Transforming Market Research into Customer Satisfaction and Retention

Leveraging Market Research into Customer Satisfaction

Webster’s New Millennium Dictionary defines market research as ”the investigation and analysis of consumer needs and opinions about goods and services”. However, according to the American Heritage Dictionary, market research is defined more as “the gathering and evaluation of data regarding consumers’ preferences for products and services.” Thefreedictionary.com complicates matters by defining it as “research that gathers and analyzes information about the moving of good(s) or services from producer to consumer”.

While the three of these distinguished resources provide different “takes” on what market research really is, we prefer to define it essentially as the sum of all three, taking into consideration each of the implicitly stated nuances, by defining it as: “the data collection, analysis and assessment relating to customer needs, requirements, preferences, expectations and perceptions with respect to the goods and services they acquire and use”. In this way, we believe that market research can always be relied on as a tool to support a service organization’s ability to measure, gauge and assess what it will take to understand its customers – and ultimately keep them satisfied and loyal.

We prefer to define Market Research as the data collection, analysis and assessment relating to customer needs, requirements, preferences, expectations and perceptions with respect to the goods and services they acquire and use.”

Regardless of which of these definitions you prefer, one thing remains perfectly clear – market research is a powerful tool that can be used to:

  • Collect and analyze all of the data and information you need to understand your market better, and make your products and services more appealing to your customer base
  • Assist you in identifying and prioritizing market targets that can be exploited to meet your business development goals
  • Provide a foundation upon which all of your customer-focused activities may be supported, measured and tracked
  • Enable you to define, quantify and articulate specific goals and objectives to all affected parties – internal & external
  • Support your ability to measure, monitor and track your customer relationship management successes (and failures) on an ongoing basis.

Measuring Customer Satisfaction Is Important; But, How Do You Do It?

Many services managers mistakenly use “customer satisfaction” and “customer retention” as interchangeable terms; however, they are two entirely separate and distinct things. Customer satisfaction is, basically, “keeping your customers happy”. However, even satisfied customers may consider switching providers for better prices, greater coverage, or just because “it’s time”, etc. As a result, the best way to define customer retention is essentially as “keeping your customers – customers”.

Among the most commonly used alternative measures, or surrogates, for tracking customer satisfaction are typically things like:

  • Increased sales/account revenues,
  • Increased profitability,
  • Repeat services sales/contract renewals, or
  • Improved levels of customer retention.

However, not all of these measures may be either relevant – or accurate, as:

  • Sales/account revenues may be growing more as a result of inflation and/or increasing services prices, rather than as an indicator of customer satisfaction;
  • Increased profitability may be more a result of improved internal services operations and/or cost-cutting, than anything the organization has done to make its customers happier;
  • Repeat services sales may be more the result of customers feeling “locked in” to existing service contracts, or believing it will be easier to “re-up” with your organization than it will be for them to find a new vendor; and
  • Customers may stay with you longer than they want, simply because it is easier than switching.

As such, the primary goals of a Customer Satisfaction research program should primarily be to:

  • Identify the specific product and service attributes that are proven to be important to customers;
  • Provide baseline measurements of both importance and satisfaction for future trend comparisons;
  • Determine the relative strengths/weaknesses of the organization’s current products, services and support offerings;
  • Identify the critical areas requiring improvement;
  • Collect data that can be used to set targets and goals; and
  • Provide a scientific and statistically valid means for measuring and tracking customer satisfaction over time.

Where Should You Focus Your Market Research Efforts?

In considering launching a new (or refining an existing) customer satisfaction/market research program within your organization, there are essentially four questions that you will first need to answer. They are:

  1. Does your organization already have a formal customer satisfaction measurement and tracking program in place? Is your survey research plan designed to yield the specific types of outcomes that are needed to support the organization’s business development plan?
  • Some organizations have no formal customer satisfaction measuring & tracking program; surveys are performed only on an ad hoc basis – if at all!
  • As a result, customer service improvements are probably not supported in a consistent manner, or with all of the necessary data and information to justify making changes – in fact, some problems may go unnoticed, and realistic priorities may not be easily set.
  • If the research plan is not specifically designed to support the subsequent action plan, then you may end up not collecting adequate information to make key decisions.
  1. Should we conduct our customer surveys internally, or should we use an outside market research/consulting firm to design, conduct and analyze our surveys? Which methodology will yield more actionable results? Which way is better?
  • By conducting your customer surveys internally, you may lose the perception of objectivity and, thus, credibility; plus, you run the risk of administering what may appear to your customers to be either an “unprofessional”, incomplete – or even worse – misdirected survey.
  • An outside market research firm generally has the ability to design, execute and analyze surveys more efficiently than your own organization – and can maintain an entirely objective posture throughout the course of the research (e.g., collecting and analyzing responses, providing customer feedback, etc.).
  • Most internally conducted customer surveys turn out to be little more than exercises in public relations, and generate neither statistically valid nor actionable survey outcomes; especially in cases where your service performance is poor, or major improvements are required, it is generally better to go outside.
  1. What type of survey methodology should we use? In person, telephone, mail, e-mail, or a combination of methodologies? How can we tell what will work best with our particular mix of services offerings and customer base?
  • Alternative survey methodologies may reflect substantially different levels of costs, coverage, response rates, statistical reliability and skewness, effectiveness, usability of outcomes, and applicability to the overall business plan.
  • Accordingly, the methodology you choose will dictate – to some degree – the likelihood of generating actionable survey outcomes.
  • E-mail surveys have become relatively inexpensive to conduct, but may not always be the best way to reach all of the customer base that you want to reach; telephone and mail still represent alternative methodologies for some organizations.
  1. Should we be surveying our existing customers, or should we be focusing more on surveying the market prospects that we hope to convert to customers in the future? Where should we be focusing our market and survey research efforts in the short term?
  • The answer is “yes” – to both!
  • In general, customers always come first – you cannot afford to lose the customers you already have (for any number of reasons).
  • However, you may also want to survey the general market base (i.e., prospects) in terms of their awareness and perceptions of your organization, as well as the likelihood of their buying/acquiring your products and services in the future.
  • As a surrogate, you can also survey “New Wins” and “Lost” Prospects” in combination with existing customers to determine what brought them in – or what drove them away – in addition to what makes them happy.

