Why do customers rate you, your brands, your service… highly in omnibus customer satisfaction surveys, yet show you no special favours and refuse to engage with your company?
This blog looks at best-practice in evaluating customer relationships with both the modern and traditional trades, and highlights where research dollars need to flow to ensure that measurement and tracking of relationships drives business growth.
What is the business outcome of your customer satisfaction research?
An increasing amount of money has been spent on customer satisfaction research over the last 10 years. B4P benchmarking research indicates it is an area that will get more spend. The research findings (often a ranking versus other companies) have also become part of the language, but as yet do not integrate with channel and account planning processes. As one Research Director recently put it: “How come we are one of the most highly regarded companies in customer satisfaction research, yet our new products are not fully supportive, and we’re shown no special treatment…and we’re not growing with the customers who rate us highly?”
Best-practice uses traditional research disciplines such as development of a hypothesis, and it uses research design that proves or disproves the hypothesis. Outside of best-in-class firms, many of the variables against which customers are currently measured do not associate strongly with likelihood to buy more, buy more often, or favourable disposition towards the supplier. Therefore best-practice in measuring customer satisfaction focuses more on identifying variables that are specific to the customer of a particular firm or category – not all firms. And variables that will drive a commercial objective – such as trial of new products, or margin growth.
So what does good look like?
The design of the research is significantly different in best-practice. For ease, we will refer to this as “engagement research” rather than “satisfaction”. Satisfaction is seen as backward-looking, and tells what did happen, and how the customers did regard performance. But even then, off-the-shelf satisfaction research still does not associate or correlate research variables with performance.
The research in an engagement project would identify through qualitative practices (often missing in traditional customer satisfaction work) what is important to your customer. These would then be quantitatively ranked. Data from your own company would then be cross-referenced with this ranking, and the quantitative phase could begin.
In some projects that B4P has done in this area, there are over 25 strong associations between the business objective of, for example, growth, and the variables that drive growth. In other words, there are 25 ways you can grow your business that your competitors will not be able to quantify or even identify as growth levers. In omnibus research…competitors all know the same variables as you. But those variables generally don’t associate or correlate to business growth anyway, so most of the companies are improving areas of performance that don’t necessarily relate to growth. They are doing the wrong things better.
A new trend in customer satisfaction is Net Promoter Score. In this the vendor of the research determines which variables are important to your objective! If this sounds wonky…it’s because it is. For example, the vendor tells you that customers should want to refer your product/service to others. Common sense suggests that’s desirable. But is that referral more important than, for example, how they feel about your brand, in achieving your objective?
- Posted by david
- On July 9, 2013
- 0 Comments