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Design a better business strategy with customer satisfaction indicators

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Numerous articles on the Internet promote various sophisticated ways to measure customer satisfaction by providing the lists of the 5/10/15 best customer metrics. But it appears that there are two …

Numerous articles on the Internet promote various sophisticated ways to measure customer satisfaction by providing the lists of the 5/10/15 best customer metrics. But it appears that there are two problems with these metrics:

1. Most of them focus on effective customer support, rather than on the deeper reasons of customer satisfaction.
2. The ways to implement these metrics into company's strategy are not discussed at all.

A feedback from customer (or at least some of its parts) can be taken into account when company designs a business strategy. This feedback is not only about metrics (which for sure help), it is more about listening to clients. Experienced managers could transform very specific requests from customers to more abstract ideas that can be realized in the form of a business strategy.

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  • 1. DESIGN A BETTER BUSINESS STRATEGY WITH CUSTOMER SATISFACTION INDICATORS Based on www.bscdesigner.com/better-strategy-with-customer-satisfaction-indicators.htm By Aleksey Savkin, bscdesigner.com BSC DESIGNER
  • 2. CUSTOMER SATISFACTION METRCS • Happy clients lead to more sales and a bigger market share.
  • 3. CUSTOMER SATISFACTION METRCS • Happy clients lead to more sales and a bigger market share. • Unfortunately, measuring does not always mean managing.
  • 4. CUSTOMER SATISFACTION METRCS Let’s talk about:
  • 5. CUSTOMER SATISFACTION METRCS Let’s talk about: • Approaches that one can use to measure clients’ satisfaction;
  • 6. CUSTOMER SATISFACTION METRCS Let’s talk about: • Approaches that one can use to measure clients’ satisfaction; • And how exactly this measurement helps to design a better business strategy.
  • 7. LEARN WHAT CUSTOMERS THINK: PERCEIVED QUALITY • Customers’ satisfaction is not necessary about the quality of a service provided to them.
  • 8. LEARN WHAT CUSTOMERS THINK: PERCEIVED QUALITY • Customers’ satisfaction is not necessary about the quality of a service provided to them. • Example: customers rate those doctors who were more attentive and cared more about them better, rather than those who were able to provide a better solution to their medical problem.
  • 9. LEARN WHAT CUSTOMERS THINK: PERCEIVED QUALITY • Indicator: Perceived Quality.
  • 10. LEARN WHAT CUSTOMERS THINK: PERCEIVED QUALITY • Indicator: Perceived Quality. • A client’s rating of the product or service.
  • 11. LEARN WHAT CUSTOMERS THINK: PERCEIVED QUALITY • Indicator: Perceived Quality. • A client’s rating of the product or service. • This metric includes more subjective perception of the product or brand, rather than its actual quality.
  • 12. LEARN WHAT CUSTOMERS THINK: PERCEIVED QUALITY • Indicator: Perceived Quality. • A client’s rating of the product or service. • This metric includes more subjective perception of the product or brand, rather than its actual quality. • It reflexes an image of the product in the eyes of the clients.
  • 13. LEARN WHAT CUSTOMERS THINK: PERCEIVED QUALITY If you want to extend your market share, and if you want more word-of-mouth marketing you need to:
  • 14. LEARN WHAT CUSTOMERS THINK: PERCEIVED QUALITY If you want to extend your market share, and if you want more word-of-mouth marketing you need to: • Track perceived quality rate and
  • 15. LEARN WHAT CUSTOMERS THINK: PERCEIVED QUALITY If you want to extend your market share, and if you want more word-of-mouth marketing you need to: • Track perceived quality rate and • Develop a plan to address issues that you have found.
  • 16. MEASUREMENT AND MANAGEMENT PARTS • Measurement: Quantify and measure customer satisfaction. This measurement is supposed to give an idea about what needs more attention from managers.
  • 17. MEASUREMENT AND MANAGEMENT PARTS • Measurement: Quantify and measure customer satisfaction. This measurement is supposed to give an idea about what needs more attention from managers. • Actual management: once problem areas were identified one needs to develop a detailed action plan to address these problems.
  • 18. MEASUREMENT AND MANAGEMENT PARTS • Measurement: Quantify and measure customer satisfaction. This measurement is supposed to give an idea about what needs more attention from managers. • Actual management: once problem areas were identified one needs to develop a detailed action plan to address these problems. • It is important that these measurements and management’s parts fit together with each other and the whole strategy.
  • 19. Learn what customers think1 Surveys and feedback forms Customer satisfaction metrics
  • 20. Learn what customers think1 Surveys and feedback forms Customer satisfaction metrics Perceived quality
  • 21. HOW TO ASK YOUR CLIENTS FOR SOME FEEDBACK • “How am I supposed to find out the perceived quality score?”
