Do you really need satisfied customers?
Customer Satisfaction is a great measure of business performance and when combined with other measures such as recommendation demographics and reasons for the levels of satisfaction it can offer a real opportunity to understand your customers and improve your business.
It is well established that organisations with the higher levels of satisfaction have higher turnover, higher customer loyalty and larger market share than other organisations.
Why would you not want your customers to be satisfied?
Simply because measuring satisfaction alone is not enough. You really want to understand what proportion of your customers are highly satisfied (or totally satisfied or very satisfied) and why this is the case and then act to improve your service.
You see there is a difference between a satisfied and a very satisfied customer. To understand this difference we need to understand what satisfaction is. The Oxford English dictionary defines satisfaction as
“Fulfilment of one’s wishes, expectations, or needs, or the pleasure derived from this”
High satisfaction is about exceeding expectations
Essentially satisfaction is about having your expectations met: I wanted a widget and I got a widget = satisfaction. The difference between satisfaction and high satisfaction is that high satisfaction is about delivering service above and beyond your customers’ expectations.
High satisfaction is about the human experience with your brand
My experience of analysing satisfaction surveys suggests that this is essentially about personal interactions that create memorable and enjoyable experiences for customers. This might be as simple as a member of staff helping a customer or the experience in the store or online being fun and enjoyable, simple or memorable.
So high satisfaction is: I wanted a widget and I got a widget + memorable positive experience = high satisfaction.
Satisfied customers are simply having their expectations met but nothing more. This is a reason is why satisfied customers leave for competitors and why aiming for these “functionally satisfied” customers is not a strong enough measure, particularly in competitive markets.
This is why measuring customer satisfaction should not be simply about overall levels of satisfaction alone. That is only half the story. For example seeing 90% satisfaction does not explain the depth of that satisfaction. For example what if all 90% are just satisfied? Or are 85% highly satisfied?
The Harvard Business Review reported this in an article called “Why satisfied customers defect”:
“Except in a few rare instances, complete customer satisfaction is the key to securing customer loyalty and generating superior long-term financial performance. Most managers realise that the more competitive the market, the more important the level of customer satisfaction. What most do not realise, however, is just how important the level of customer satisfaction is in markets where competition is intense, such as hard and soft durables, business equipment, financial services, and retailing. In markets like these, there is a tremendous difference between the loyalty of merely satisfied and completely satisfied customers” http://hbr.org/1995/11/why-satisfied-customers-defect/ar/1
Measure depth of satisfaction and then understand what are the differences between these customers and less satisfied ones
I have noticed this in my own work, I was recently in a meeting where the client stated that they had questioned whether to continue their satisfaction survey because the results were not changing. I pointed out that they were only measuring overall satisfaction not the depth of satisfaction and that it was the way the results were being reported that had to change rather than the survey approach.
A good client of mine has seen only a small change in their satisfaction with an overall satisfaction level of 97% in 2014 up 5% over the past 8 years. However over the same period the proportion of very satisfied customers has risen 15%. So whilst overall satisfaction has remained fairly steady the proportion of highly satisfied customers has increased. Understanding what makes customers more satisfied has helped them concentrate on the levels of service that matter most to improving satisfaction – this is making a difference to their customer service and also to their levels of turnover.
What you should do?
So what should you do? First you should certainly look to measure customer satisfaction. Secondly you should measure depth of satisfaction and where possible reasons for the satisfaction. Third you should then understand what are the differences between customers with different levels of satisfaction. Finally you should act on these results to improve levels of customer satisfaction and the benefits to this brings such as improved loyalty, satisfaction, turnover and market share.
CJM Research can help you do this. contact us to start improving your business.