Regardless of which research methodologies you ultimately choose, there are certain guidelines that must also be followed as you begin to collecting the desired customer data and information:

  • First and foremost, do not abuse your customers. Don’t survey them day-in and day-out; they are not on your payroll!
  • Focus on the “need-to-know”, rather than the “nice-to-know”. “Need-to-know” data will always pay off in the long-term, whereas “nice-to-know” data can be particularly expensive if you ultimately do not get much of a return for the amount of time and money you have invested in the research.
  • Collect as much customer data as you can internally, from as many sources as possible, including service activity reports, call logs, call center metrics, KPIs, etc. However, you must remember that while internally collected data is your “reality”; it will be “perceptions” that are your customers’ “reality”. You will need to carefully reconcile these two often disparate sets of objective and subjective findings.
  • Use complementary methods of data collection wherever possible:
  • Ongoing communications is a two-way street; stop … and listen.
  • Get everyone involved – sales and service reps, CSRs, Managers.
  • Utilize trade shows, seminars, workshops, webinars, users groups.
  • Leverage Blogs, tweets, newsletters, e-mails, Website – all with “real” feedback channels.

Once you get started, the key areas you will need to address as part of the customer satisfaction measurement and tracking process will include:

  • Customer attitudes and perceptions toward the importance of the products, services and support they are using, and the levels of performance they are receiving from your organization.
  • Identification and ratings of the principal selection and evaluation factors customers use to rate those services.
  • Customer needs and requirements for those services in total, as well as by key customer/vertical market segments.
  • Levels of satisfaction with your organization’s performance, identification of areas where improvements are required, and what it would take to become their “Total Services Provider”.

Among the key questions that will need to be answered from the results of the customer survey analysis are:

  • How satisfied are your customers with the organization’s existing portfolio of products, services and support?
  • What additional areas of service and support do they need, want, or expect?
  • What can be done to improve current levels of customer satisfaction?
  • How can your organization become more responsive to the needs of its customers?
  • What areas need to be specifically addressed in order to provide customers with “total service and support”?
  • Who makes the decision to purchase your company’s products and services? What message do they need to hear?
  • What are the primary, secondary and peripheral factors used by customers to evaluate service performance?
  • Are all of your customers’ needs being met? To what degree? What are your specific (and relative) strengths and weaknesses?
  • How vulnerable is the organization to losing customers to the competition? For what reasons? How can this be avoided?

What Are Some of the Potential Outcomes of Conducting Market Research?

The key outcomes of a baseline Customer Satisfaction survey program would be the strategic identification, analysis, assessment and profiling of your organization’s existing customer base, in total, and by principal customer market segments, including:

  • Determination of the principal purchase decision makers
  • Relative importance and “weights” of key services attributes
  • Satisfaction with the quality of your products, services and support
  • Correlations between product and service quality, and their
  • respective impacts on overall service performance satisfaction
  • Satisfaction with your organization’s pricing perceived value
  • Perceptions of customer loyalty to the organization
  • Customer usage/purchasing patterns
  • Other key factors likely to impact customer satisfaction

Other key market/business development factors that can also be examined include:

  • Principal types of products/services being used/planned
  • Plans for future purchases/upgrades/migrations
  • Primary “value-added” features used/required
  • Factors of importance used to select/evaluate vendors
  • Satisfaction with present product/service providers
  • Loyalty to present vendors likelihood to switch
  • Overall awareness/perceptions of the organization’s total portfolio of products, services and support offerings
  • Others, TBD

When conducted on a routine, periodic basis, tracking customer satisfaction over time can provide:

  • A comprehensive benchmark, or baseline, analysis, complemented by regular tracking/trend survey “waves”
  • A series of detailed analyses that explain key patterns, trends and areas requiring improvement over time
  • Executive-level management reports and trendsheets that address key patterns and their strategic implications
  • Identification of specific problem areas and recommendations for improving levels of customer satisfaction
  • The ability to develop both strategic and tactical “fixes”, both in total, and by individual customer/vertical segments

Knowing your customers can be an extremely effective marketing tool. The more you know about your customers, the more responsive you can be to their needs and requirements. In fact, we believe that you can never know too much about your customers. Your customers will tell you when they are satisfied, and when they are not; but you have to ask them directly, as they may not always volunteer to provide this information.

That is why customer survey research is so important – because, if you do not regularly ask your customers about their specific needs and requirements, they may think you are either uninterested or – even worse -– incapable of performing better.