  • 22. HOW TO ASK YOUR CLIENTS FOR SOME FEEDBACK • “How am I supposed to find out the perceived quality score?” • Ask your customers questions!
  • 23. HOW TO ASK YOUR CLIENTS FOR SOME FEEDBACK There are two types of questions:
  • 24. HOW TO ASK YOUR CLIENTS FOR SOME FEEDBACK There are two types of questions: • Closed questions (can be answered with “yes” or “no”) and
  • 25. HOW TO ASK YOUR CLIENTS FOR SOME FEEDBACK There are two types of questions: • Closed questions (can be answered with “yes” or “no”) and • Open questions (cannot be answered just “yes” or “now” and require the longer answer).
  • 26. HOW TO ASK YOUR CLIENTS FOR SOME FEEDBACK There are two types of questions: • An open question example: Would you recommend this company to your friend? The main question of a popular Net promoter score
  • 27. HOW TO ASK YOUR CLIENTS FOR SOME FEEDBACK There are two types of questions: • An open question example: Would you recommend this company to your friend? • An open question example: Were you treated like a special client?
  • 28. Learn what customers think1 Surveys and feedback forms Customer satisfaction metrics Perceived quality Would you recommend this company to your friend? Were you treated like a special client?
  • 29. HOW TO ASK YOUR CLIENTS FOR SOME FEEDBACK Choose a good time to ask your questions:
  • 30. HOW TO ASK YOUR CLIENTS FOR SOME FEEDBACK Choose a good time to ask your questions: • Hotel booking websites ask for your opinion in few days after your stay.
  • 31. HOW TO ASK YOUR CLIENTS FOR SOME FEEDBACK Choose a good time to ask your questions: • Hotel booking websites ask for your opinion in few days after your stay. • Experienced hoteliers ask for a feedback via the letter that you will find under your door in the last night of your stay (not when you do a check out and your taxi is waiting outside).
  • 32. HOW TO ASK YOUR CLIENTS FOR SOME FEEDBACK Choose a good time to ask your questions: • Hotel booking websites ask for your opinion in few days after your stay. • Experienced hoteliers ask for a feedback via the letter that you will find under your door in the last night of your stay (not when you do a check out and your taxi is waiting outside). • Software developers ask for feedback when a user tries their software for few days or when a user is going to uninstall it.
  • 33. HOW TO ASK YOUR CLIENTS FOR SOME FEEDBACK • In an example above the way to ask for some feedback (a form that supposed to be filled in while check-in) was not the best one as people simply don’t have enough time to fill in a form while checking- in or during their baggage drop-off.
  • 34. HOW TO ASK YOUR CLIENTS FOR SOME FEEDBACK • During the same flight an airport coffee house asked me to fill in a questionnaire with some open and closed questions. They gave their clients a pen and a small chocolate.
  • 35. METRICS THAT SHOW CUSTOMER SATISFACTION
  • 36. Repurchase rate – customer votes with money, but it might be too late Two problems with repurchase rate:
  • 37. Repurchase rate – customer votes with money, but it might be too late Two problems with repurchase rate: • First, there might be a long update cycle for your product.
  • 38. Repurchase rate – customer votes with money, but it might be too late Two problems with repurchase rate: • First, there might be a long update cycle for your product. • Second, some products and services are integrated into a customer’s business environment, they might not be really happy with your product, but will still buy a subscription for the next period just because it is more painful to switch to another service provider.
  • 39. Repurchase rate – customer votes with money, but it might be too late It is necessary to ask other questions before you face the situation that your repurchase rate is low.
  • 40. Repurchase rate – customer votes with money, but it might be too late It is necessary to ask other questions before you face the situation that your repurchase rate is low. • Repurchase rate mentioned above is a lagging indicator. It shows you what has happened.
  • 41. Repurchase rate – customer votes with money, but it might be too late It is necessary to ask other questions before you face the situation that your repurchase rate is low. • Repurchase rate mentioned above is a lagging indicator. It shows you what has happened. • You need some early warning signal, perfectly, something that we know affects the ultimate customer’s satisfaction.
  • 42. Learn what customers think1 Surveys and feedback forms Customer satisfaction metrics Perceived quality Repurchase rate Would you recommend this company to your friend? Were you treated like a special client?
  • 43. CUSTOMER SUPPORT METRICS: RESPONSE TIME • A customer expects that his question should be answered within 24 hours if it was asked by email,
  • 44. CUSTOMER SUPPORT METRICS: RESPONSE TIME • A customer expects that his question should be answered within 24 hours if it was asked by email, • A customer needs to be attended to within 3- 5 minutes if he called to your customer support.
