The starting point when designing customer loyalty programs should be understanding what your customers care about and how well you are meeting their expectations. Unfortunately, many attempts at customer satisfaction measurement fail to include all three critical elements in the customer loyalty survey and so fail to provide useful information to the business.
By not including all three critical elements the results of many customer loyalty surveys are worthless. Don’t get me wrong, they are often interesting but ultimately worthless because you get results but have no idea what to do with them.
For instance, have you ever heard these comments after you distributed your results internally?
"Gee, we scored 76 for customer satisfaction this month I wonder if that’s good enough?"
"Wow, we improved 10 points from our last customer loyalty survey I wonder why?"
"Oh no, our customers really hammered us on documentation but I don’t know if that matters or even how to improve it."
Moving from interesting but worthless results to interesting and useful results is not actually that hard. In fact all you have to do is start with a customer satisfaction measurement approach that includes three critical elements.
1. Overall Customer Satisfaction index/indices questions
It seems odd to me that many customer loyalty surveys never ask theses key questions. They ask loads of detailed questions about the color of this and the time for that but at the end of the day you need to know how much customers like you as a business and match that to customer loyalty, i.e. profit.
Luckily this is a simple problem to solve because there are really only two questions that you can ask:
- "Please think about all of your experiences with Company X. Please rate your overall satisfaction in your dealings with them, where 10 is very satisfied and 1 is very dissatisfied?"
This is the standard customer satisfaction question and research has shown that the higher the score on this question the higher the customer loyalty. But be warned, for most industries the relationship is not linear and you need to be rating very high on this scale (9s and 10s) to have real impact on loyalty.
- "How likely is it that you would recommend Company X to a friend or colleague, where 10 is very likely and 1 is very unlikely?"
This second question has been popularised by the research done by Frederick Reicheld and his development of the Net Promoter Score*. Analysed correctly this has been shown to be a very good indicator of customer loyalty.
2. Satisfaction driver questions
Now that you have an overall customer satisfaction measurement you need to understand what drives customer satisfaction for your business. To do this you need to include a set of questions that measure your performance on the different drivers of customer satisfaction in your business. The goal here is to understand how you perform on each driver AND determine which drivers are most important.
These are the most common questions you see in surveys, for example:
"How do you rate the technical competence of our staff?"
"How accurate and complete was our documentation?"
"Did we answer the phone quickly enough?"
With this information and a little bit of statistical analysis (correlation and regression techniques) you can determine which elements of your business are most important in driving customer satisfaction.
3. How can we improve questions
So with the previous two question types you know your customer satisfaction level, which elements of your business drive customer loyalty and your score on each element. Okay, you’re at the final hurdle you know what is wrong and what needs fixing but how do you fix it? This is where the last element comes in: how can we improve questions.
There are two versions of this question: general and specific
- General questions cast the net widely and get the top of mind response for you whole business:
"Please tell us the one thing you would like to see changed about us?"
- Specific questions are tied to a single attribute:
"How could we improve our responsiveness to you?"
Notice both types of question are open (no scores out of 10) responses. Using them you should get some good ideas about how to improve your business.
Well, now you have everything that you need to improve customer loyalty. The only thing left to do is get out and make changes to your business. Oh and then do it all over again next quarter – remember customer satisfaction is a journey, there is no perfect customer satisfaction.
Adam Ramshaw
Director
Genroe
www.genroe.com.au
© Genroe Pty. Ltd.
*Source: "The one number you need to grow", Frederick Reicheld, Harvard Business Review December 2003
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