Paul Linnell

A popular topic for discussion in the real-world and on-line recently has focussed on - “What questions should I ask in a customer satisfaction survey?”

There are a great many reasons why organisations choose to survey their customers - so before spending a fortune on research it is important to first ask a question of yourself.  “What am I trying to achieve with my customer survey?”

Your answer to this question can have a huge impact on deciding what to ask your customers and how to analyse the results.

For example:

• If you are looking for an indication of customer advocacy, based on: their experience doing business with you, your position in the market, your products and service portfolio, and any number of other variables that may influence their answer - then you can possibly get-away with just them one question – “Would you recommend our company to others?”

• Or, if you are looking for an overall satisfaction score to use as a way to substantiate a marketing or branding message, then if you simply ask your customers “How satisfied are you with our products and services”, and then adopt a generous analytical approach to presenting the results you may get the result you are looking for.

• On the other hand, if you are seeking feedback from your customers to identify the problems they may have experienced with your products or services, and the actions you need to take to improve; and if you would like to quantify the impact of those issues on your organisation’s bottom line, and prioritise the actions you will take to address those issues – well, you are going to need to adopt a more robust and comprehensive survey methodology.

Done correctly, this doesn't necessarily mean that it's going to be more expensive.  In fact - far from it.  This approach will normally provide you with a positive ROI.

By identifying and addressing the problems your customer experience you can typically get multiple benefits.  You can:

• Reduce the number of customer complaints

• Make it easier for your customers and staff to do business

• Increase the likelihood that they'll keep on doing business with you

• Increase the good things they say about you to others

• Reduce the cost of doing business

Anyway, back to the question of questions.  The questions should be relevant to the customer’s experience, comprehensive in terms of their relationship with you or the interaction they have had with you, and yield results at the level at which you can take remedial actions.

The questions you ask should directly relate to key parameters of the service process that the customer experienced, and ones where you have influence to improve.

For example: "Did the service engineer arrive on-time?", "Was the problem resolved quickly?", "Did he/she provide advice on how the problem might be avoided in future?" etc.

To identify management actions and set priorities you’ll also need to measure the performance of each of these parameters and the impact that each has on overall advocacy and loyalty to your company.

Where we have worked with organisations to adopt these performance management methods there have been real and measurable improvements for their businesses and secondary benefits from the improved morale of managers and staff as their workload becomes less cluttered solving problems.

So, don't ask your customers questions to get the answers you want to hear - ask them the questions that will help your business succeed.

Measuring and managing success

Local government: Building consents - problems reduce and satisfaction improves

Paul Linnell

Although building consent and inspection services continue to place significant demands on local councils, we are seeing evidence that the investment made by some councils during the past few years to improve service has begun to pay-off.

Since 2007, our annual customer experience study of building consents and inspection services in New Zealand has been helping participating councils identify sources of customer dissatisfaction and set service improvement priorities.

The study has helped participating councils to almost halve the percentage of customers who experience problems with the building consent process and shows that customer satisfaction at participating councils has improved at more than twice the rate of other councils.

Customer Satisfaction

For participating councils, the average index of overall customer satisfaction shows an improvement of 23 index points since 2007.  Responses from customers of other councils, suggest that their service improvement initiatives may now be falling behind.

Problem Experience

Amongst councils that have participated in the annual study there has been an average reduction in problems of 33 percentage points since 2007.  However, responses from customers of other councils suggest that the steady reduction of problems seen between 2008 and 2009 might now be drifting upwards again.

Even though I would like to believe it was CTMA's study that has been making the difference, full credit should go to the councils involved.  It is their concern for their customers that has led to their participation and their efforts to improve service that has brought these positive results.

A paper is available summarising the finding of this annual study and has been updated with finding from 2010.

The study runs from September to December each year.

 
Responding to customers / Making it easy for customers

Hotel: Making it easy for customers to complain

Paul Linnell

If we don’t hear about the problems our customers experience, we don’t get the chance to put things right.

We all know from personal experience that it is not easy to make a complaint.

From our own research we have learned that some of the most common reasons customers give for not contacting a company about the problems they experience are:

• It was too much hassle

• I didn't believe anything would been done about it

• I didn't know how or where to complain

• I tried but I couldn't get through on the phone

Well, one hotel I stayed in recently came up with a brilliant idea.

They place a small pad of yellow sticky notes in each room.  The pad is pre-printed with a message encouraging customers to write down anything that needs to be put right and to stick the note on the TV when they leave the room.

This really simple and inexpensive device makes it easy for customers to report a problem and also easy for the hotel to take action.

It also gives a clear message that the hotel actually wants to hear from them and has a process for putting things right.

Wonderful!

 
The financial imperatives

Local government: Improve service and reduce costs

Paul Linnell

In the public sector it can sometimes be quite a challenge to be calculate cost-justification for service improvement.  But one of our local government clients has recently shown just one of the ways that customer satisfaction can be a financial benefit in the public sector - as well as making good sense for business.

Through their customer experience measurement programme they have been getting an ongoing measure of service performance that helps them identify service failures and monitor the performance of their internally and externally resourced service delivery processes.

The real win for this local council was that before they were routinely closing the loop with their customers, various process and system failures, and (dare I suggest) human factors, were contributing to delays and (in some cases) to the non-actioning of customer service requests.

Many of these response delays were leading to customers needing to call back and repeat or escalate their requests.

By identifying the specific request types, processes, systems, departments, service crews or contractors that were involved in each service failure, the programme has helped the council reduce their service request call-handling demand in their call centre by a full 13%.

In performance terms their work to improve their services has helped them reduce prematurely-closed service requests by 30% and increase their customer satisfaction by 10%.

Hats of to their team - great savings for the council and a fantastic example of turning customer experience measurement into management actions!

 
The financial imperatives

Retail banking: Customer retention at risk
as expectations rise

Paul Linnell

Back in 2005 when we conducted our first customer experience baseline study amongst customers of New Zealand retail banks, there was strong evidence that many banks operate with a significantly compromised customer retention strategy.

The study estimated that the problems customers experience when banking, and the way many banks handle customer complaints, could be placing between 8% and 12% of their annual profits at risk.

In subsequent annual updates, we have observed two disturbing paradoxes:

• Although customers of some banks now report fewer problems, overall satisfaction and advocacy appears to have dropped.

• When problems do occur, there appears to be an increase in the percentage of customers contacting their bank for help, but a drop in satisfaction with the action taken by banks in response.

 
It appears that although most banks are attending to service quality improvements, customer expectations are increasing.  And, when customers go to their banks for help, the problems are often not resolved to the customer's satisfaction.

Today, when customers experience problems with their bank, they find it easier to move their banking to a bank that can serve them better.  This presents banks with an interesting choice of strategies to maintain customer numbers:

• Should they make genuine efforts to gain insights from their customers' experiences, improve their service, retain loyal customers and grow through positive referrals

• Should they invest heavily on marketing and advertising to attract customers defecting from other banks hoping their service will be better

 
I guess the old adage is true - businesses often spend 50 times as much trying to get a new customer than they spend trying to keep an existing one.

Not a strategy we can all afford these days.