  • 45. CUSTOMER SUPPORT METRICS: RESPONSE TIME • A customer expects that his question should be answered within 24 hours if it was asked by email, • A customer needs to be attended to within 3- 5 minutes if he called to your customer support. • And by a response I don’t mean just saying how important this customer is to you and forwarding him or her to another wait list.
  • 46. CUSTOMER SUPPORT METRICS: RESPONSE TIME • A customer expects that his question should be answered within 24 hours if it was asked by email, • A customer needs to be attended to within 3-5 minutes if he called to your customer support. • And by a response I don’t mean just saying how important this customer is to you and forwarding him or her to another wait list. • Customers hate support services outsourced to Asia that do everything, but not solve a problem.
  • 47. CUSTOMER SUPPORT METRICS: RESPONSE TIME • A customer expects that his question should be answered within 24 hours if it was asked by email, • A customer needs to be attended to within 3-5 minutes if he called to your customer support. • And by a response I don’t mean just saying how important this customer is to you and forwarding him or her to another wait list. • Customers hate support services outsourced to Asia that do everything, but not solve a problem. • Indicator: Response Time. The indicator’s benchmarks should be adjusted according to certain contact media.
  • 48. Learn what customers think1 Surveys and feedback forms Customer satisfaction metrics Perceived quality Repurchase rate Response time Abandonment rate Would you recommend this company to your friend? Were you treated like a special client?
  • 49. First contact resolution and abandonment rates • If customer has a problem he wants it to be solved quickly.
  • 50. First contact resolution and abandonment rates • If customer has a problem he wants it to be solved quickly. • A classical metric that will help to measure this is a “first contact resolution rate.”
  • 51. First contact resolution and abandonment rates • If customer has a problem he wants it to be solved quickly. • A classical metric that will help to measure this is a “first contact resolution rate.” • Accordingly, this metric needs to be accompanied with the abandonment rate to see if your customers are patient enough to wait for your answer.
  • 52. First contact resolution and abandonment rates • If customer has a problem he wants it to be solved quickly. • A classical metric that will help to measure this is a “first contact resolution rate.” • Accordingly, this metric needs to be accompanied with the abandonment rate to see if your customers are patient enough to wait for your answer. • Indicator: First contact resolution rate. The number of tickets solved during the first contact.
  • 53. First contact resolution and abandonment rates • If customer has a problem he wants it to be solved quickly. • A classical metric that will help to measure this is a “first contact resolution rate.” • Accordingly, this metric needs to be accompanied with the abandonment rate to see if your customers are patient enough to wait for your answer. • Indicator: First contact resolution rate. The number of tickets solved during the first contact. • Indicator: Abandonment rate. The number of clients who abandoned the waiting query without an answer from your side.
  • 54. Learn what customers think1 Surveys and feedback forms Customer satisfaction metrics Perceived quality Repurchase rate Response time First contact resolution Abandonment rate Would you recommend this company to your friend? Were you treated like a special client?
  • 55. METRICS ARE JUST THE BEGINNING OF THE GAME • Various metrics and KPIs related to customer satisfaction are a little bit overused. • Do you think that someone will buy from a company only because it answers queries rapidly and solves a problem on the first contact?
  • 56. METRICS ARE JUST THE BEGINNING OF THE GAME • Various metrics and KPIs related to customer satisfaction are a little bit overused.
  • 57. COULD APPLE DESIGN AN IPAD BY JUST FOLLOWING CUSTOMERS’ FEEDBACK? • A quote often credited to Ford: “If I had asked people what they wanted, they would have said faster horses.”
  • 58. COULD APPLE DESIGN AN IPAD BY JUST FOLLOWING CUSTOMERS’ FEEDBACK? • A quote often credited to Ford: “If I had asked people what they wanted, they would have said faster horses.” • You can ask your customers hundreds of well- formulated questions, but customers are not able to provide you with a detailed specification for an excellent product.
  • 59. WHAT THEN? • Should we stop listening to our customers?
  • 60. WHAT THEN? • Should we stop listening to our customers? • Not at all!
  • 61. CUSTOMER SATISFACTION AND THE STRATEGY
  • 62. CUSTOMER SATISFACTION AND THE STRATEGY • By measuring a customer’s satisfaction a company is supposed to come up with a better strategy by converting abstract metrics and feedbacks into actionable objectives.
  • 63. CUSTOMER SATISFACTION AND THE STRATEGY • A company listens to its customers; it uses such tools as surveys, feedback forms, customer satisfaction metrics, etc.
