Customer satisfaction, a term frequently used in marketing, is a measure of how products and services supplied by a company meet or surpass

customer expectation. Customer satisfaction is defined as "the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds specified satisfaction goals."[1] In a survey of nearly 200 senior marketing managers, 71 percent responded that they found the "customer satisfaction" metric very useful.[1] It is seen as a key performance indicator within business and is often part of a Balanced Scorecard. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy.[2] Within organizations, customer satisfaction ratings can have powerful effects. They focus employees on the importance of fulfilling customers expectations. Furthermore, when these ratings dip, they warn of problems that can affect sales and profitability. These metrics quantify an important dynamic. When a brand has loyal customers, it gains positive word-of-mouth marketing, which is both free and highly effective.[1] Therefore, it is essential for businesses to effectively manage customer satisfaction. To be able do this, firms need reliable and representative measures of satisfaction. In researching satisfaction, firms generally ask customers whether their product or service has met or exceeded expectations. Thus, expectations are a key factor behind satisfaction. When customers have high expectations and the reality falls short, they will be disappointed and will likely rate their experience as less than satisfying. For this reason, a luxury resort, for example, might receive a lower satisfaction rating than a budget motel even though its facilities and service would be deemed superior in absolute terms.[1] The importance of customer satisfaction diminishes when a firm has increased bargaining power. For example, cell phone plan providers, such as AT&T and Verizon, participate in an industry that is an oligopoly, where only a few suppliers of a certain product or service exist. As such, many cell phone plan contracts have a lot of fine print with provisions that they would never get away if there were, say, a hundred cell phone plan providers, because customer satisfaction would be way too low, and customers would easily have the option of leaving for a better contract offer.

Purpose
A business ideally is continually seeking feedback to improve customer satisfaction. Customer satisfaction provides a leading indicator of consumer purchase intentions and loyalty. Customer satisfaction data are among the most frequently collected indicators of market perceptions. Their principal use is twofold[1]: 1. Within organizations, the collection, analysis and dissemination of these data send a message about the importance of tending to customers and ensuring that they

have a positive experience with the companys goods and services[1] 2. Although sales or market share can indicate how well a firm is performing currently, satisfaction is an indicator of how likely it is that the firms customers will make further purchases in the future. Much research has focused on the relationship between customer satisfaction and retention. Studies indicate that the ramifications of satisfaction are most strongly realized at the extremes. On a fivepoint scale, individuals who rate their satisfaction level as 5 are likely to become return customers and might even evangelize for the firm. (A second important metric related to satisfaction is willingness to recommend. This metric is defined as "The percentage of surveyed customers who indicate that they would recommend a brand to friends." When a customer is satisfied with a product, he or she might recommend it to friends, relatives and colleagues. This can be a powerful marketing advantage.) Individuals who rate their satisfaction level as 1, by contrast, are unlikely to return. Further, they can hurt the firm by making negative comments about it to prospective customers. Willingness to recommend is a key metric relating to customer satisfaction.[1]

Customer Satisfaction Survey Case Study

A leading hotel chain, which had engaged NBRI for customer surveys for over ten years, contacted NBRI shortly after the terrorist attacks of 9/11. They could see a disastrous short-term financial picture and knew they had to take action immediately. This meant investing a small amount of money to implement customer satisfaction surveys in order to gain millions of dollars of business in an economy that had suddenly become hostile to the travel industry. NBRI recommended its Standard Customer Satisfaction Survey, customized for the Client, but in its usual format, which has respondents rank items in order of importance before rating the Clients performance with regard to the same items. The customer survey was deployed to a small, stratified, random sample of customers no more and no less than was needed to obtain data that was truly representative of the thinking of the entire customer population at a 99% Confidence Level, and at a fraction of the cost of surveying everyone. The study revealed a very different root cause of customer satisfaction than had been the case just a few months earlier. Price was no longer a primary driver of this Clients customers perceptions. Security was not a root cause, either, as might have been assumed. Even the avoidance of air travel was not driving the factors that make up customer satisfaction for this Client. The NBRI Root Cause Analysis revealed that the driver of over 55% of the perceptions of this Clients customer population was the friendliness of the staff. Even the customers were unaware of what was causing them to rate a majority of survey questions higher than they would have, had the staff been less friendly, but with high-level statistical analyses, NBRI has the capability of analyzing the opinions, beliefs, and behaviors of human populations like none other.

Per NBRIs recommendations, the Client proactively leveraged this crucial information from the customer satisfaction survey and alleviated what could have been disastrous financial results. Indeed, the Revenue per Guest has shown significant increases with every intervention to their Root Cause, including those following the attacks of 9/11. NBRI customer satisfaction surveys provide the tools to improve organizational performance and profitability. Customer loyalty and satisfaction levels can be determined by analyzing the data gathered from our survey questions. Customer Satisfaction Surveys can help your organization with the following:

discover new product and service development ideas; determine what makes your customers loyal; understand customer issues and relationships to your employees; achieve a competitive edge with satisfied customers!

Our survey analyses provide your organization with the tools to meet customer expectations. Ensure customer loyalty and satisfaction with accurate information and interventions.