The applications and uses of Customer Satisfaction survey results are multifold, including:

  • To establish a formal input/feedback mechanism to obtain critical data/information directly from customers
  • To use satisfaction trend data to improve, or otherwise modify, existing product, service and support features
  • To use the specific results of the survey as marketing tools (e.g., publish an article in a services trade journal, offer a “white paper” on the Web, integrate results into company marketing collateral, etc.)
  • To use the statistical findings, verbatim quotes or other survey results in promotional materials, handouts or mailings

The following represent just the “tip of the iceberg” with respect to what some of your peers have already been able to accomplish:

  • A Help Desk Software company combined a joint User Needs & Requirements Assessment/Satisfaction Survey with a New “Win”/“Lost” Prospects Survey to identify the differences in the way they support existing customers how they attract “new” ones (and also “lose” some along the way).
  • A High-Tech OEM conducted an in-depth, qualitative survey among its machine operators to identify whether both their key product and technical support issues were being adequately addressed – and coordinated.
  • A CRM Software company established a baseline survey, and then tracked changes in its service delivery performance over a 3-year period until all of its quantitative goals for performance improvement had been met.
  • A Medical Device company conducted concurrent surveys of prospects who chose them their competitors to identify patterns of vendor selection criteria and any potential “kick-out” factors that may have been driving some prospects away.
  • A “Brand Name” Third Party Services company conducted routine competitive intelligence updates used to “spin off” competitive vendor New Service Product Action/Reaction reports to assist its services sales force.
  • A Field Service Management (FSM) solution company conducted vertical market research to identify and prioritize new (to them) verticals to target for future business development.
  • A Print/Publishing OEM surveyed customers of a company they planned to acquire to see whether there was a “match” between the two customer bases in terms of customer needs and requirements for the merged service product offerings.

All told, there are dozens of different customer satisfaction- and retention-related issues that can best be identified, measured and analyzed through a specific market research program. As such, the versatility of market research should never be understated, as it can be as narrowly or broadly defined, as necessary; as formal or informal, as required; as expensive or inexpensive, as the budget permits; and as general or customized, as is required.

Summary

In summary, there is a big difference between merely “keeping your customers satisfied” and “keeping your customers – period!” We believe that only by conducting an appropriate series of market research activities can you keep sufficiently up-to-date with the market’s evolving needs and requirements for service, and their corresponding levels of customer satisfaction with their vendors.

Similarly, only by conducting ongoing competitive intelligence research can you fully understand how your organization is positioned in the overall marketplace, and how it can best compete in an intensifying competitive environment. And, only by conducting periodic customer satisfaction measurement and tracking surveys can you measure your own organization’s performance over time, and make the necessary changes to keep your customers satisfied and loyal.

No services organization ever went bankrupt as a result of investing money in market research that delivered actionable results, and provided a positive return on investment (ROI). It is only those organizations that have wrongly invested a great deal of money in “untested” areas that could have been better served by conducting the appropriate market research first.

Are You Satisfying Your Customers Today? If Not, What Can You Do About it Starting Tomorrow?

Establishing a process for improving and maintaining the ability to satisfy your customers does not have to be a daunting effort. It can actually be quite easy – if you plan accordingly, rally the necessary resources together, execute effectively, and manage the results over time. While conducting a large-scale customer survey may take a few months to develop, implement and analyze, there are still many things you can start tomorrow, to provide you with some actionable customer data in the short-term. Read on to see what you can begin doing tomorrow to improve the way in which you are able to satisfy customers.

Many services organizations have found that by routinely conducting customer satisfaction measurement and tracking surveys, they are continually able to

  • Determine the defining characteristics of service and support that best meet their customers’ total needs;
  • Identify, measure, and track changes in their corresponding levels of customer satisfaction;
  • Determine the relative strengths and weaknesses of their customer support organization;
  • Identify all of the critical areas requiring improvement;
  • Collect data that can be used to set targets or goals for improvement; and
  • Recommend changes to their existing customer support processes and organization.

All of these objectives are admirable, important, easy to implement, and will ultimately lead toward the ability of the organization to “fix the system” (i.e., the business processes, operations, and infrastructure) that will empower it to deliver expected levels of customer service and support. However, while it is working hard to “fix the system”, there is always the risk of losing some of the organization’s most “vulnerable” customers in the interim since systemwide improvements typically take a long time to design, implement, manage, and maintain. For this reason, we believe that the most effective customer survey programs are those that also provide all of the information and guidance needed to “fix the system” – and “fix the customer” – both at the same time!

That is why we have developed a unique survey approach that also generates individual Customer Relationship Case Study Profiles that may be used to supplement the overall survey findings, strategic implications, and general recommendations for moving forward with a systemwide “fix”. In this way, while your organization is spending the time and dollars required to correct its systemwide problems, it can also address the specific problems that are impacting individual customers well before they become “kick-out factors”.

Strategies For GrowthSM‘s (SFGSM) Customer Discovery Survey program is designed to help services organizations identify the root causes of problems and recognize “real” opportunities for customer support improvement that will enhance – or bring back – their desired levels of customer satisfaction and profitability by focusing on the key customer-oriented issues that directly affect the business, including:

  • Customer Needs & Requirements for “Total” Customer Support
  • Customer Perceptions, Preferences and Expectations for Service and Support
  • Product/System Evaluation Factors
  • Service & Support Evaluation Factors
  • Gap Analysis/Unmet Customer Needs
  • Existing/Potential Problem Areas
  • Areas Requiring Improvement
  • Changes in Service Performance Over Time
  • Likelihood of Recommending the Vendor
  • Closing Thoughts/Verbatim Comments

Using a time-tested approach consisting of preliminary client management interviews, questionnaire design, and conventional survey research, each Customer Discovery Survey program is tailored to the organization’s specific needs and situation to achieve the maximum output and return on investment. If your organization is ready, it can typically best be served by implementing a full-scale Customer Satisfaction Measurement, Analysis & Tracking Program that can be used to identify, prioritize, and assess the specific actions required to “fix” systematic problems in its overall customer service and support operations.

