Measuring Customer Satisfaction

Whether you’re selling hot dogs or insurance, keeping your customers satisfied is essential to the survival and success of your business. Let’s take a broad look at this topic and then consider some specific aspects of customer satisfaction that you should probably be measuring.

Beyond Smiley Faces

Broadly defined, customer satisfaction is a measurement of how well your product or service meets your customers’ expectations. If you are not meeting your customers’ expectations, they may start to look elsewhere for their hot dogs or insurance. If you are meeting their expectations fully, they are likely to stick with you, unless they think one of your competitors is offering something better.

If you exceed their expectations, not only will they stick with you but they might even recommend you to their friends. A customer satisfaction survey usually includes a general question like, “Overall, how satisfied are you with Henry’s Hot Dogs?” That’s not a bad question, but the information it provides is not all that useful. What does it mean if a customer gives your product four smiley faces rather than five? How will you use that information?

To get more valuable information out of a customer satisfaction survey, you need to be more specific. People have expectations about all sorts of things. An effective survey about homeowners insurance might ask customers how satisfied they are with your product in terms of:
– Price
– Ease of purchase
– Breadth of coverage
– Helpfulness of customer service personnel
– Explanation of policy terms

You might also ask customers which of those items is most important to them in deciding whose policy to buy. Then you can use a technique called multivariate analysis to determine which areas of customer satisfaction offer the greatest opportunities for improvement. For example, suppose that most customers thought “breadth of coverage” was “very important” but they were only “somewhat satisfied” with the coverage your policies offered.
This would obviously be an area that you would want to address. (This is a simplified example. Multivariate analysis can actually produce much more sophisticated measurements of how different aspects of customer service are related.)

Measuring the Intangibles

It’s important to ask customers how they feel about the attributes or benefits of your products, but you can’t stop there. Purchasing decisions involve more than just an objective evaluation of competing products. These decisions are also affected by brand loyalty and other intangibles that can be difficult to measure.

One way to evaluate brand loyalty is to simply ask how long a customer has been using your products. You might also ask how often a customer chooses products from your competitors. A less direct approach is to ask customers to rate your products in terms of overall quality. This type of question will not give you detailed information, but it will tell you how customers feel about your products in general. You can also get a sense of this by asking two crucial questions:

– Do you think you will purchase our product the next time you need hot dogs?
– Would you recommend our products to friends?

Some marketers believe that the second question is essential in any customer satisfaction survey.

Keeping It Current

Markets are constantly changing. New competitors and new products may enter the field, and you may need to adapt to changes in the needs and expectations of customers. To keep up with these developments, you need to review your customer satisfaction surveys frequently to make sure you are asking the right questions.

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