Marketing in the new era

Client satisfaction how to make the most of it

When our customers rate us better or worse than somebody else, its never scientific, but its always disastrous if you score low
Jack Welch, 1995

What is satisfaction? How is it build?

Describe it and define what is your satisfaction level right now

Satisfaction

Is the degree of achievement a customer feels after each interaction with the brand It evolves and is gradually built during the relationshio of a customer with a brand Determines brand print, loyalty, usage and expenditure
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Proof?
Correlation between loyalty and consumption Correlation between DJ and ACSI
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Expenditure level Relationship level

France Telecom (2004) Telecom Italia (2003) British Telecom (2003) Telefonica (2003)

Loyalty

350 212 157 100

238 178 176

162 151 135

201 158 140

Advantage

Relevance Presence

100

100

100

Fonte: Brand Z, Millword Brown Estudo sobre um painel de 500.000 clientes, realizado todos os anos em mais de 30 pases, que avalia mais de 16000 marcas nacionais e internacionais nos vrios pases. A propriedade de anlise dos dados da OgilvyOne

6 6 This graphic represents the expenditure level based on a basis of 100 for the lowest level

ACSI e Dow Jones:

% evolution 2000-2005 (2Q)
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Correlation= 60%

DOW JONES

ACSI

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timeline Business School, Univ. Michigan Claes Fornell, 2005

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This graphic represents the % evolution of both indexes and not their actual value

Dow Jones (%)

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ACSI (%)

How to measure

Satisfaction is based on perception Conditioned by performance environment And is built upon expectations Its hard to measure, and can never be done in absolute terms, only in comparison
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Satisfaction tree

Measuring satisfaction via

Identifying atributes (the ones clients really value) Determining their weight (from the clients perspective) Assessing their value (based on clients experiences)

Instead of just asking a simple question how satisfied are you?

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Step 1

Determine the real satisfaction factors by asking the consumers what really is important for them, and how the really value it

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Step 2

Build a satisfaction grid that will explain in detail all factors and subfactors that will deterrmine the clients satisfaction

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Develop the measurement system

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Step 3

Evaluate the satisfaction level for each factor and subfactor Determine the total satisfaction level by including the figures in the satisfaction tree and calculating the weighted average of all factors

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Identify relative importance of Customer Satisfaction Drivers

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Putting satisfaction to use

Satisfaction factors can translate into company KPI

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Identify relative importance of Customer Satisfaction Drivers

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If satisfaction factors can be correlated to KPI, then the control of KPI can ensure optimal satisfaction The company can choose where to put its resources based upon the relative weight of each KPI in the overall satisfaction, as well as in the performace of the satisfaction factors it affects
But enhancing KPI leads to higher costs, so managing satisfaction is not about maximums, but about optimum levels

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Companies have to choose

What are the satisfaction factors that need to be changed (for better or worse) What are the internal KPI that will shape these factors Where will the available money be invested

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Step 1

Identify the factors / atributes that are

to be enhanced to keep to be reduced

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8,50 Carregam entos Funcionam ento SMS 8,00

Atendim ento Telefonico 7,50 Servios adicionais

Estruturao de Tarifrios

Rede

Satisfao com Factor

Consulta no visor 7,00

Equipam entos

Inform ao SMS e Prom oes 6,50

6,00
Atendimento na loja

Programas de pontos

5,50

Preos

Preos re roaming

5,00 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% 24% 26% 28% 30% 32% 34%

Peso do Factor

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Step 2

Determine where in the satisfaction curve is the factor / atribute in order to evalaute how hard it is to change its evaluation

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Churn area

Indiference earea

Delightment area

Very satisfied

Before investing in service quality, companies must understand their clients satisfaction.

Cleint Satisfaction
Not satisfied

Poor quality

High quality

Service Quality level

Fonte: Council on Finantial Competition Patricia Markovich, 2003

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Step 3

Perform a cost / benefict analysis to determine where should we invest

More satisfaction More consumption but Better KPY More cost

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Managing satisfaction

+ Satisfaction

Indiference area Churn area

Manage satisfaction is not to maximize satisfaction or service quality, not even try to be perfect in every dimension

B Delightment area

+ Revenue

+ QoS

Manage satisfaction is to guarantee na optimum level of satisfaction (deriving from perceived service quality), ie, where profit is maximized in the long run
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03-07-2013
Curvas exemplificativas

+ Cost

A Maximum profit level B Maximum satisfaction level

Steps to optimize satisfaction management

Determine correct satisfaction factors and their relative weights Grade satisfaction factors

Via client information

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Determine internal KPI that can better represent the performance for satisfaction factors Measure their performance

Via internal measurement processes

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Determine costs of improving KPI performance, ie marginal costs of performance Determine revenues from increases in satisfaction, ie, marginal revenue of satisfaction

Via cost analysis and revenue correlation

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Compare performance and grading evolution Compare with competitors or market

Via analysis systems

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Decide where to spend the extra dollar

Consider lower standards
Never mind

Keep as it is
Invest to increase performance

+ Factor grade -

- Factor relevance +
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beware

Expectations versus perceptions Anything can change grading at any point All moments of truth contribute to satisfaction levels

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Satisfaction and relationship management

Satisfaction analysis can determine with whom, why, when and where companies need to intervene And also what needs to be said But it has to take into consideration not only the economics of the process, but also the drives of the relationship
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Churn and complaint management can be decisive in the relationship management Although difficult to qualify, records of complaint management and churn motivation are essencial in a satisfaction analysis
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Exercise

Look at 2 emails and determine what is correct and what is wrong in each of them Correct whats wrong to make both of them right

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