers, including by providing strong customer service. It may help the reader to notice the role of customer service in the overall context of product or service development and management. See Product and Service Development.

Sections of This Topic Include

Customer Service Basics Top Five Customer Service Metrics (Measuring Customer Satisfaction) Satisfied Customers - Do You Know If Yours Are? (Measuring Customer Satisfaction) Handling Additional Call Centers
Also

Customer Perspectives on

Customer

Complaints Service

Customer Related Library Topics

Satisfaction

see

Also See The Library's Blog Related To Customer Service and Satisfaction
In addition to the articles on this current page, also see the following blog that has posts related to Customer Service and Satisfaction. Scan down the blog's page to see various

posts. Also see the section "Recent Blog Posts" in the sidebar of the blog or click on "next" near the bottom of a post in the blog. The blog also links to numerous free related resources.

Library's Customer Service Blog

Customer Service Basics

Copyright

Barb Lyon

Servicing a customer is a part of every purchase and interaction with internal and external contacts. It can last a few seconds up to hours. So if we all do it and experience it everyday in almost everything we do, why isnt good customer service the norm? We all have stories about when we were treated exceptionally well or extremely poorly. We tend to share these extraordinary stories with others. We all know that word of mouth marketing can be the absolute best advantage, or the worst drawback for a company. Warren Buffett said it best: It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, youll do things differently.

A few basic rules about customer service:

Honesty is the Best Policy. Integrity Be honest and own up to your mistakes. Communicate what you plan to do to change or prevent the same mistake from happening again. Dont be fooled into believing that a regular mea culpa will get you off the hook. At some point the plan to fix the problem must take effect! Break Glass in Case of Fire. Response Time The best tact is to quickly get on the phone with the customer to explain your companys mistake. Dont rely on email for this communication if it can be done quickly one on one. If you are communicating to a large customer base then email is certainly the fastest and most effective way to quickly notify your customers that you are aware of the problem. Frequent updates is there is a protracted issue and a brief overview of how you will prevent it from happening in the future will give your customers confidence that you are aware of the customer impact. Keeping it Real. Set a Realistic Expectation Customers who have been promised something that isnt delivered as promised are far more frustrated and disappointed than if they are notified at the outset they wont have it sooner than later. In other words, under promise and over deliver is the best policy. This may take some arm wrestling with other departments who want to take a feature or product to market before it is ready. Set the expectations correctly internally as to what the fallout may be so everyone understands the impact to customer satisfaction and ultimately customer retention.

R-E-S-P-E-C-T. Everyone in your company should love your customers. Without them, you have no company. This doesnt mean you wont have difficult customers who will push the limits and try everyones patience. But if you dont have a company philosophy to respect and appreciate your customers, the opposite tone will infect customer interactions from all departments. All departments, customer facing or not, should care about customer satisfaction. From Gandhi, We must become the change we want to see in the world. Use these 4 tenets as the foundation for your customer service mission. What do you do to ensure your customers are treated as your most important asset?

How to Calculate the Value of Customer Loyalty Customer Service Basics Customer Service Strategies Self-Help is IN Don't Forget About Gathering Client Feedback Outstanding Customer Service A Call Out to Leadership Empowered Employees for a Unequivocal Customer Experience 5 Principles of Customer Care How to Host a Customer Event 7 Finishing Touches for Your Customer Service Strategy | Inc.com Showing Customer Love

Top Five Customer Service Metrics

Copyright

Barb Lyon

First question you should ask yourselfHow do you measure customer satisfaction? If you are measuring by the # of complaints you are or are not receiving, you are in trouble. Not everybody bothers to take the time to tell you about his/her horrible experience. If you are asking your customers if they are satisfied, you are telling them that their satisfaction matters. There are many different ways to ask: post-purchase and post-support surveys, enclosures in the monthly invoice, follow-up phone calls and quarterly or annual surveys. The right method depends on your business and your customer base. Try different ways. Just do it. Lets be clear: if youre not measuring any part of your service delivery, you are missing a huge opportunity to improve, grow or even save your business during these scrutinizing, tight economic times. The challenge with specifying key indicators is that not all businesses will use the same metrics. For example, a retail or fulfillment organization will have decidedly different key performance indicators than a software-as-a-service company.