However, if you are not quite ready to address systemwide change, you can still benefit by identifying the specific areas that will allow you to “fix” specific customers through a Customer Discovery Survey program. In either case, you will still be able to benefit from a detailed analysis and management report that tells you what needs to be fixed, how vulnerable you are to losing customers in the interim, and what timeframes for resolution will likely be required.

In general, SFGSM‘s Customer Discovery Surveys seem to work best for organizations with either a relatively finite customer base, or where a small number of customers represents an important component of the total customer base. Some clients prefer to survey their most valuable and/or “vulnerable” customers as a way of stopping major problems “dead in their tracks”, or preventing minor problems from growing larger. The general rule of thumb is that in cases where there is a large enough sample of the customer base (e.g., let’s say 25 to 30 or more customers), we can prepare both:

  • A detailed analysis of the total respondent sample, thereby providing the organization with a general customer base overview, as well as
  • A set of individual, case-by-case, customer-respondent profiles – thus, providing the ability to “fix” the customers while you’re “fixing” the system!

Many of our clients like the way these individual profiles present detailed, case-specific information that may be used to “fix” customers on a one-by-one basis, as they move forward with the systematic “fixes” that are otherwise recommended by the strategic findings of the survey. In fact, many clients use this information on a prioritized, case-by-case basis as they move forward – concurrently – with their systemwide improvement initiatives.

Basically, each profile presents the key findings from a single customer interview, including side-by-side comparisons of perceived importance vs. vendor performance for all of the performance attributes tested. As such, these profiles are enormously helpful toward gaining a better understanding of exactly how your services offerings (or your dealers’ offerings) are being perceived by individual customers, and where particular points of vulnerability, disconnect, or other potential problem areas may be occurring.

Through these Customer Relationship Case Study Profiles, we can also identify and “flag” areas of moderate, significant or severe customer “vulnerability”, as well as the root causes for why these problems may exist in the first place. Potential “kick-out” factors can also be easily identified. Ultimately, these individual case study profiles afford our clients a unique opportunity to utilize a customer-centric database that allows them to focus on the specific concerns of each interviewed customer, as well as from the results of the analysis of an aggregate, or representative, survey base.

Customer Discovery Surveys are a cost-effective way to determine the current levels of satisfaction – and vulnerability – of your most important (or representative) customers without having to engage in a full-scale customer survey effort. This program allows you to put your major concerns to bed quickly, while giving you a better understanding of where you need to focus – immediately – to get your systemwide support organization running more effectively.

SFGSM’s Customer Discovery Survey program is offered at a fixed price and can be completed in usually in less then one-to-two months, so you can get fast results and know exactly where you stand without incurring any major delays or expenditures. Results are presented in terms of executable actions accompanied by a set of case-specific Customer Relationship Management Profiles that can help you to better understand – and “fix” – each targeted customer.

For more information on SFGSM’s Customer Discovery Survey program, or Customer Needs & Requirements/Satisfaction Surveys, please visit our Blogsite at: http://wp.me/P3Q70i-3o

Going For The “Gold” Is An Olympic Event — Especially for Services Organizations!

In light of the current proceedings of the Summer Olympics in Rio de Janeiro, I thought this piece would be relevant to all those Services Organizations striving to be “World Class” (i.e., “going for the Gold”)

Even Gold May Have a Silver Lining

For Field Services Organizations, “going for the gold” may mean very different things. For some, it may mean nothing more than struggling to generate increased service revenue (i.e. “gold”). For others, it may mean attempting to upsell existing service level agreement (SLA) accounts from “bronze” to “silver” to “gold” levels (is anyone out there still offering “platinum”-level services?). However, another good way to define “gold” levels of service performance is to compare your organization to the athletes striving for their own version of “gold” — an Olympic gold medal!

The Olympic and the services communities share many things in common, ranging from striving to attain perfection to generating a profit after the scheduled event is over. However, they also share another very important attribute in that both communities typically go into an event (e.g. a 200-meter freestyle or an on-site service call, etc.) with some pre-event expectations.

For example, Michael Phelps and Katie Ledecki are, arguably, the world’s best male and female swimmers and, as such, went into the 2016 Summer Olympics in Rio de Janeiro with extremely high expectations. However, it was never a certainty that each would win Gold medals in all of the competitions for which they were qualified to compete. Nonetheless, the expectations were high for each swimmer — even before they arrived in Rio.

While Michael Phelps ultimately ended up winning five Gold and one Silver medal; and Katie Ledecki won four Gold and one Silver medal, each are still acknowledged as the best of the best in their respective fields.

The same situation also exists for services organizations. If your organization is one of the larger ones in the field or has won numerous performance awards in the past, the community will expect it to perform like a world-class provider (i.e. one that is able to meet its customers’ total service needs while delivering world-class levels of performance). By performing reasonably well in the past, the marketplace will also expect you to also perform well — and even better — in the future. The bar is constantly being raised.

For Michael Phelps, the defending champion in the previous two Summer Olympiads, the prospect of not winning several gold medals was unthinkable – although he did not seem to be all that phased that he had to share his Silver medal with two other swimmers. He has won both Gold and Silver medals before, and performed about the same in his most current Olympics.

For Katie Ledecki, for whom this was her first (and, possibly, last) Olympics competition, the bar has been raised again for all female swimmers who will ultimately enter the Olympics in her wake. World class does not necessarily mean “perfect”! There can still be a Silver lining wrapped around your Gold standard.

By the time this Blog post is published, it is also certain that other gymnasts — from the U.S., and around the world — will excel in their competitions as well. However, merely having the goods does not assure Gold in the Olympics — and it is exactly the same for services organizations. You still need to execute — and strive to be as close to perfect as you can.

