how happy are your customers measure customer satisfaction

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How to measure your Customer satisfaction


  • 1. Kathryn Saducas Partner marketing manager Are your Customers Satisfied?

2. The importance ofcustomer satisfactionto your business 3. Customer focusedorganisation 4. Goals of Customer Focus: End goal of customer focused strategies is the same: Boosting retention and repurchase = more sales!!! Creating Better Products or Services Offering compelling customer experience Building deeper customer relationships 5. Business Performance Factors Contribution to Shareholder Value Source: Price Waterhouse Coopers, 2002 6. Customer Satisfaction = Profits

  • Knowing what drives customer loyalty is important to your companys financial health
  • Repeat customers and new customers from referralscontinuous revenue streams
  • Disloyal customers are expensive to replace
  • Attracting NEW customer is 4 x cost of retaining existing customer
  • 5% increase in customer retention75% in aggregate lifetime profits from that customer

7. What are your customers worth?

  • S= average revenue per customer sale
  • C= costs of servicing customer
  • V= expected # sales per year
  • Y= expected # years customer will use your services
  • A= cost of acquiring new customer
  • N= # of referrals from customer
  • F= correction factor
  • Lifetime Value of Customer (CLV)
  • =
  • [(S-C)*(V*Y)-A+(A*N)]*F
  • OR
  • Margin * # sales cost of acquisition + savings from referrals * correction factor

Customer Lifetime Value = CLV 8. What are your customers worth?

  • S= average revenue per customer per sale
  • C= costs of servicing customer
  • V= expected # sales per year
  • Y = expected # years customer will use your services
  • A= cost of acquiring new customer
  • N= # of referrals from customer
  • F= correction factor
    • S= $20,000
    • C= $5,000
    • V= 2
    • Y= 5
    • A= $1500
    • N= 4
    • F= 1.2
  • CLV = [($20000-$5000)*(2*5)-$1500+(1500*4)]*1.2
  • CLV = $185,400

Customer Lifetime Value = CLV 9. Why Customer Sat. is important? Study by Le Beouf: the reasons why customers no longer dealt with a particular supplier 10. A customer satisfaction program 11. Customer-Focused Initiatives Customer Value Attache Nokia product engineer goes on-site with customer for up to 1 month to learn about challenges and show how Nokia can add value Customer Champion Create a customer champion Director who is responsible for championing the voice of the customer through the organisation. Customer Success Engineer Team Centralised group that diagnoses root causes of complex customer problems and implements solutions across business Everyday Life Observation To gain deeper understanding of customer, send video crews & TV cameras into 80 households around world to capture customer daily routines Customer Charter & Advocate Independent customer advocate whose role is to resolve particularly difficult customer and business problems. Customer charter to improve customer experience with service. Customer Partner Experience Organisation-wide customer and partner satisfaction index to provide a holistic view of business health and trigger specific corrective actions where necessary. 12. The 6 Ps of Marketing 13. Customer Feedback Program

  • With a well constructed feedback program you can get key insights into customers to:
    • Identify key drivers of customer experience
    • Glean insights into health of your company
    • Detect early warnings of any erosion of your relationship or value proposition

14. Customer Program Activities

  • Assess internal root cause for customer perceptions satisfaction drivers
  • Derive action plans to resolve most critical issues set your objectives
  • Implement these actions
  • Track your progress with ongoing customer research
  • Link these customer metrics to your financial results & staff incentives
  • Tell your customers how you used their feedback

2 1 3 4 5 6 15. Case Studies

  • Rice University Case Study showed customer satisfaction improves customer retention and company profits
  • Methodology:
    • 50% surveyed (group 1) and 50% not surveyed (group 2)
    • Group 1 were twice as loyal to company
  • Conclusion?
    • Customers want to be coddled
    • Surveysincrease in auxiliary product sales
    • Surveys create opinions

16. At Microsoft

  • Worldwide Survey Apr & Oct
  • Customer Escalation Tool
  • RMTP Response Management Through Partner
  • Feedback forms at events (9 point scale)
  • Tactical Research Qualitative & Quantitative
  • Anecdotal feedback
  • Roundtable sessions

17. Understand Satisfaction Drivers CustomerSatisfaction Access to products & Services Emotional Factor ServiceQuality Price ProductQuality 18. Value Mapping low high high satisfaction value support product reputation Sales staff Brand service Easy to do bus with Bus expertise 19. Example of Value Mapping Service Deployment Time [30%] Reputation and customer testimonials [25%] Account Managers/ Sales experience [15%] After Sales Support [10%] Business Process [10%] Market/Branding [5%] Innovation [3%] Strategic Direction [2%] low high high satisfaction 123456789 20. Avoiding the Pitfalls

  • Listening to the wrong customers
  • Incorrectly identifying customer priorities
  • Failing to consider strategic objectives
  • Failing to align organisation around execution
  • Failing to get paid by customers for new value
  • Losing momentum campaign mentality

21. Case Study GAP Clothing 22. Ways tomeasurecustomer satisfaction 23. Different forms of measurement Annual Customer Satisfaction Surveys Focus Groups (Formal/ informal) Online Questionnaires Phone or Fax Surveys Feedback Forms Online Polls Customer Service Feedback CRM Software Other Surveys(Benchmarking, Employee, Org Alignment) 24. Partner Program - CSAT Tool 25. 26. Microsoft CSAT Points Awarded Partners may only survey the same individual once every six months. Only the first eight individual responses per customer organisation are eligible toward Partner Points calculations.Participation Individual Customer Responses Points 10-24 5 25-49 10 50-99 15 100+ 20 Net Satisfaction(20+ responses required) NSAT Score Points 165-174 10 175-184 15 185-200 20 27. Measurement & Reporting

  • Satisfaction can be measured on a scale
  • Align business functions around a single customer-focused metric

NSAT= (VSAT-DSAT) +100 VSAT = 8+9 DAST = 1 to 4 28. Food for Thought The name of the game should be about"giving customers a memory and experience so great that they'll want to repeat it."The game is not all about getting that scorethat darned customer scoreany way possible. 29. 10 Golden Rules

  • Believe customerspossess good ideas
  • Gather customer feedback at every opportunity
  • Focus on continual improvement start with top 10 issues bugging your customers
  • Solicit good and bad feedback
  • Seek real time feedback
  • Dont spend vast sums of money
  • Make it easy for customers to provide feedback
  • Leverage technology to aid efforts
  • Share feedback throughout the company
  • Use feedback to make quick changes

1 2 3 4 5 6 7 8 9 10 30. In Summary You cant move a mountain in a day, but you can make it easier to climb by clearing a path. 31. Information Source:

  • Why track end to end customer experience?TNS Prognostics White paper
  • Driving Customer-Focused Decision Making Marketing Leadership Council USA


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