How to Really Measure Your Customer's Satisfaction

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Most big businesses horribly overuse the concept "Customer Service" in their mantras:
  • Overused ^1: "We provide the best service in town."
  • Overused ^2: "Our competitive, lethal advantage: You will love our customer service."
  • Overused ^3: "We absolutely, totally love you. Come be a part of the our lovable experience. We love you."

Words != Execution

The problem with most customer satisfaction mantras -- it's just that: words. It's on paper. Great. That's just planning. Where's the execution? How are you enforcing customer service? More importantly, how are you measuring the improvement of your customer satisfaction?

Customer Surveys Suck

Surveys don't work because they rarely provide the real opinions of the customer. Instead of uncovering what customers think of your service, they usually tell you what you want to hear -- for fear of customer punishment (e.g. you spitting on their food the next time they visit you).

How to Really Measure Your Customer Service

Forget surveys. Focus instead on customer actions. Harvard's Das Narayandas says the following indicators show your customer's true feelings toward your business:
  • Grow the Relationship. The customer will want to buy more products or services at this stage and expand the scope of its relationship with the vendor. It costs very little to serve the customer, because the supplier has already incurred customer acquisition costs.
  • Provide word-of-mouth endorsement. The customer is likely to promote the company by talking about it positively. The vendor incurs lower costs for acquiring new customers.
  • Resist competitors' blandishments. By this time, the customer is less likely to switch to rivals, even if their products are superior, because it expects that the preferred vendor will develop similar products. It costs the vendor very little to retain the customer.
  • Pay premiums. A customer this loyal may be willing to pay higher prices for the vendor's products and services.
  • Collaborate. The customer believes that the feedback it provides will foster future improvements and wants to help the supplier develop new products and services.
  • Invest. Loyal customers often invest in their vendors. In addition to creating an exit barrier, such investments reduce vendors' risks.
If you're seeking to have the best customer service in town, the first step: Know what you're measuring.

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Posted on July 15

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