Increase Profitability Through Customer Satisfaction
Part 2 of 3

In part one we introduced the concept of increasing profitability by increasing customer satisfaction. Topics included Planning, Timing and Survey Methodology.

In part two below, we discuss equally critical details that will either make or break your customer survey program.

Proper Survey Design

Survey design is the most critical step to a successful customer survey program. You can capture massive amounts of customer research data but it will be useless if you aren’t asking the right questions.

A properly executed program should begin with a “stage 1” customer survey that can later evolve to capture a greater depth of customer insight. Within a short period of time, you will have a finely tuned survey that doesn’t just measure customer satisfaction but targets the elements of your customer experience that have the greatest impact on customer satisfaction and revenue.

Many companies are not asking the right questions, causing them to struggle with the link between customer satisfaction and revenue. Here are the most commonly made mistakes when designing a survey:

•  The customer survey focuses on what's important to the company – not to customers.
•  Survey questions are not actionable.
•  Answer options are not well designed (including degree of rating scale sensitivity).
•  The survey attempts to capture too much information.

To create the ultimate customer survey, you must keep it simple and focused. A good rule of thumb is to request between 5 and 10 minutes of time from your customers, depending on the participation incentive. We typically ask customers for 7 minutes of participation.

Participation incentives generally include entry into a sweepstakes (e.g. grand prize draw), instant win game plays, coupons for future purchases and cash. We recommend and use instant win games for all web based customer surveys to generate maximum excitement and incentive. Overall, the value of your incentive should ensure a desired response rate is achieved. Be sure that the incentive cannot be abused.

Actionable information. It’s a buzz term but two words were never so important, especially when it comes to improving customer satisfaction.

Survey questions must be actionable in an obvious way. For example, a question can directly measure how customers perceive the speed of service offered. If that question rates low, a new process can be implemented to improve on this attribute.

Survey questions can also work together in a less obvious way. For example, one question can measure purpose of visit while another measures the variety of products offered. This allows you to determine how customers with different purchase intentions feel about the products available to them. (Think about a restaurant’s lunch crowd vs. dinner crowd.)

Before determining which questions to ask, it’s important to understand all of the different ways in which your customers experience your brand. What is the customer visit frequency? How is customer loyalty different at each touch point? What are the likely and possible purchase combinations? Is there a chronological sequence of events that takes place from the moment customers begin shopping?

Equally import to the survey questions you ask is which answer options you provide to respondents. It’s important to use a rating scale system that provides enough sensitivity for effective analysis. Keep in mind, your choice of survey methodology may impose limitations. For example, IVR phone surveys support 5- or 7-point scales, while web surveys can support 10- or 11-point scales. Using the incorrect scale, or using conflicting scales (where multiple methodologies are employed), could result in flawed and useless customer data.

After your survey has been designed, do not deploy until it has been pre-tested. This will ensure each question is correctly interpreted and is measuring what it’s supposed to measure.

Remember, this is only the beginning. For your program to be effective, your survey will need to evolve as various customer insights are identified.

Identifying Revenue Drivers

With a carefully designed survey, you can now determine which elements of your customer experience have the most correlation with satisfaction. As you perform this analysis, you should identify how the drivers of customer satisfaction are different across multiple breakouts:

•  By geographical region
•  At each location type (i.e. mall vs. stand alone)
•  Within urban, rural and suburban markets
•  At each location

Using quantitative statistical analysis, you can now determine the link between customer satisfaction and increases in revenue. To do this, you will require a specific amount of sales data (depending on each of the above breakouts being analyzed). You will also be able to determine how much revenue should be generated by a small increase in customer satisfaction. Just a 1% shift could represent between $5 and $50 million per year in new revenue.

Read "part three" of this tutorial...

Read part three of this tutorial, which covers: Actionable Reporting, Digging Deeper, Tactical Implementation and Measuring Success.

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