For the purposes of this discussion, I have highlighted relatively general metrics and incorporated a few varying perspectives for different use cases. Service Level For call centers, support, and service desks, first call resolution is the Holy Grail. For a shipping operation, product delivery and project implementation, ontime performance is the measuring stick. In a high transaction business, the first interaction with a customer will be a key determinant of whether the customer will return. Dont underestimate the importance of timeliness and thoroughness. Customer Retention For SaaS businesses, Utilization is the best indicator of a customers dedication to your service. Use this metric to understand who is at risk at contract renewal time. Monitoring Repeat Business is going to help non-SaaS businesses understand how sticky their product or service is for their customer base. You should know which customers are using or buying different parts of your business. These customers who buy throughout your offerings are perhaps your most important customers to focus on for your retention strategies. Response time Youd be surprised how many customer surveys come back w ith comments such as your service is great, you got back to me right away. I was surprised with how quickly you responded to my inquiry and it made all the difference even if I didnt get the answer I was hoping for In todays world of electronic relationship management, response time is one of the only ways we can communicate our sense of urgency and concern for our customers and their experience with our product or service. What is your Response goal within X hours? Set one and achieve it. You should know what your competition is doing and beat their goal. Want to really blow away a customer and cement your relationship? Pick up the phone and give them a personal call. Time with the Customer Are your customer-facing employees incentivized to keep calls short or to move too quickly from customer to customer? If so, you are sending the wrong message and subsequently affecting the quality of the customer interaction. There is a definite happy medium between the overly chatty service provider and the thorough and efficient provider. Set your benchmarks for call duration and general time with the customer in relation to the ultimate goal of first call resolution, NOT the other way around. In other words, a completely satisfied customer not requiring a follow-up call or visit is much preferred over a quick, unresolved interaction. Churn Cancellations and returns are the equivalent to churn. If you dont know how much business you are losing, you wont be able to understand how much new business you will require to stay out of the red. As important as knowing how much, is understanding WHY you are losing customers. Take it to the next level and use follow-up surveys, phone calls, personalized how can we get you back emails. This survey information is the real business insight for understanding your lost business.

By all means this is not a comprehensive list of key performance indicators. To expand further we would need to focus on a particular business model to provide a more granular perspective. Start measuring and start making changes. Continue to evolve your key metrics as your business evolves. Keep this process circular for continuous improvement. Post these key performance indicators in your facility or on your intranet and regularly communicate them to your employee base to give everyone in your Company sensitivity to how you are performing for your most important asset: your Customers.

Customer Feedback Helps You Improve Basic Methods to Get My Top 5 Customer Service Metrics

the Customer Customer

Experience Feedback

Satisfied Customers Do You Know if Yours Are?

Copyright

Barb Lyon

In our world of customer service, it is our mission to keep customers. It is a privilege to serve you, that is what the Banker told me today when I called for information regarding refinancing. Do your employees believe that serving your clients is a privilege? Do your clients feel like they are appreciated? Nowadays a lot of consumer product and service companies are asking for feedback. Some companies incorporate the how are we doing insight as a deep part of their company culture. Salesforce.com has a place for employees and customers alike to log their feedback. In Behind the Cloud, http://www.amazon.com/Behind -CloudSalesforce-com-, Salesforce.com CEO Marc Benioff explains how and why they spent money to build their IdeaExchange forum. Many e-commerce sites ask at the end of a sale for feedback about the shopping experience. Brick and Mortar stores are now enticing shoppers to log in and provide feedback on their shopping experience in exchange for a prize. What about the business-to-business companies? With customers locked into contracts, the same drive to listen and improve is not always as entrenched into the company culture. We can change that. Start by listening.

Customer Surveys
There are several easy-to-use, cost-effective online survey solutions now to help you launch a Listening Campaign. Polaris Marketing provides you with some sample questions if you are new at this. Survey Monkey, Question Pro, and Zoomerang are just a few online resources that will not only help you with the logistics of doing a survey but also help you formulate a strategy so you get the answers you need.

Online Surveys are not the only option. Make calls to a % of your client base every quarter or send out a brief survey with your monthly invoice. Depending on your product or service, this simple effort may be a huge differentiation for you. Make sure your survey will give you actionable feedback. In other words, ask questions that will give you answers about specific experiences as your customer so you will know what to fix. General questions like Are you happy with your experience in working with us give you a good indication of how your customers are feeling, but if they answer in a negative way you wont know what part of the experience needs fixing.

Action Plans
Once you are ready to rollout a survey, you still have much more work to do. The most important element in asking for feedback is deciding what you are going to do about what the surveys say. Dont bother asking if you dont intend to allocate the time , resources or money to making changes. Now it is time to put the feedback into actionable who, by when and how plans to make changes. You wont be able to fix everything at once, but it is important for both your employees and your customers to see real change as a result of the surveys. Be realistic about what you can accomplish and set both short-term and long-term goals.

