If we agree that a key organisational driver is to deliver customer service in a manner that satisfies our customers, it is important to know how satisfied our customers are.
ICS Customer Priorities Research “What customers really want” identified the top 20 aspects that customers require in their experiences with organisations. 10 different sectors were included with the priorities identified for each sector against ‘Doing best what matters most’ to customers.
The 20 priorities can be aligned to 5 key generic elements that are vital to create high levels of satisfaction and subsequent loyalty. These are:
- Problem Solving
- Quality and Efficiency
- Ease of doing business
But is satisfaction enough? Simply delivering to levels where the customer receives the service they expect will deliver satisfaction but will not necessarily deliver loyalty, recommendation and repurchase. Organisations should be focusing their efforts on achieving the zone of affection as shown in the graph below. Past research has shown that where these levels of satisfaction exist the likelihood to re-purchase and recommend grows by over 4 times the level of merely satisfied.
Conversely where low levels of satisfaction exist i.e the zone of defection consumers become active in undermining the organisational reputation and involving their many contacts friends, family, and associates.
Tactical activity for organisations may well be influenced by their position on the satisfaction curve e.g. the focus may be to eliminate high levels of dissatisfaction and defection with a short-term goal of moving into the indifferent category. Reaching consistent levels of very satisfied zone of affection will require focus on all the elements described above and is longer term in nature.
There is also growing evidence that today’s customer has become more interested in quality of life (doing things) than material wealth (owning things). This further reinforces the importance of the entire customer experience not just the core product or service.
A 2003 study by “Van Boven and Gilovich” proved the long held maxim that experiences contribute more to long-term life satisfaction than do material possessions. The authors put forward 3 potential explanations for this finding:
- Experiences may be more favourable viewed as time passes
- Experiences are more central to one’s identity
- Experiences have greater social value (in other words they are more interesting to talk about)
The implications of this study are that, as customers, we should look to use our discretionary spend on experiential purchases where possible and that, as suppliers, we should try to sell experiences not products.
But profitability per se is not a prime consideration in the public or not for profit sectors. What then is the argument for satisfying customers in these sectors?
Although not motivated by profit, organisations in these sectors must be very aware of the cost implications of dissatisfied customers. Dissatisfied customers complain more, soaking up valuable resources in dealing with their complaints and which can result in costly re-work. It has also been shown that customer satisfaction and employee satisfaction are related (the ‘mirror effect’). Organisations with satisfied customers are more likely to have satisfied and engaged employees which, in turn, leads to lower turnover and absenteeism, therefore lowering the cost of employment.
Organisations with more satisfied customers tend to have a better public image and reputation. Such reputation benefits often lag behind actual performance, and can therefore be felt to be unfair, but in time they tend to gravitate towards an accurate depiction of an organisation’s ability to satisfy customers. Ultimately the aim for many organisations in these sectors is to establish trust with the public in general. A good reputation built on a solid basis of high levels of customer satisfaction is key to establishing that trust.
Similar benefits accrue internally for organisations that are good at satisfying their customers. As well as having more satisfied employees, organisations with satisfied customers tend to have better morale and employees are more likely to feel pride in where they work. It becomes easier both to recruit and retain good staff under these circumstances.
For the public benefit
Finally, and perhaps most compellingly for the public sector, customer satisfaction is the ultimate arbiter of the success of public organisations. Such organisations exist to serve the public, rather than shareholders or owners, and as such their success should be judged by their ability to deliver what the public wants. This has been the policy of successive Governments in the UK.
Customer satisfaction is at the heart of organisational success and should be a Key Performance Indicator in any Board Room. The links between satisfied customers and improved, purchase, reputation, efficiency and culture are proven by many years of research. Tracking and improving the elements that contribute to overall satisfaction is a critical success factor.