The Role Of Social Media In Service

Finally, in this year’s Olympics, social media will be expected to take on an even more prominent role than in the past. Virtually all of the Olympic events will be accessible to viewers all around the globe through various forms of Cable and Broadcast TV, Social Media and other types of digital transmissions. As a result, Twitter, FaceBook, and independent blogs will, once again, take up the slack on presenting (and editorializing) all of these Olympics-related events — all in real time! Again, the similarities between the Olympics and the services community abound.

Just as many Olympians are encouraged by their trainers to communicate often — in real time — with their supporters and fans, so must the services community adapt to the practical uses and applications of the available social media. It is truly time to recognize that social media is not merely an acquired taste, but a way of life — especially when it comes to communicating about service.

The 2016 Summer Olympics are nearly over, but already, athletes from all over the world are preparing for the next summer games just four years away. All of the medalists for these upcoming games will ultimately win their respective races by first choosing a field, then acquiring the necessary resources and skills, preparing for the race, and aggressively moving forward.

This is also how most services organizations have historically approached service, especially with respect to meeting — and exceeding — customer requirements. However, you won’t necessarily need to have a medal draped around your neck to be recognized for good service — you simply need to perform at a level of performance that is higher than an ever-raising bar, and let your customers place their perceptual medals around your neck.

Converting Satisfied Customers into Loyal Ones

Just because a customer is satisfied with the technical support and customer service they receive from your organization does not necessarily mean that it will be loyal to you in the long run. Moreover, even “great” service does not necessarily result in customer loyalty. Customers have a large number of service options available to them, from a large and diverse variety of sources. They can use the manufacturer’s or dealer’s services to support their business systems and equipment; they can use the services of a third-party maintenance provider; they can support some of the equipment themselves; or any combination thereof. The choice is theirs – not yours. And they know it!

Not only are there many options for each of your customers to consider, they are constantly being “bombarded” with information about alternative sources of products, services and support from many of these sources. They go to industry trade shows; they read industry trade publications; they read Blogs, posts and tweets; they talk to their peers, both within their own organizations, and at other organizations in the area; and they surf the Internet. As a result, customers are more knowledgeable today than just about ever before with respect to the various options that are available to them.

Using the business imaging systems segment as an example, the service technician may find that for many of his or her accounts, the company’s products and services are not the only ones used to provide equipment service and support solutions. For example, when the technician arrives on-site to perform a preventive maintenance call, and they get off the elevator at the customer’s floor, there may be some comfort in knowing that when they get to the copy room, all they will see is their company’s machines – all up and running, all in heavy usage, and all clearly valued by the end users who use them. However, in some cases, if they were to get off of the elevator at any other floor in the building, they may be just as likely to see a similar configuration of equipment – however, all with another company’s brand name and logo on each of the machines.

Even if your company has already sold and installed all of the business imaging systems and equipment on one floor (or one department) at a particular customer’s facility, and has provided satisfactory technical support and customer service since “day one”, there may still be another company doing exactly the same thing for the customer on another floor (or for another department) at the same facility.

You can assume that the various end-users of this equipment probably talk to one another, compare notes, and ask each other for recommendations regarding new equipment, upgrades, or customer support on an ongoing basis – perhaps over lunch, or at interdepartmental meetings, or with regard to companywide budgeting purposes. In situations where companies move to consolidate their many equipment vendors, someone ultimately has to go – regardless of the level of service and support they have historically been providing – and that someone may be your organization!

From these examples, you can see that even high levels of customer service and corresponding high levels of satisfaction do not necessarily lead to a high level of customer loyalty. Many services managers mistakenly use “customer satisfaction” and “customer loyalty” as interchangeable terms; however, they are two entirely separate and distinct things.

Customer satisfaction is, basically, “keeping your customers happy”. However, even satisfied customers may consider switching providers for better prices, greater coverage, or just because “it’s time”, etc. As a result, the best way to define customer loyalty is essentially as “keeping your customers – customers”.

So what does this all mean, and how can you use these examples to ensure that you are best able to convert as many of your “satisfied” customers into “loyal” ones? What it means is that we, as an industry, continually need to provide our services to our customers even better, faster, and more efficiently than before. And we will probably need to embrace – and embed – new technology into all of our customer-facing processes and offerings (e.g., Cloud technology, remote services, the Internet of Things/IoT, etc.).

You will also need to follow-up with your customers after the call is completed to make sure that everything has been completed fully, and to their total satisfaction. The marketplace – and your customers – have no tolerance for anything less than superior service and support, anymore; and if your organization does not already provide it, they will find another organization that does!

But, how do we do this? How can we move our customers all the way across the “satisfaction” continuum to “customer loyalty”? There are many ways – but it will take a great deal of work, and it will have to be a company-wide effort.

