As you well know, marketing your product or service to existing and potential customers is the lifeblood of your success as a business. In the past, before technology took over, businesses had a telephone and personal home address with which to contact their customers. Now, there is email, messaging, Skype, websites, and social media. However, some companies prefer to have one-on-one contact with their customers. Continue reading
Possessing a high quality customer database is essential to your business; it ensures you stay in contact with your customers, having up-to-date information at hand so your customer always stays your first priority. Whether it’s through email, point-of-sales, direct or indirect marketing, information kiosks, online shopping venues, or the like, crafting the architecture of a high quality customer database is the key to procuring long-lasting customer relations. Here are some takeaway points to consider. Continue reading
As you know, social media has exploded over the last decade and many companies have learned the trick to getting customer data through the social networks. If your company is one who hasn’t quite caught up to speed on social networking, then here are some helpful tips. Continue reading
In business, you know the customer is always right – even if they’re wrong – and should be your top priority. Running a company that keeps customers coming back time and time again is the ultimate goal; with these tips for keeping customers satisfied, you can accomplish that goal on a daily basis. Continue reading
Sports teams and musicians have raving fans and you can too! Raving fans for businesses are the business’ advocates and would never consider taking their business elsewhere. That’s a tall order in this highly competitive market place, but it is possible. Businesses with raving fans not only provide an exceptional product or service, they also provide an exceptional customer service experience. Follow these customer service tips for ensuring you have raving fan customers: Continue reading
Survey data is one of the easiest forms of data to obtain to rate overall customer experience and satisfaction so you can make beneficial changes to your business. Whether your business is brick and mortar, online, or both, you can gear your customer surveys to ensure that you gain the data you need to improve product or service quality, improve customer service, maintain market share through competitive offerings, and improve the overall level of the customer experience. Continue reading
What do airlines, large banks and telecom corporations have in common? They are among the least-liked companies in America. How do we know? The American Customer Satisfaction Index (ACSI) tells us so. It’s the only uniform national measure of satisfaction with goods and services across a representative spectrum of industries and the public sector. The ACSI utilizes patented methodology to identify factors driving customer response and applies a formula to determine the cause-and-effect relationship between those factors and satisfaction, brand loyalty and overall financial health of a company.
ACSI data allows companies to reach informed decisions about current products and services and also make projections about changes under consideration. It’s a tool for managers to improve satisfaction and build customer loyalty and a means to evaluate competitors. ACSI scores also help investors evaluate the present and future potential of a company. Historically, stocks of companies with high ACSI scores outperform lower-scoring firms.
Developed by researchers at the University of Michigan and first published in 1994, the ACSI releases full results on a quarterly basis with monthly updates. The survey rates satisfaction with 225 companies in 47 consumer industries and more than 200 programs and services provided by federal agencies. Data about customer satisfaction is gathered from random telephone and email interviews with 250 customers. To generate ACSI results, over 70,000 interviews are conducted each year. Consumers respond to questions about a company by rating three factors on a 1 to 10 scale: Overall satisfaction, fulfillment of expectation and relative comparison to an ideal product or service. Companies are chosen for scoring based on total sales and position within their industry. As company fortunes wax and wane, some are deleted from the survey and others added.
In addition to rating individual companies, the Index generates overall scores for 43 industries, 10 economic sectors plus a comprehensive national customer satisfaction score—now considered a significant metric for the health of the economy at large.
The scores from the American Customer Satisfaction Index are awaited by companies, economists, investors and government agencies alike. Some of the general conclusions gleaned from the results include:
- Variations in customer satisfaction indicate the mood of consumers and accurately predict their readiness to buy products or services.
- Since consumer spending makes up the majority of the national gross domestic product (GDP), spikes or dips in ACSI scores serve as an early warning to fluctuations in GDP.
- Quality, not price, is the primary factor generating customer satisfaction in most industries scored by the ACSI.
- High-profile mergers, acquisitions, large layoffs and other internal uncertainties degrade a company’s customer satisfaction score.
- Service industries are generally positioned for lower ACSI scores than the manufacturing sector.
Around the world, many countries are implementing surveys based on the ACSI model. In the future, ACSI methodology may evolve from a one-nation metric to a global quantification. As national economies expand into worldwide markets, international data on consumer satisfaction and a company’s—or a country’s— relative success in fulfilling it will prove vital.
Customer loyalty is a tricky sentiment to track. It is difficult to measure customer loyalty because proof of loyalty, the state of being loyal, is most often shown after an action occurred that indicates a person’s loyalty. However, past action often indicates but doesn’t guarantee future loyalty.
So how do you measure something that hasn’t happened yet? You can look for patterns when analyzing responses to survey questions designed to measure specific indicators that, when taken in context by the analyst, have varying degrees of certainty as to future action. Bob Hayes, author of Measuring Customer Satisfaction and Loyalty, breaks it down into 3 measurements: Retention, Advocacy and Purchasing.
Retention as an Indication of Loyalty
Retention is a reflection of a customer’s willingness to remain with a particular company’s service or products and is useful to measure customer loyalty. Questions designed to determine loyalty are often based on the “How likely are you…” model to predicate future behavior. Among wireless or other service provider companies, Retention is most often asked by the question, “How likely are you to switch?” This question is an indication of the relationship the customer has with the company and may be an indicator of overall satisfaction. Although, the smart analyst should be aware that the question alone, without corroborating evidence, may be an indication of a deeper dissatisfaction with the competition rather than satisfaction with their current company.
This least of all evils attitude is often found in service industries such as cable/internet providers, wireless companies and banking. To be helpful, retention questions should be supported by an investigation of the second measure, Advocacy.
Measure Customer Loyalty by Measuring Advocacy
“How likely are you to recommend…?” or How likely are you to purchase other products from us?” and ” How satisfied are you with…?” are typical advocacy questions. They are related to retention because the assumption is that a customer that is a cheerleader for or satisfied with your organization is likely to remain with you. They relate to the customer’s perception of the company’s image that they are doing something right. Determining what that “right” something is requires additional investigation. It may be related to a single experience or simply to an overall – but general – impression.
There is overlap between Advocacy and Retention but they are distinctly different. Advocacy requires less action on the part of the customer, because to advocate does not mean purchasing. Whereas Retention requires the costumer to engage with your company through the basic transaction of making an additional purchase (or renewing a service) which in itself is a strong indication of customer satisfaction.
However, the strongest indication of customer satisfaction is related to Purchasing.
(RE)Purchasing is a strong Customer Satisfaction Indicator
Purchasing questions like, “How likely are you to (continue)(increase)(purchase different) products from X Company?” are the best indicators of growth through customer loyalty. They seek to determine if the amount spent per existing customer will increase or decrease based on additional purchases within or across product lines. It is distinguished from the retention question of how likely are you to switch because a switching question may me a repeat of the same revenue (0 growth) rather than an increase in spending (positive growth)
Use All 3 To Measure Customer Loyalty
All three customer satisfaction indicators are closely related in that they measure costumer intent. negative responses to these types of questions usually indicate a loss of that customer. Either they will re-up, purchase additional products or feel good about your company/product/services — or they won’t or don’t. It is fairly straight forward to develop relevant survey questions to receive the data.
What becomes difficult is providing the context for analyzing the survey data into a meaningful construct that can be used by decision makers. That is the job of the analyst to rely on his or her experience, knowledge and expertise to put the data into perspective.