design a better business strategy with customer satisfaction indicators

DESIGN A BETTER BUSINESS STRATEGY WITH CUSTOMER SATISFACTION INDICATORS

Based on www.bscdesigner.com/better-strategy-with-customer-satisfaction-indicators.htm

By Aleksey Savkin, bscdesigner.com

BSC DESIGNER

http://www.bscdesigner.com/


CUSTOMER SATISFACTION METRCS

• Happy clients lead to more sales and a bigger market share.


• Happy clients lead to more sales and a bigger market share.

• Unfortunately, measuring does not always mean managing.


Let’s talk about:


Let’s talk about:

• Approaches that one can use to measure clients’ satisfaction;


Let’s talk about:

• Approaches that one can use to measure clients’ satisfaction;

• And how exactly this measurement helps to design a better business strategy.

LEARN WHAT CUSTOMERS THINK: PERCEIVED QUALITY

• Customers’ satisfaction is not necessary about the quality of a service provided to them.


• Customers’ satisfaction is not necessary about the quality of a service provided to them.

• Example: customers rate those doctors who were more attentive and cared more about them better, rather than those who were able to provide a better solution to their medical problem.


• Indicator: Perceived Quality.


• Indicator: Perceived Quality. • A client’s rating of the product or service.


• Indicator: Perceived Quality. • A client’s rating of the product or service. • This metric includes more subjective

perception of the product or brand, rather than its actual quality.


• Indicator: Perceived Quality. • A client’s rating of the product or service. • This metric includes more subjective

perception of the product or brand, rather than its actual quality.

• It reflexes an image of the product in the eyes of the clients.


If you want to extend your market share, and if you want more word-of-mouth marketing you need to:



• Track perceived quality rate and



• Track perceived quality rate and• Develop a plan to address issues that you

have found.

MEASUREMENT AND MANAGEMENT PARTS

• Measurement: Quantify and measure customer satisfaction. This measurement is supposed to give an idea about what needs more attention from managers.



• Actual management: once problem areas were identified one needs to develop a detailed action plan to address these problems.



• Actual management: once problem areas were identified one needs to develop a detailed action plan to address these problems.

• It is important that these measurements and management’s parts fit together with each other and the whole strategy.

Learn what customers think1

Surveys and feedback forms

Customer satisfaction metrics




Perceived quality

HOW TO ASK YOUR CLIENTS FOR SOME FEEDBACK

• “How am I supposed to find out the perceived quality score?”


• “How am I supposed to find out the perceived quality score?”

• Ask your customers questions!


There are two types of questions:


There are two types of questions:• Closed questions (can be answered with “yes”

or “no”) and


There are two types of questions:• Closed questions (can be answered with “yes”

or “no”) and• Open questions (cannot be answered just

“yes” or “now” and require the longer answer).


There are two types of questions:• An open question example: Would you

recommend this company to your friend?

The main question of a popular Net promoter score


There are two types of questions:• An open question example: Would you

recommend this company to your friend?• An open question example: Were you treated

like a special client?




Perceived quality

Would you recommend this company to your friend?

Were you treated like a special client?


Choose a good time to ask your questions:


Choose a good time to ask your questions:• Hotel booking websites ask for your opinion in

few days after your stay.


Choose a good time to ask your questions:• Hotel booking websites ask for your opinion in

few days after your stay.• Experienced hoteliers ask for a feedback via

the letter that you will find under your door in the last night of your stay (not when you do a check out and your taxi is waiting outside).


Choose a good time to ask your questions:• Hotel booking websites ask for your opinion in few

days after your stay.• Experienced hoteliers ask for a feedback via the

letter that you will find under your door in the last night of your stay (not when you do a check out and your taxi is waiting outside).

• Software developers ask for feedback when a user tries their software for few days or when a user is going to uninstall it.


• In an example above the way to ask for some feedback (a form that supposed to be filled in while check-in) was not the best one as people simply don’t have enough time to fill in a form while checking-in or during their baggage drop-off.


• During the same flight an airport coffee house asked me to fill in a questionnaire with some open and closed questions. They gave their clients a pen and a small chocolate.

METRICS THAT SHOW CUSTOMER SATISFACTION

Repurchase rate – customer votes with money, but it might be too late

Two problems with repurchase rate:


Two problems with repurchase rate:• First, there might be a long update cycle for

your product.


Two problems with repurchase rate:• First, there might be a long update cycle for your

product. • Second, some products and services are

integrated into a customer’s business environment, they might not be really happy with your product, but will still buy a subscription for the next period just because it is more painful to switch to another service provider.


It is necessary to ask other questions before you face the situation that your repurchase rate is low.



• Repurchase rate mentioned above is a lagging indicator. It shows you what has happened.



• Repurchase rate mentioned above is a lagging indicator. It shows you what has happened.

• You need some early warning signal, perfectly, something that we know affects the ultimate customer’s satisfaction.




Perceived quality

Repurchase rate



CUSTOMER SUPPORT METRICS: RESPONSE TIME

• A customer expects that his question should be answered within 24 hours if it was asked by email,



• A customer needs to be attended to within 3-5 minutes if he called to your customer support.