First, you will need to take a hard look at exactly what your customers require – and expect – from the organization, matched against your current and evolving services capabilities, and addressing such questions as:

  • What are our customers’ specific product, service and support needs and requirements? How do they differ from one type of customer to another? How well are we able to meet these specific needs?
  • Does our organization’s current service and support portfolio match its customers’ needs? All of their needs? Their real needs? How can we make sure we are able to design, promote and deliver the right services to meet their specific needs?
  • Where are there gaps, or disconnects, between what we are presently able to do on behalf of our customers, what they truly expect to receive from us?
  • What vendor options and alternatives do our customers presently have? And, how many? What do some of our competitors do better than we do, and how can we best compete against them in the eyes of our customers?
  • What do our customers believe are our greatest strengths and weaknesses? Are we doing everything necessary to promote our strengths while we attempt to improve our weaknesses? Are we providing our customers with all of the information they need to make a fair assessment of our service capabilities and performance? Are we successfully getting our message across?
  • Why does a customer choose us in the first place? Are they getting from us what they were expecting when they first purchased our products? Or signed their original service level agreement? Where do they think there are gaps? Do we know where they are? And how can we best fill them?
  • At the end of the day, how do we want our customers to think of us, our services, and our capabilities? Are we there yet? If not, what do we need to do in the eyes of our customers to get there?
  • Are we using all of the data, information, tools and technologies available to provide our customers with the levels of service they expect? Are there any additional tools or technologies that we should also be using?
  • Are we focused enough on our customers’ needs? Is our Customer Relationship Management (CRM) training good enough – or do we require more training in this area?
  • Do we have our customer service “act” together? How can we ensure that everything we do in behalf of our customers yields a well-defined, positive and measurable outcome (i.e., one that our customers will both recognize, and appreciate)?

These are critical times in the global economic community, and the services segment has never been more serious about its choices – nor more educated in its ability to distinguish between the customer service leaders and the numerous “wannabes”. More end users are getting more information – faster – about your company, and your competitors’ – than ever before. Your ability to gain “true” customer loyalty will be greatly dependent on the ability to live up to the promises your company makes at the original point of sale. If you do not live up to those promises in the eyes of your customers, you will never be able to gain their loyalty, let alone attain high enough levels of customer satisfaction.

The true test of customer loyalty is the ability to keep your customers as customers for the long haul, even if your prices are not always competitive, or your marketing campaigns are not necessarily the most “glamorous”. What the customer ultimately wants is for its systems and equipment to work uninterrupted, and rarely break down. However, when it does break down, they want to have the confidence that its services provider (i.e., your organization) can get things back up and running as quickly as possible (or prevent them from breaking down in the first place via remote monitoring and predictive diagnostics, etc.) – all while continuing to handle high volumes of throughput with ease, minimal interruptions, and little need for human intervention.

If your organization can provide its customers with these high levels of service and support, you just may have a chance at keeping them both satisfied – and loyal.

Managing Customers’ Service Expectations in an Uncertain Economic Environment

For many services organizations, 2016 is likely to be every bit the same as 2015 – full of uncertainty in an unpredictable economy, and in an increasingly volatile world. However, despite all of the uncertainty and volatility, it is important to remember what we all do for a living – that is, we serve our customers by making their jobs – and their lives – easier to deal with on a day-to-day basis. This is what services organizations do, and that model has not changed over the past many years.

So what does this mean? It means that we, as an industry, still need to provide our services to our customers – only better, faster and more efficiently than before. The marketplace has no tolerance for anything less than superior service and support, and if your organization does not already provide it, they’ll find another organization that does!

So, how do we do this? There are many ways – but it will take a lot of work, and you may not be able to do it all by yourself. First, you will need to take a hard look externally at precisely what your targeted market base requires from your organization, addressing such questions as:

  • Does our organization’s current service and support portfolio match our customers’ needs? All of their needs? Their real needs?
  • Where are there gaps between our present offerings, and our customers’ future needs?
  • What additional value-add, premium, and/or professional services do our customers require – but cannot get from their current vendors? (Even from us!)
  • How will the evolutionary changes our customers’ organizations will be going through change their needs for service and support in the future?
  • What vendor options and alternatives do users presently have? What newer options and alternatives will they need – or want – tomorrow?
  • Who are the leading vendors that are presently serving our marketplace, and what are their respective strengths and weaknesses?
  • Where do we stand with respect to the competition? What will it take for us to “make the cut” from a prospect’s “long list” to its “short list”?
  • Why does a customer choose us in the first place? Why do the customers we don’t get choose another vendor? Do we have any “kick-out” factors?
  • When the dust settles, where do we want our organization to be positioned? In fact, how “dusty” are we compared to the competition already?

Second, you will also need to take an equally hard look internally to determine whether your organization’s services infrastructure, operations and processes are sufficiently in place to attain your – and your customers’ – total service delivery goals, addressing such questions as:

  • Are we organized effectively to deliver the right products, services, and support – with the right features and components – to the right customer segments?
  • Is our organizational structure effective in managing all facets of the business? What do we need to do to make it stronger?
  • Do we have the right processes in place to deliver everything we promise? How can we best measure whether they are really working?
  • Are our customer support personnel adequately trained – and empowered – to support our customer base? Can they provide “knock your socks off” service?
  • Do we provide our sales, service, and tech support personnel with all of the tools they require to get their jobs done? What more do they need to become optimally effective?
  • Do we have all of the Information, Communication, and Technology (ICT) systems in place that are needed to run our business? Where are there gaps?
  • Are we focused enough on the customer? Is our Customer Relationship Management (CRM) approach good enough – and is it working?
  • Are we tracking and reporting the right KPIs? Do our managers have all of the data and information they need to make effective decisions?
  • Do we have a formal plan for growing our services and support capabilities along with the changing needs of our customers?
  • Do we have our internal act together? How can we ensure that everything we do yields a well-defined, positive, and measurable outcome?

These are certainly turbulent times, and the market has never been more serious about its choices – nor more educated in its ability to distinguish between the leaders and the “wannabes”. More users are getting more information – faster – about your organization – and your competitors’ – than ever before. And, they’re acting quickly upon the information they receive!

If your message is not adequately articulated – and communicated – to the appropriate market targets, you could be “dead in the water” before you know it – even if your products and services are actually better than the competition’s! The market is looking for your message, and the worst thing that can happen is your competition communicating it to them first – ahead of, and instead of you!

