MEASURING AND MANAGINGCUSTOMER SATISFACTION PROGRAMS

Contact: M a r y M a l a s z e kP: 617-323-1862C: 617-869-4037

B O S T O N www.marektdirectionsmr.commary@marketdirectionsmr.com

Customer Relationship Lifecycle

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What happens

next?

There are various customer touch

points --each one has the ability to

satisfy or dissatisfy.

Customer Relationship Lifecycle

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The hardest thing for competitors’ to copy is the customer experience created.

• Customer Decision Stages• Realization of problem or need.

1. Awareness of solutions ---products and services.

2. Seeks information, obtains knowledge linking solutions to needs.

3. Consideration of your products or services v competitors.

4. The selection of the solution--fulfillment of need.

• Post Purchase BehaviorWhat happens next?

Customer Relationship Lifecycle

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•Post Purchase Behaviors• Post-purchase behavior is the final

stage in the customer journey–finalizing the decisions process.

• The customer then assesses whether he/she is satisfied or dissatisfied with their purchase decision.

• Satisfaction leads to behaviors that enhance the brand, dissatisfaction can lead to lower sales.

The hardest thing for competitors’ to copy is the customer experience created.

Satisfaction Dissatisfaction

Why Measure Customer Satisfaction?

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Research shows a “Totally Satisfied Customer” contributes:

3 times more revenue as a “Somewhat Satisfied

Customer”

14 times more revenue as a “Somewhat Dissatisfied

Customer”

A Totally Satisfied Customer will, on average

Buy more from you

Be more likely to make a referral

Are loyal and can become an advocate

Customer Satisfaction Metrics Should:• be uniform– standardized• measure each customer touch-point• consistent from year to year• have strategic value• assess your ability to meet your

customers' needs • measure the enterprise as a whole

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Models to Measure Customer Satisfaction

Presented on the next three slides are three models which can be used to measure customer satisfaction:

• Voice of the Customer• Kano Model• NPS– Net Promoter Score

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Voice of the Customer

• Customers do know what they want. • They know but not the exact features or solutions

that will satisfy.• Not designed by customers, but inspired by

customers.• Understand underlying needs.

• Don’t ask customers to do your job by asking• What products do you want?• What features do you need?

• VOC = “A description, in the customer’s own words, of the benefit to be fulfilled by the product or service.”“A cup of coffee that stays hot until I finish drinking it”

• “I never have to worry about losing my work”

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Adopted from Griffin, Abbie & John Hauser, “The Voice of the Customer,” Marketing Science, 1993 12:1

The "voice of the customer" is the term used to describe stated and unstated needs or requirements of the customer.

Internal Understanding of Customer

What Customers Tell You

What Actually Sells

• Customer and Firm Agreement1)

• What Customers Got Wrong2)

• VOC Insights3)

• Firm Got Wrong4)

• What Firm and Customers Got Wrong5)

• Innovation6)

1)

2)

3)

4)5)

4)2)

6)

• 0|1|2|3|4|5|6|7|8|9|10

On a scale of 0 to 10, how likely are you to recommend our company to a colleague or friend?

Net Promoter Score (NPS)

Detractors Neutral Promoters

Net Promoter Score (NPS) is the result from surveying customers and asking them “On a scale of 0 -10, how likely is it that you would recommend…? Subtract the percentage of 0 through sixes from the nines and tens.

NPS = % of Promoters - % of Detractors The research that originally developed the Net Promoter Score was from Frederick Reichheld, Bain and Satmetrix.

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2015 NPS ScoresThe 2015 NPS report from Satmetrix ranks more than 220 brands across 22 U.S. industry sectors, including financial services, insurance, technology, online entertainment, retail stores, electronics, travel and hospitality, and telecommunications.

Satmetrix claims the findings reveal that the Net Promoter leaders in their respective industries have positioned themselves to outpace the competition in the areas of increased customer retention and acquisition -- and ultimately in terms of bottom line growth.

30,000 U.S. consumers were surveyed who rated their experience with the primary brands they use. Consumers also rated each brand on various aspects of customer experience, including product or service features, customer service and overall value.

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Kano Questionnaire Scale

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FUNCTI

ONAL?

Dysfunctional question

Like Expect Neutral Livewith

Dislike

Like Q E E E L

Expect R I I I M

Neutral R I I I M

Live with

R I I I M

Dislike R R R R Q

Kano questionnaires include two questions for each feature:1. the functional question

"How do you feel if this feature is present?"

and

2. the dysfunctional question

"How do you feel if this feature is NOT present?"

• The customer has to choose one of the five possible options:• I expect it to be this way• I like it that way• I am neutral• I can live with it this way• I dislike it this way

M - Must haveL - LinearE - ExciterR - Reverse, i.e. wrong features, that would make the user experience worseQ - Questionable, i.e. the potential user answers are inconsistentI - Indifferent, i.e. the potential user doesn't really care about the feature

The Kano Model is a two-dimensional model of the relationship between performance (expressed as internal performance measures) on the one hand, and value expressed as customer satisfaction) on the other.

Customer Satisfaction Measurements have Impact-- Strategic Value• Customer Satisfaction Measurements

provide the greatest impact when: • An effort is made to relate the customer

satisfaction measurement results to internal processes.

• Customer Satisfaction is incorporated into the strategic focus of the company.

• Top management reviews and supports

• Results are made available to all employees

• Customers are informed about changes • Compensation and/or bonuses are tied directly to

the customer satisfaction scores.

• Customer Satisfaction Measurements are of strategic value only with:• High Response Rates

• Actionable Results• not just a perusal of the scores, but serious,

effective action plans

• No Biases or Influences• some companies have employees with an interested

stake in the results phoning customers and challenging their responses or those implementing the responses compensation is tied to results

• Prioritization• determine where to most effectively put time and

effort for improvements

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How to Collect Customer Satisfaction MeasurementsQuantitative• Surveys

• Likert Scales• NPS• Ranking• Rating• Online, mobile, telephone

• In-field• Continuous at POS• Table Top• Feedback Forms

• User Activity from “Big Data”

Qualitative

• Social Monitoring• Reviews• Comments• Facebook, Glassdoor, Yelp, etc.

• Create an Online Community

• User Groups

• Sales Call Follow-up• Win/Loss

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Conclusion & Summary• To implement a formal process of customer experience management, customer satisfaction

measurements are a tool which: • identifies strengths and weaknesses• identifies advocates• rates each area of the company• rates company as a whole• have meaning when

• a process is in place to address customer feedback• are communicated to employees and customers• are championed by top management and incorporated into mission• are tied to performance reviews, compensation or bonus

• The benefits of a customer experience management program will be vast for the firm by differentiating you from your competitors and provides a journey to creating a delighted customer that impacts the bottom-line.

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