“A well satisfied customer will bring the repeat sale that counts.” – J C Penny
Companies seem to be constantly worried about what customers think and feel about them, and in order to know accurately, they seek to measure levels of customer satisfaction. Customer Satisfaction Scores and Indices are the way to measure the company’s performance with regard to customer satisfaction and happiness. The assumption underlying such ‘measurement’ is that customers who are more satisfied have a greater likelihood of becoming loyal and hugely profitable. For any company, it is vital to monitor the customer satisfaction scores since the happiness of customers is critical to the health and growth of the business. Even so now, in the digital age, unhappy customers wield greater power and more force than ever – one angry comment, nasty review, an irate discussion via social media, all have the potential to cause serious, long-term, and sometimes irreparable damage to a company /brand. On the other hand, consistently satisfied customers would be happy to ‘play’ brand ambassadors, and would be willing to promote and recommend their most preferred ‘brand’ to others, thereby contributing to the revenue and profits of, and loyalty for the company.
Companies use varying approaches to arrive at customer satisfaction scores. The first one being a customer satisfaction index, which is ‘created’ from combining the scores of various customer surveys across various business aspects, to indicate the overall satisfaction level of customers. The underlying principle of this method is to attribute importance to each aspect depending on its ability to drive customer satisfaction. For example – customer service could be responsible for 50% of the customer’s satisfaction, while pricing and other factors could be the remaining fifty. Hence, the index must reflect these percentages and balance.
Customer satisfaction scores is the other approach to gauge customer satisfaction. A single question in a survey is how it is arrived at, and companies need to determine which would be the best question to ask, in order to gain an understanding of customer satisfaction levels. Companies usually ask customers either of two questions. One – asking customers to rate their satisfaction keeping in mind the overall experiences they would have had with the company – on a scale of 1 to 10 (10 being the most satisfied). The other question would be asking customers about the likelihood of rating the company to others – on a scale of 1 to 10 (10 being the most likely). Market experts however, warn against complacency and smugness on the part of a company that may receive high customer satisfaction scores from either of these questions. This is so since while the high customer satisfaction scores may reflect the current state of mind of the customers, they would not provide an indication of how engaged customers are, and what their likelihood of loyalty would be.
The harsh reality reflects through research, which shows that most customers that leave a company for another are the ones who would have given a high satisfaction score. What does your company do to understand the difference between high customer satisfaction scores and actual customer loyalty? Is it possible to prevent ‘highly satisfied’ customers from leaving? The most important thing to remember is that satisfied customers do not necessarily mean loyal ones – they could have used a company’s product simply because their primary option was not available.
To gauge the robustness of customer satisfaction scores and to know whether they indicate customer loyalty, market experts recommend the net promoter score (NPS). This, according to the experts, is a better measure of customer loyalty since it ‘asks’ customers to rate the likelihood of whether they would recommend the company to others (friends, colleagues, associates, and other businesses), and customers are expected to rate on a scale of 1-10 (as mentioned above). Based on their answers, the NPS system would categorize customers as promoters (those with scores of 9 and 10), passive customers (those with scores of 7and 8), and deflectors (those with scores between 0 and 6). The ‘top scorers’ are the ones who would most likely continue buying and could also refer the company to others. The middle scorers would be the satisfied but not engaged customers, and extremely likely to deflect if they receive better offers from a competitor. The last ‘rung’ of customers would be the unhappy and dissatisfied ones. This set of customers would be the ones most capable of damaging the reputation of the company by not only leaving but also spreading the negative word of mouth, consistently and vociferously.
Going a step further to understand the true meaning of customer satisfaction scores, companies must not stop at the one NPS question, even though it may provide some clarity on the likelihood of whether customers would stay, it does not provide answers on what the company can do to improve and insure loyalty. It is important therefore, for companies to get customers to provide their suggestions through open-ended questions, the answers to which would be in detail, allowing customers to list out exactly what they would want. For customers attributes such as value, trust, and transparency are extremely important and help build loyalty for a company. People seek brands that display their understanding of the needs of customers, and would be able to provide a speedy and within budget solution. However, it is imperative for a brand to seek feedback continually from customers to know whether the company is keeping pace with their changing needs and expectations. If the company seems to be slipping, it would necessitate action to remedy it, in order to prevent customer churn and dissatisfaction.
In addition to speed, a company must remain flexible and agile in order to alter swiftly their line of products and or services based on the existing needs of customers. The fact is that customers do not have the time or patience to stick with companies that seem incapable to matching their pace. The products and services must be able to serve the current needs of a wide customer base, while being flexible enough to grow and change as required by customer preferences. In addition to offering top-notch products, a company must also be highly dependable and trustworthy. This means that they would deliver on their promises, keep to timelines, and do everything possible to ensure top class customer experiences. If the product was good, but every other aspect was below average, a company can be sure to receive abysmally low customer satisfaction scores. Poor experience and shoddy customer service is sure to ruin the image of a company irrespective of how much customers may like a company’s offerings. When trying to ascertain customer satisfaction scores, a company must ask customers to rate both its products and service, and afford them the opportunity to provide a short text of why they hold a certain opinion – good or bad.
Whatever a company does, it is imperative to remain consistent and transparent in its dealings. Transparency and consistency affords customers a feeling of ‘knowing’ and in control. For customers, these aspects are extremely important and are among the top reasons for them to stay with a company. What a company should try to achieve through customer satisfaction scores is understanding whether customers see it as loyal, and whether they would remain loyal to the company. A great company is one that always considers the needs of customers first, and does whatever possible to enhance their experiences with the company. If your company seeks to gain the customer’s trust, you can be certain that your customer satisfaction scores will remain high, reflecting all the good feelings customers have for your company.