Look around, and you will no longer see any underachievers or “dead wood” competing in the marketplace. They’re all out of business, or about to disappear – one way or the other. What’s left – or what will be left, once the dust settles – are solely the true performers – the services organizations that both “get it” – and “do it”. Be one of the organizations that “gets it” – and goes after it! Don’t follow your competitors – follow the needs and requirements of your customers! And make sure that you utilize all of the external and internal resources that are available to you!

Identifying the Differences Between Customers’ Wants and Needs

In many cases, there may be great differences between a customer’s wants and a customer’s needs; but sometimes there may actually be only very little difference. It all depends on the specific customer. However, the way in which you manage each customer relationship will ultimately make the greatest difference with respect to your prospects for gaining customer satisfaction and loyalty.

Typically, the more knowledgeable customers are about the equipment they are using, the more their wants and needs are likely to be the same; however, less knowledgeable customers may not really have a clear idea of the distinction between the two.

For example, a copying machine customer may want you to clean the equipment while you are on-site if they had been noticing black marks or spots on the copies coming out of the unit; when, in fact, the main reason for the black marks may have entirely been due to a worn-out roller or other part that needs to be replaced. In a case like this, what the customer really “needed” was clean copies coming out of the machine; however, what they thought they “wanted” was simply for the machine to be cleaned.

If you had listened only to the customer, you might have embarked on a faulty corrective action with respect to satisfying their needs. Remember, when it comes to repairing the machine, you are the expert – not the customer!

Similarly, a customer may want you to take the machine apart and put it back together again, or replace a part that is not really defective, simply as an exercise to ensure that the copier continues to run “smoothly”. However, what the customer may really need is a more effective preventive maintenance schedule for the equipment that would otherwise negate the need to actually have to take the machine apart or perform a parts swap, etc.

In this case, what the customer “wanted” was for you to take the machine apart and put it back together again; however, what they really “needed” was a machine that would not break down in the near future as they were preparing for a major copy run. Properly scheduled preventive maintenance would have accomplished this, making any further corrective actions entirely unnecessary.

The best way for you to understand the differences between customers’ wants and needs is to help them to understand the differences in the first place. It all goes back to the “Listen, Observe, Think, Speak”, or LOTS, approach. By listening to the symptoms that the customer is describing once you arrive on-site, and the problems that they tell you they have been experiencing until you got there, you will probably already be in a good position to surmise what is needed. However, upon further observation with respect to the machine, you will undoubtedly have an even clearer picture. In fact, by this time, you should probably already have a good idea of exactly what the customer “needs”.

This would also be a good time to explain to the customer what the initial diagnosis is, what you plan to do about it, and the anticipated amount of time it will take for you to repair it. By providing this information early, you can avoid running into situations where the customer is telling you they “want” one thing and being forced to tell them they really “need” another.

In other words, the best way to avoid a “debate” about what is “wanted” vs. what is “needed” is to identify the problem and appropriate course of action as soon as possible, keep the customer informed on an as-needed (or as-requested) basis, and let them know what they “need” upfront, before they feel compelled to tell you what they “want”.

Of course, it may not always be this easy. There will always be situations where what you feel the customer needs is not what the customer wants. This is where an ongoing educational process between you and your customers needs to take place. This does not mean to say that the two of you need to sit down, read the equipment manuals together, compare notes, and enter into “philosophical” discussions about equipment maintenance; but, rather, that a series of ongoing, brief discussions should take place every time you are on-site to repair the equipment to ensure that the customer understands why the machine failed, what they could do to lessen the chances for failures in the future, what the recommended “fix” is, and why your way of addressing the situation is better than their way. Sometimes, the solution may be as simple as upgrading to a newer unit.

Basically, what the customer really wants is a piece of equipment that is always up and running, ready to use, unlikely to fail, easy to repair, easy to manage, and easy to use. The details with respect to how each of these is accomplished should really be of no consequence to the customer – although they usually are!

Your role, over time, will be to make sure that you always communicate to the customer about what is “needed” to the point where they have full faith in your knowledge and experience, and are willing to defer to your judgment. The more communications there are between you and your customers, the quicker they will get to the point where they will defer to your recommendations, and the quicker the distinction between their “wants” and their “needs” will disappear.

Guidelines for Improving Customer Satisfaction and Loyalty

Everybody talks about their desire to improve levels of customer satisfaction and loyalty, but far fewer actually have a plan for doing so. Most experts would argue that you first have to have a plan – and a process – in place before you can even think about the prospects for any meaningful improvement. In fact, most agree that it is the implementation of a well-defined and managed process that will ultimately drive the organization’s ability to achieve its customer satisfaction and loyalty goals moving forward.

Rallying the troops and incentivizing your customer service reps is a key ingredient for getting things started; but you will still need to have a formal process in place to actually make it happen! Read on to see how you can most effectively get your customer satisfaction and loyalty improvement act together.

In launching a customer satisfaction and loyalty improvement program, you will need to start with the creation and implementation of a sound research process. This process should be designed to create a formal pipeline that allows management to “hear” the articulated (and interpreted) voice of the customer in terms of:

  • Identifying, defining and clarifying specific customer needs, requirements, preferences and expectations for service and support;
  • Identifying the key drivers that impact customer satisfaction;
  • Benchmarking company performance against both customer needs and competitive performance;
  • Determining organization strengths and weaknesses vis a vis the competition;
  • Gaining additional insight into the root causes of customer dissatisfaction, and identifying specific areas requiring improvement;
  • Providing the basis for a dynamic system that can alert management of problems or situations requiring immediate attention; and
  • Identifying priorities, and setting targets for overall quality improvement.