• And by a response I don’t mean just saying how important this customer is to you and forwarding him or her to another wait list.





• Customers hate support services outsourced to Asia that do everything, but not solve a problem.





• Customers hate support services outsourced to Asia that do everything, but not solve a problem.

• Indicator: Response Time. The indicator’s benchmarks should be adjusted according to certain contact media.




Perceived quality

Repurchase rate

Response time

Abandonment rate



First contact resolution and abandonment rates

• If customer has a problem he wants it to be solved quickly.



• A classical metric that will help to measure this is a “first contact resolution rate.”




• Accordingly, this metric needs to be accompanied with the abandonment rate to see if your customers are patient enough to wait for your answer.




• Accordingly, this metric needs to be accompanied with the abandonment rate to see if your customers are patient enough to wait for your answer.

• Indicator: First contact resolution rate. The number of tickets solved during the first contact.


• If customer has a problem he wants it to be solved quickly. • A classical metric that will help to measure this is a “first

contact resolution rate.” • Accordingly, this metric needs to be accompanied

with the abandonment rate to see if your customers are patient enough to wait for your answer.

• Indicator: First contact resolution rate. The number of tickets solved during the first contact.

• Indicator: Abandonment rate. The number of clients who abandoned the waiting query without an answer from your side.




Perceived quality

Repurchase rate

Response time

First contact resolution

Abandonment rate



METRICS ARE JUST THE BEGINNING OF THE GAME

• Various metrics and KPIs related to customer satisfaction are a little bit overused.

• Do you think that someone will buy from a company only because it answers queries rapidly and solves a problem on the first contact?

METRICS ARE JUST THE BEGINNING OF THE GAME

• Various metrics and KPIs related to customer satisfaction are a little bit overused.

COULD APPLE DESIGN AN IPAD BY JUST FOLLOWING CUSTOMERS’ FEEDBACK?

• A quote often credited to Ford: “If I had asked people what they wanted, they would have said faster horses.”

COULD APPLE DESIGN AN IPAD BY JUST FOLLOWING CUSTOMERS’ FEEDBACK?

• A quote often credited to Ford: “If I had asked people what they wanted, they would have said faster horses.”

• You can ask your customers hundreds of well-formulated questions, but customers are not able to provide you with a detailed specification for an excellent product.

WHAT THEN?

• Should we stop listening to our customers?

WHAT THEN?

• Should we stop listening to our customers? • Not at all!

CUSTOMER SATISFACTION AND THE STRATEGY


• By measuring a customer’s satisfaction a company is supposed to come up with a better strategy by converting abstract metrics and feedbacks into actionable objectives.


• A company listens to its customers; it uses such tools as surveys, feedback forms, customer satisfaction metrics, etc.



• A company analyzes its competitors to come up with more ideas for a product or a service.



• A company analyzes its competitors to come up with more ideas for a product or a service.

• A company researches for new technologies and opportunities; sometimes business opportunity and business anomaly might come together.

Learn what customers think1 Do an additional

analysis2



Perceived quality

Repurchase rateResponse timeFirst contact resolutionAbandonment rate



Competitor analysis



analysis2



Perceived quality




Competitor analysis

Researches for new technologies



analysis2



Perceived quality




Competitor analysis


Find business anomalies



• Later the results are analyzed and according to what company has learned some assumptions are build.


• Later the results are analyzed and according to what company has learned some assumptions are build.

• The company’s leader needs to find a way to develop a product or service that will solve the found problems.


analysis2 Define action plans3



Perceived quality




Competitor analysis



Develop a plan to address issues that you have found.

Source: www.bscdesigner.com



analysis2 Define action plans3



Perceived quality




Competitor analysis



Develop a plan to address issues that you have found.

Develop a product or service that will solve the found

problems.

Source: www.bscdesigner.com


CUSTOMER SATISFACTION IN THE BUSINESS SCORECARD

• Have a look at this sample project created in BSC Designer:– http://www.webbsc.com/document/kpi/customer-satisfaction


• On the KPIs tab you will find some indicators mentioned in this article.


• On the KPIs tab you will find some indicators mentioned in this article.

• They are important for the measurement of the client’s satisfaction, but they are not the only tools one can use to design a better strategy.


• A company needs to do its own analysis of the current situation.



• This analysis involves getting feedback from clients, as well as an analysis of other business factors.




• The result can be formulated in the form of business objectives linked to each other with cause-and-effect connections.




• The result can be formulated in the form of business objectives linked to each other with cause-and-effect connections.

• In BSC Designer, you can see the representation of these objectives on “Business goals” tab and “Strategy map.”


• In this way you don’t just look at customer satisfaction metrics, but have a complex picture of the business strategy.

MORE ABOUT THE BALANCED SCORECARD

Find more insightful articles about the Balanced Scorecard in ”Articles” section at www.bscdesigner.com

BSC DESIGNER

http://www.bscdesigner.com/balanced-scorecard-articles.htm



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