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Now that you have launched your Listening Campaign, Broad Categories you will have the process for next time all mapped out. Action Learning Quarterly? Semi-Annually? Annually? Whatever timeline Advertising & Promotions works best for you and your business to ensure the Benefits & Compensation feedback is put to use. Boards of Directors Ethics Using satisfaction surveys to achieve aBusiness Business Planning competitive advantage Bldg (Nonprofit) When Should Changes Be Made to a CustomerCapacity Career Development Satisfaction Tracking Questionnaire?Chief Executive Role Measuring Customer SatisfactionCoaching (Intrprsnl) Measuring and Tracking Customer Satisfaction Communications Business Development

Communications (Writing) Computers, Internet, Web Handling Customer Complaints Consultants Coordinating Best Practices in Resolving Customer Complaints Cost Cutting (Sustainability) and Innovation Listening for Dollars-Customer ComplaintsCreativity Crisis Management Create Profit Satisfaction Handling Customer ComplaintsCustomer Customer Service Customer Complaints - Love Those Lemons ToDecision Making Improve Customer ExperienceDelegation When Customer Rebellion Becomes OpenE-Commerce Employee Performance Revolution Employee Wellness The New Rules of Handling Customer Complaints Entrepreneurship How to Handle Complaints: The IBM Way Ethics/Social Respons. Evaluations (all kinds) Additional Perspectives on CustomerFacilitation Facilities Management Service Finances (For-Profit) Finances (Nonprofit) Make An Action Plan To Improve CustomerFundraising (For-Profit) Fundraising (Nonprofit) Service Group Performance Improving Customer Service Requires Group/Team Skills Consistency Growing Organizations Customer Care and Technical Support (withGuiding Skills example survey and monitoring forms)Hiring Employees Resources Customer Service Strategies Live ChatHuman (Business) Customer Service Is Dying and I'm Not FeelingInsurance Skills So Good Myself!Interpersonal Interviewing (all kinds) Customer Service TipsJobs How One Southwest Airlines Employee DeliveredLeadership (Overview) Development Exceptional Customer ServiceLeadership Learning and Development

Information Crisis Management and Customer ServiceLegal Management (Overview) How To Make The Shift To High-End Customers Management Development How to Manage Client Expectations After YouMarketing Close a SaleMeeting Management Do Your Customers Deserve a Bill of Rights?Mentoring Employees First, Customers SecondMotivating Self & Others Management Fire Your Highest Margin Customers!Operations Organization Dev.(Field) Beware of Letting Competitors Distract YouOrganizational Alliances From Customers!Organizational Change Customer Service or torture?Organizational Six Critical Steps to Training High-QualityCommunications Performance Customer ServiceOrganizational Organizational Sustainability 6 Tips to Delivering Customer Value (aOrganizations (Overview) Leadership Challenge)Organizing Customer Service Answers You Cant Do WithoutPay and Benefits Management When Companies Think They Are Too Smart forPerformance Development Customer ServicePersonal Personal Productivity Social Media Impacts Customer ServicePersonal Wellness Poorest Customer Service in the Land Where itPlanning (many kinds) Really CountsPolicies (Personnel) Solving/Decisions Worst DMV Customer Service Cherry Hill, NJProblem Product Development Is Your Food Good, Yes? Project Management Key Training Ideas for Your Customer Service Program Management Program Public/Media Relations Quality Management Research Methods Risk Management Salaries Sales Small Business Social Enterprise Social Networking/Media Spirituality in Work Staffing a Business For the Category of Customer Service andStart Start a Nonprofit Satisfaction: Strategic Planning Stress Management (Overview) To round out your knowledge of this Library topic, you Supervision Supervisoral Development may want to review some related topics, available from Sustainable Development the link below. Each of the related topics includes free, Systems Thinking online resources. Talent Management Taxation Also, scan the Recommended Books listed below. They Team Building have been selected for their relevance and highly practical Time Management nature. Training/Learning & Development

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Customer Service

The following books are recommended because of their highly practical nature and often because they include a wide range of information about this Library topic. To get more information about each book, just click on the image of the book. Also, a "bubble" of information might be displayed. You can click on the title of the book in that bubble to get more information, too.

Customer Satisfaction
The following books are recommended because of their highly practical nature and often because they include a wide range of information about this Library topic. To get more information about each book, just click on the image of the book. Also, a "bubble" of information might be displayed. You can click on the title of the book in that bubble to get more information, too.

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