Increase Profitability Through Customer Satisfaction
Part 1 of 3
Let’s face it – the goal of any customer initiative is to increase sales or profitability. Whether you’re trying to improve customer satisfaction or reinforce employee training, the ultimate objective is to make more money.
If you can’t link your current customer initiatives to a return on your marketing or operational investments, you’re not alone. We continuously speak with companies that face the same challenge.
This tutorial is designed to help you get more value from your customer satisfaction program so that you can answer “yes” to those all-important boardroom questions:
• Is it actionable?
• Does it make us money?
Keep Your Eyes On The Target
Any program designed to increase customer satisfaction should be carefully linked to marketing and sales data. Many programs lose focus of the ultimate goal – higher sales or profitability. Keeping the spotlight on revenue is the first step to a successful program.
In the sections below, we explore the components of a well executed customer initiative that drives revenue and profit through increased customer satisfaction.
Planning Is Essential
Before a single customer is surveyed, you should conduct stakeholder interviews at various levels of your organization. This step is essential to:
• Determine challenges and motivations at each level of your organization;
• Identify past pitfalls and potential barriers to success; and
• Gain the buy-in from key constituents.
15-30 minute interviews can be conducted in person or by telephone. Stakeholders should be selected based on their experience, knowledge and level of peer influence.
Timing Is Everything
While most customer satisfaction programs are ongoing in duration (e.g. 24/7/365), we feel it’s necessary to quickly address this point. Customer satisfaction programs that start and stop intermittently may provide a periodic measurement of customer satisfaction but they also come with the following drawbacks:
• Customer data is outdated by the time it is received by your stakeholders.
• You must wait months to see if your actions have improved satisfaction.
• You lose buy-in, awareness and momentum between measurement periods.
• There are usually additional costs to start and stop sales initiatives intermittently.
The Right Survey Methodology
There are many ways to obtain information from your customers. Many companies use a multi-pronged approach to gathering customer insight, while others focus their resources on just one methodology that works really well.
Each methodology must fit within your program budget and be right for your customers. Here is a guide to some commonly used customer survey methodologies:
Web surveys are the most cost-effective means of gathering customer data and can yield the highest response rates, proving that customers of all ages and locations are using the Internet. The right service provider can build in mechanisms that dig deeper and gather more in-depth insight based on how the respondent answers certain questions. Survey changes can often be implemented very quickly and at no cost, which means you can continuously evolve your customer survey to capture deeper knowledge.
IVR surveys require customers to call a toll-free number and follow a set of prompts to answer your survey. Questions are read to the respondent, which means you will need to hire voice talent to record a script. This can make it difficult to implement survey changes on the fly. Also, your survey should be kept short and you are limited to the number of answer options presented to each respondent. Capturing open ended (verbatim) data can represent an additional cost.
SMS surveys allow consumers to respond to your survey from their mobile phones, while on-the-go. Even more so than with IVR surveys, the number of questions asked should be kept to a minimum and you are limited in the number of answer options presented to respondents. With more and more of our population using mobile phones, this can be an excellent methodology for taking quick polls from your customers.
Face-to-face interviews allow you to explore issues in more detail but an experienced moderator is required, resulting in a low sample size and high cost per interview. Also, participants are often not geographically representative of your actual customer base because these interviews usually take place in selected urban cities.
Telephone interviews allow a certain amount of probing to be built into the questionnaire without the use of a professional moderator. This results in a greater volume of customer surveys and the telephone allows for a more geographically representative sample. However, using a call center to administer your surveys is still one of the higher cost methodologies. In addition, consumers are more and more reluctant to accepting telephone survey invitations.
Paper surveys are the oldest surveying methodology. Unless you are surveying very small groups of customers, paper surveys are not at all cost effective due to the printing, shipping and manual data tabulation involved.
Read "part two" of this tutorial…
Read part two of this tutorial, which covers: Survey Design and Identifying Revenue Drivers.
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