One of the cornerstones of any customer satisfaction and loyalty improvement program is to first benchmark, or baseline, customer needs and requirements and corresponding levels of satisfaction. In order to accomplish this, both the overall survey design and the specific choice of measurement scales to be used are critical. The survey design must address specific issues, including:

  • Who is to be interviewed? (e.g., complete universe of customers; stratified-random sample; new vs. older accounts; users of specific models/services, etc.);
  • How are they to be interviewed? (e.g., in-person/on-site, by telephone, by mail, via e-mail or Internet, leave-behind card, focus group, etc.);
  • Who will conduct the interviews? (e.g., in-house vs. an outside third-party consulting firm);
  • What areas need to be addressed? (e.g., overall company performance, performance for specific product and/or service lines, by geographical service territories, etc.);
  • What question set must be developed? (e.g., current needs & requirements/current levels of satisfaction, future product/service usage plans, likelihood to switch, likelihood to recommend, value-in-use price points/thresholds, problem areas/areas of concern, etc.);
  • How will the results be tabulated? (e.g., in the aggregate, by geography, by vertical segment, by size/type of customer, by length of time as a customer, by specific product/service lines used, etc.);
  • How will the results be reported? (e.g., to whom, in what format/venue, in what level of detail, etc.);
  • How often is the survey to be conducted/tracked? (e.g., quarterly, annually, bi-annually, other); and
  • Other considerations, specific to the unique goals and objectives of your organization.

Regardless of which survey design is ultimately selected, the measurement scales that are used to analyze and report the results back to management must also be carefully chosen to allow for:

  • The creation of an “easy-to-understand, follow and answer” survey questionnaire, from the customer’s perspective;
  • The ability to identify key patterns of responses, and discriminate between small (but statistically important) differences in needs, requirements and levels of satisfaction;
  • The generation of statistically valid, meaningful and actionable survey results;
  • The ease of administration, management and control (from design, through analysis and reporting);
  • The ability to collect data and information for a specified set of areas/issues, and generate a commensurate set of prioritized, action-oriented recommendations; and
  • The flexibility to “go outside the box” to gain specific data and information that will lead to “real” improvement in the future.

Obviously, there is no perfect scale that is best suited for all situations. However, over the past several years, there has been a seemingly wholesale shift to the use of more “demonstrative” measurement scales that first ask customers to assess the importance of each facet of service and support in terms such as “Absolutely Essential (to business operations)”, “Very Important”, “Somewhat Important”, “Somewhat Unimportant” or “Not Important at All” (rather than the “traditional” usage of “Extremely Important”, “Very Important”, “Neither Important nor Unimportant”, “Not Very Important” and “Not Important at All”). While appearing to be only a small nuance in wording of the measurement scales, the newer scales are significantly more demonstrative, as required for a significantly more demanding segment (i.e., the services segment).

Similarly, the newer conventions also ask customers to evaluate the performance of their service and support providers relative to the specific levels of importance they place on each individual factor. For example, the newer measurement scales generally follow a sequence such as “Much Better than Desired”, “Better than Desired ”, “Just as Desired”, “Worse than Desired” and “Much Worse than Desired”. These types of scales typically yield much more realistic patterns of response than the “traditional” variety of scales that simply assessed levels of satisfaction through the use of either nominal satisfaction-related anchors (e.g., “Very Dissatisfied” to “Very Satisfied”); performance-related anchors (e.g., “Excellent” to “Poor”); or no anchors at all (e.g., a “1 to 5” scale).

However, customer loyalty is very different than customer satisfaction. Customer loyalty is generally measured by asking customers whether they are likely to repurchase (or renew); how likely they would be to consider switching (and for what potential reasons); and whether they would be likely to recommend the vendor to another organization that may also be making a purchase decision in the future.

For example, a shipping company’s customers may be asked whether or not they request multiple bids for a particular job, and what factor(s) are ultimately used to make the final vendor decision. Fast-food customers may be asked, assuming that all of the fast food restaurants are conveniently located, whether they would still eat at a particular chain if another chain began to offer a similar line of fast food choices at a lower price. A customer of a regulated utility might be asked whether it would continue to do business with the utility, even if it had other options in the area to consider. An IT manager might be asked if he or she would choose another services vendor if there were no costs associated with switching. And so on, and so on …

It is also important to recognize that in many circumstances, customer satisfaction/dissatisfaction may actually not be a true indicator of either customer loyalty or future purchase (or renewal) patterns. This is because loyalty is generally based on longer-term behavioral and attitudinal aspects of the customer-vendor relationship and, as such, must be measured and analyzed separately in order to accurately identify a customer’s (or group of customers’) “real” level of commitment to a particular company, product or brand.

In any event, we strongly believe that measuring customer satisfaction and assessing customer loyalty are necessities for all businesses, and particularly those that are highly customer-interactive, such as the services and support industry. However, simply because an organization’s customers appear to be satisfied with its products and services today, does not ensure that they will remain satisfied forever. The easiest way to identify customer dissatisfaction is to count the number of customers that have already switched from your organization to another vendor – but the most effective way to address dissatisfaction is to prevent it from happening in the first place!

Designing and implementing an effective customer satisfaction and loyalty improvement program can only be accomplished if the organization makes a total commitment to design, implement, track, monitor and manage its performance and corresponding levels of customer satisfaction through a formal process, and on an ongoing and targeted basis. Through this total effort, the prospects for developing a stronger base of customer loyalty can be greatly enhanced; but the first steps must always start with a commitment to, and the development of, the appropriate processes to get it all done.