Customer Satisfaction - Old Hat or Great New Stuff?
Jeff Ryall
The new quality management standard, ISO 9001:2000 requires that organisations monitor customer satisfaction. Good companies will turn that requirement into a real opportunity to jump ahead of their competitors. Ordinary companies will struggle.
The initial motivation might be to maintain certification, but the value, when done properly, is much greater. Recent research suggests that customers are the leading source of innovative ideas for growth. A major benefit is achieved when customer satisfaction monitoring is integrated into a program to retain customers. One of our clients started a customer partnership program. When GST was introduced they found they could delay its price effect on these customers for 6-18 months, because partnership agreements were in place. Getting close to their customers allowed them to protect them from price rises for a time. This strengthened loyalty and helped maintain business in a very tight market.
While a survey should never be the only way you get feedback from customers, in many cases it is vital. Make sure that it is designed well the first time you use it. More than once we have been called in try to “save” a bad survey. Surveys send a signal to your valued customers. Make sure that it creates a positive, professional impression with them.
If you can’t define customer satisfaction, you can’t measure it usefully.
Customer satisfaction is a moving target. If your definition is five years old, throw it away and start again. As customers, our specifications and expectations are constantly changing. This is readily apparent in areas such as financial services, supermarkets, and cars. In some cases, the Internet has been responsible for accelerating the change.
Simply asking your customers if your quality specifications are right is a recipe for error. They’ll usually say “Yes”. It’s not that they want to be nice, but it’s not their job to work this out for you. They often accept the current situation, even though they’d really prefer something better.
Don’t rely only on your own people to come up with the specifications. Often there are varying and conflicting views within an organisation. Besides, the supplier point of view is inherently different from the customers’. When we ask managers for their view of what is important to their customers, they are often surprised when the customers have different, sometimes radically different, perceptions. You might be surprised to hear that this also applies to sales people. Often, the salesman’s litany is “Lower the price”. If this were all that was important, then the market leader in every segment would be the cheapest.
Spend time with your customers. Look behind appearances, for the hidden need. Looking outside your own market can sometimes be helpful.
Are you getting a payback?
High, relative customer perceptions of quality should have a payback. If you can’t see the effect on sales, you’re doing something wrong.
Do you have the right customers? How do you compare with your competitors? Are you addressing a large enough part of the market? A complaining customer is one of your most useful sources of information. That’s why some companies reward them.
Survey Sceptics
For most organisations a customer survey is an important starting point, and the more customers you have, the more likely it is to be important.
However, there are often people in an organisation who distrust customer surveys. These can be people who are used to dealing with clear-cut facts and figures.
Superficial Differences between Surveys
Have you heard the complaint, “Why can’t they make up their mind whether a 5-point scale or a 4- or 10-point scale should be used?” The important thing here is that the survey is sensitive enough to detect small but significant changes in customer perceptions and that results can be compared over time to identify trends.
Subjectivity
Surveys are subjective. Does this make them unreliable? Not really. This is a case where subjective perceptions need to be confronted and managed.
Variation
A customer’s responses change from one time to the next. Your competitor’s activities, or the media, can have an impact. Does this make a survey unreliable or irrelevant? If you have sampled your customers, expect some variation.
The value of a survey can be as much in the questions it raises as in the answers. Do not overreact to a single weak result. Look for trends and explanations. Be sure you have asked the right person. Is that person a decision maker or influencer? What is their role?
Bias
Bias is a serious risk with surveys. It is often very difficult to detect, most of all by people within the organisation.
There can be many sources. Subtle differences in the wording of questions can cause it. Sampling bias is another cause of bias. There is the case of the textile company that budgeted to produce ten times too much plain gray material, because their survey only asked men’s outfitters their needs, but then applied the result to forecast the need from the women’s market as well.
Consider the potential distortion if your survey is filled in by the secretary and not the decision-maker.
The issues in surveys are not different from those in equipment calibration - reliability and validity.
What’s important?
In the end, it is what is done with the knowledge gained that separates the winners from the losers, that allows some to jump ahead of the pack. However, management is liable to be scepical of the information unless they have confidence in it, that it is valid and reliable. Quality Award Partners will be running a workshop on survey design and administration. Contact us if you want to be kept informed.
Tel. 03 9844 2111 or qap@qap.com.au