Customer Service Basics

Copyright Barb Lyon Servicing a customer is a part of every purchase and interaction with internal and external contacts. It can last a few seconds up to hours. So if we all do it and experience it everyday in almost everything we do, why isnt good customer service the norm? We all have stories about when we were treated exceptionally well or extremely poorly. We tend to share these extraordinary stories with others. We all know that word of mouth marketing can be the absolute best advantage, or the worst drawback for a company. Warren Buffett said it best: It takes 20 years to build a reputation and five minutes to

ruin it. If you think about that, youll do things differently.

A few basic rules about customer service:

Honesty is the Best Policy. Integrity Be honest and own up to your mistakes. Communicate what you plan to do to change or prevent the same mistake from happening again. Dont be fooled into believing that a regular mea culpa will get you off the hook. At some point the plan to fix the problem must take effect! Break Glass in Case of Fire. Response Time The best tact is to quickly get on the phone with the customer to explain your companys mistake. Dont rely on email for this communication if it can be done quickly one on one. If you are communicating to a large customer base then email is certainly the fastest and most effective way to quickly notify your customers that you are aware of the problem. Frequent updates is there is a protracted issue and a brief overview of how you will prevent it from happening in the future will give your customers confidence that you are aware of the customer impact. Keeping it Real. Set a Realistic Expectation Customers who have been promised something that isnt delivered as promised are far more frustrated and disappointed than if they are notified at the outset they wont have it sooner than later. In other words, under promise and over deliver is the best policy. This may take some arm wrestling with other departments who want to take a feature or product to market before it is ready. Set the expectations correctly internally as to what the fallout may be so everyone understands the impact to customer satisfaction and ultimately customer retention. R-E-S-P-E-C-T. Everyone in your company should love your customers. Without them, you have no company. This doesnt mean you wont have difficult customers who will push the limits and try everyones patience. But if you dont have a company philosophy to respect and appreciate your customers, the opposite tone will infect customer interactions from all departments. All departments, customer facing or not, should care about customer satisfaction. From Gandhi, We must become the change we want to see in the world.

Top Five Customer Service Metrics

Copyright Barb Lyon First question you should ask yourselfHow do you measure customer satisfaction? If you are measuring by the # of complaints you are or are not receiving, you are in trouble. Not everybody bothers to take the time to tell you about his/her horrible experience. If you are asking your customers if they are satisfied, you are telling them that their satisfaction matters. There are many different ways to ask: post-purchase and post-support surveys, enclosures in the monthly invoice, follow-up phone calls and quarterly or annual surveys. The right

method depends on your business and your customer base. Try different ways. Just do it. Lets be clear: if youre not measuring any part of your service delivery, you are missing a huge opportunity to improve, grow or even save your business during these scrutinizing, tight economic times. The challenge with specifying key indicators is that not all businesses will use the same metrics. For example, a retail or fulfillment organization will have decidedly different key performance indicators than a software-as-a-service company. For the purposes of this discussion, I have highlighted relatively general metrics and incorporated a few varying perspectives for different use cases. Service Level For call centers, support, and service desks, first call resolution is the Holy Grail. For a shipping operation, product delivery and project implementation, ontime performance is the measuring stick. In a high transaction business, the first interaction with a customer will be a key determinant of whether the customer will return. Dont underestimate the importance of timeliness and thoroughness. Customer Retention For SaaS businesses, Utilization is the best indicator of a customers dedication to your service. Use this metric to understand who is at risk at contract renewal time. Monitoring Repeat Business is going to help non-SaaS businesses understand how sticky their product or service is for their customer base. You should know which customers are using or buying different parts of your business. These customers who buy throughout your offerings are perhaps your most important customers to focus on for your retention strategies. Response time Youd be surprised how many customer surveys come back with comments such as your service is great, you got back to me right away. I was surprised with how quickly you responded to my inquiry and it made all the difference even if I didnt get the answer I was hoping for In todays world of electronic relationship management, response time is one of the only ways we can communicate our sense of urgency and concern for our customers and their experience with our product or service. What is your Response goal within X hours? Set one and achieve it. You should know what your competition is doing and beat their goal. Want to really blow away a customer and cement your relationship? Pick up the phone and give them a personal call. Time with the Customer Are your customer-facing employees incentivized to keep calls short or to move too quickly from customer to customer? If so, you are sending the wrong message and subsequently affecting the quality of the customer interaction. There is a definite happy medium between the overly chatty service provider and the thorough and efficient provider. Set your benchmarks for call duration and general time with the customer in relation to the ultimate goal of first call resolution, NOT the other way around. In other words, a completely satisfied customer not requiring a follow-up call or visit is much preferred over a quick, unresolved interaction.

Churn Cancellations and returns are the equivalent to churn. If you dont know how much business you are losing, you wont be able to understand how much new business you will require to stay out of the red. As important as knowing how much, is understanding WHY you are losing customers. Take it to the next level and use follow-up surveys, phone calls, personalized how can we get you back emails. This survey information is the real business insight for understanding your lost business. By all means this is not a comprehensive list of key performance indicators. To expand further we would need to focus on a particular business model to provide a more granular perspective. Start measuring and start making changes. Continue to evolve your key metrics as your business evolves. Keep this process circular for continuous improvement. Post these key performance indicators in your facility or on your intranet and regularly communicate them to your employee base to give everyone in your Company sensitivity to how you are performing for your most important asset: your Customers.