Customer Satisfaction Surveys

Profitability relies on customer loyalty and repeat business.This is precisely what makes customer satisfaction research critical for optimal performance. The bottom line is high levels of customer satisfaction lead to higher and more stable revenues.

Customer surveys are the cornerstone of a formal feedback process that measures satisfaction with products and services.  The data they generate can be used to make better and more effective business decisions.

Studies show that “heavy users” are the source of most business profits.  The 80/20 rule — which posits that 80% of all revenues come from 20% of all customers — applies to most businesses.  This assumption highlights the importance of satisfying key customers. 

Elements of Customer Satisfaction

Effectively designed customer satisfaction surveys help businesses to candidly assess their strengths and weaknesses. The direct impact of this realization can be significant: Are our products and services meeting customers’ needs? How can we retain customers and increase loyalty, brand value, profits? How can we optimize the sales process and customer interaction? How can we tilt customers’ decision-making processes in our favor? What more can we learn about buyer behavior? Less emphasized but equally important reasons for conducting research include: Collection of “out-of-the-box” ideas from heavy users

The single most important thing to remember about any enterprise is that there are no results inside its walls. The result of a business is a satisfied customer. - Peter Drucker Business Consultant

• Awareness of substitute products from infrequent buyers
• Suggestions for improvements
• Shaping strategy through identification of trends and issues
• Recognizing efforts that add value

The key is to engage customers in ways that produce desired results.  This involves determining appropriate touch points and follow-up procedures to engender satisfaction at every step in a customer’s decision-making process. 

The Customer Decision-Making Process

Understanding the customer decision-making process is the cornerstone of achieving high levels of customer satisfaction.  The five stages of the decision-making process are:

Need Recognition — When, if at all, do customers first consider your product or service?  What triggers and motivates their desire to purchase?  What need or want are they looking to fulfill?  What factors or attributes come into play, and what is their relative importance? Search — When and how do customers obtain current information about your product or service?  What are their informational sources?  What is their current level of awareness of your product or service?  What is their current perception or image of your brand or company?  Who are the gatekeepers and influencers?

Satisfying the customer is a race without finish - Vernon Zelmer, Managing Director of Rank Xerox

• Alternative Evaluation — What criteria do customers consider when deciding to buy?  How important are those criteria?  What criteria do they consider when evaluating competitive products or services?
• Choice/Purchase — What leads to a purchase decision?  What's the process, and what influences it?  What is the purchase experience like from the customer's perspective?  How can you expedite or enhance the purchase process?
• Post-Purchase Evaluation — What happens after the purchase?  What best promotes ongoing satisfaction and loyalty?  What leads to disappointment and disengagement?  What is their current level of satisfaction and how could it be improved?
  

With each step there is an opportunity to create a positive impression in a customer’s mind, thereby increasing satisfaction and loyalty.  Customer satisfaction research can provide first-hand information about ways to achieve this goal. 

The Cost Side of the Equation

Research conducted by Bain & Company found that an increase of 5% in customer retention can increase profits by 25% to 95%. The same study found that it costs six to seven times more to gain a new customer than to keep an existing one.  Additional research has shown that:

Critical Success Factors

Two of the many factors that can contribute to corporate success are Customer Loyalty and Customer Lifetime Value.  Please call iResearch to discuss many others.

Customer Loyalty:  A customer’s tendency to choose your company’s product over a competitor’s is absolutely critical for your survival.  In cultivating customer loyalty, the only perspective that matters is the customer's perspective of good customer service.  From your perspective you may be providing great service, but if your customers disagree, you're really not providing great service and customer loyalty is not being cultivated.

Customer Lifetime Value:  Using customer feedback to adopt “best practices” and build loyalty will ultimately increase customer retention.  This, in turn, will increase the lifetime value of each customer through repeat purchases.  Satisfied customers will act as ambassadors by spreading good word and recommending your product or service.

The Link between Employee Satisfaction and Customer Satisfaction

Studies have shown that companies that make customer and employee satisfaction a priority, tend be more profitable, have greater brand value, and enjoy stronger growth.  These companies have a core belief that today’s employee satisfaction, employee engagement, and employee loyalty will influence tomorrow’s customer satisfaction.  This linkage, often called the Value Profit Chain, can impact both the revenue and cost side of a business.

The Bottom Line

The cornerstone of customer satisfaction is understanding the customer decision-making process.  Customer satisfaction research will understand and monitor the pulse of your customers and ensure that your business is meeting their needs every step of the way.

Ideally, your customers should complete a survey when a transaction or product usage is still fresh in their minds.  Ensuring that you have met their needs and expectations will pay for itself many times over.

The information you net from this strategy will put the ball squarely in your court, and it will enable you to decide how to shape your business strategy.

Call today to find out how iResearch can help you to benchmark, monitor, and improve customer engagement and satisfaction.