Tracking Customer Satisfaction

Tracking Customer Satisfaction K. Douglas Hoffman For many companies, customer satisfaction is both a goal and a major factor in company success. Tools for tracking and measuring customer satisfaction range from the primitive to the sophisticated. Companies use the following methods to measure how much customer satisfaction they are creating. A customer-centered organization makes it easy for customers to make suggestions or complaints. Restaurants and hotels provide forms on which guests can checkoff their likes and dislikes. Hospitals place suggestion boxes in the corridors, supply comment cards to exiting patients, and employ patient advocates to solicit grievances. Some customer-centered companies, such as P&G, General Electric, and Whirlpool, set up customer hot lines with 800 numbers to make it easy for customers to inquire, suggest, or complain. Such systems not only help companies to act more quickly to resolve problems, they also provide companies with many good ideas for improved products and service. Simply running complaint and suggestion systems may not give the company a full picture of customer satisfaction and dissatisfaction. Studies show that one of every four purchases results in consumer dissatisfaction , but that less than 5percent of dissatisfied customers bother to complain—most customers simply switch suppliers. As a result, the company needlessly loses customers.

Responsive companies take direct measures of customer satisfaction by conducting regular surveys. They send questionnaires or make telephone calls to a sample of recent customers to find out how they feel about various aspects of the company’s performance. They also survey buyer’s views on competitor performance. Whirlpool surveys customer satisfaction on a massive scale, then acts on the results: When customers talk, Whirlpool listens. Each year the company mails its Standardized Appliance Measurement of Satisfaction (SAMS) survey to 180,000 households, asking people to rate all its appliance on dozens of attributes. When a competitor’s product rankers higher, Whirlpool engineers rip it apart to see why. The company [also] pays hundreds of consumers to fiddle with computer-simulated products at the company’s Usability Lab while engineers record the users’ reactions on videotape A company can measure customer satisfaction in a number of ways. It can measure satisfaction directly by asking: “How satisfied are you with this product? Are you highly dissatisfied, somewhat dissatisfied, neither satisfied nor dissatisfied, somewhat satisfied, or highly satisfied? ” Or it can ask respondents to rate how much they expected of certain attributes and how much they actually experienced. Finally, the company can ask respondents to list any problems they have had with the offer and to suggest improvements. While collecting customer satisfaction data, companies often ask additional useful questions. They often measure the customer’s repurchase intention; this will usually be high if customer satisfaction is high. According to CEO John Young ate Hewlett-Packard, nine out of ten customers in H-P surveys who rank themselves as highly satisfied say they would definitely or probably buy from H-P again. The company also might ask about the customer’s likelihood or willingness to recommend the company and brand to other people. A strongly positive word-of-mouth rating suggests high customer satisfaction. Another useful way of assessing customer satisfaction is to hire people to pose as buyers to report their experiences in buying the company’s and competitor’s products. These “ghost shoppers” can even present specific problems to test whether the company’s personnel handle difficult situations well. For example, ghost shoppers can complain about a restaurant’s food to see how the restaurant handles this complaint. Not only should companies hire ghost shoppers, but managers themselves should leave their offices from time to time and experience first-hand the treatment they receive as “customers.” Companies should contact customers who have stopped buying, or those who have switched to a competitor, to learn why this happened. When IBM loses a customer, it mounts a thorough effort to learn how it failed: Was IBM’s price too high, its service poor, or its products substandard? Not only should the company conduct such exit interviews, it should also monitor the customer loss rate. A rising loss rate indicates that the company is failing to satisfy its customers. Customer satisfaction ratings are sometimes difficult to interpret. When customers rate their satisfaction with some element of the company’s performance, say delivery, they can vary greatly in how they define good delivery. It might mean early delivery, on-time delivery order completeness, or something else. Yet, if the company tried to define every element in detail, customers would face a huge questionnaire. Companies also must recognize that two customers can report being “highly satisfied” for different reasons. One might be easily satisfied most of the time, whereas the other might be hard to please but was pleased on this occasion. Further, managers and salespeople can manipulate their ratings on customer satisfaction. They can be especially nice to customers just before the survey or try to exclude unhappy customers from being included in the survey. Finally, if customers know that the company will go out of its way to please customers, even if they are satisfied, some customers may express high dissatisfaction in order to receive more concessions.