  • 64. CUSTOMER SATISFACTION AND THE STRATEGY • A company listens to its customers; it uses such tools as surveys, feedback forms, customer satisfaction metrics, etc. • A company analyzes its competitors to come up with more ideas for a product or a service.
  • 65. CUSTOMER SATISFACTION AND THE STRATEGY • A company listens to its customers; it uses such tools as surveys, feedback forms, customer satisfaction metrics, etc. • A company analyzes its competitors to come up with more ideas for a product or a service. • A company researches for new technologies and opportunities; sometimes business opportunity and business anomaly might come together.
  • 66. Learn what customers think1 Do an additional analysis2 Surveys and feedback forms Customer satisfaction metrics Perceived quality Repurchase rate Response time First contact resolution Abandonment rate Would you recommend this company to your friend? Were you treated like a special client? Competitor analysis CUSTOMER SATISFACTION AND THE STRATEGY
  • 67. Learn what customers think1 Do an additional analysis2 Surveys and feedback forms Customer satisfaction metrics Perceived quality Repurchase rate Response time First contact resolution Abandonment rate Would you recommend this company to your friend? Were you treated like a special client? Competitor analysis Researches for new technologies CUSTOMER SATISFACTION AND THE STRATEGY
  • 68. Learn what customers think1 Do an additional analysis2 Surveys and feedback forms Customer satisfaction metrics Perceived quality Repurchase rate Response time First contact resolution Abandonment rate Would you recommend this company to your friend? Were you treated like a special client? Competitor analysis Researches for new technologies Find business anomalies CUSTOMER SATISFACTION AND THE STRATEGY
  • 69. CUSTOMER SATISFACTION AND THE STRATEGY • Later the results are analyzed and according to what company has learned some assumptions are build.
  • 70. CUSTOMER SATISFACTION AND THE STRATEGY • Later the results are analyzed and according to what company has learned some assumptions are build. • The company’s leader needs to find a way to develop a product or service that will solve the found problems.
  • 71. Learn what customers think1 Do an additional analysis2 Define action plans3 Surveys and feedback forms Customer satisfaction metrics Perceived quality Repurchase rate Response time First contact resolution Abandonment rate Would you recommend this company to your friend? Were you treated like a special client? Competitor analysis Researches for new technologies Find business anomalies Develop a plan to address issues that you have found. Source: www.bscdesigner.com CUSTOMER SATISFACTION AND THE STRATEGY
  • 72. Learn what customers think1 Do an additional analysis2 Define action plans3 Surveys and feedback forms Customer satisfaction metrics Perceived quality Repurchase rate Response time First contact resolution Abandonment rate Would you recommend this company to your friend? Were you treated like a special client? Competitor analysis Researches for new technologies Find business anomalies Develop a plan to address issues that you have found. Develop a product or service that will solve the found problems. Source: www.bscdesigner.com CUSTOMER SATISFACTION AND THE STRATEGY
  • 73. CUSTOMER SATISFACTION IN THE BUSINESS SCORECARD • Have a look at this sample project created in BSC Designer: – http://www.webbsc.com/document/kpi/customer-satisfaction
  • 74. CUSTOMER SATISFACTION IN THE BUSINESS SCORECARD • On the KPIs tab you will find some indicators mentioned in this article.
  • 75. CUSTOMER SATISFACTION IN THE BUSINESS SCORECARD • On the KPIs tab you will find some indicators mentioned in this article. • They are important for the measurement of the client’s satisfaction, but they are not the only tools one can use to design a better strategy.
  • 76. CUSTOMER SATISFACTION IN THE BUSINESS SCORECARD • A company needs to do its own analysis of the current situation.
  • 77. CUSTOMER SATISFACTION IN THE BUSINESS SCORECARD • A company needs to do its own analysis of the current situation. • This analysis involves getting feedback from clients, as well as an analysis of other business factors.
  • 78. CUSTOMER SATISFACTION IN THE BUSINESS SCORECARD • A company needs to do its own analysis of the current situation. • This analysis involves getting feedback from clients, as well as an analysis of other business factors. • The result can be formulated in the form of business objectives linked to each other with cause-and-effect connections.
  • 79. CUSTOMER SATISFACTION IN THE BUSINESS SCORECARD • A company needs to do its own analysis of the current situation. • This analysis involves getting feedback from clients, as well as an analysis of other business factors. • The result can be formulated in the form of business objectives linked to each other with cause-and-effect connections. • In BSC Designer, you can see the representation of these objectives on “Business goals” tab and “Strategy map.”
  • 80. CUSTOMER SATISFACTION IN THE BUSINESS SCORECARD • In this way you don’t just look at customer satisfaction metrics, but have a complex picture of the business strategy.
  • 81. MORE ABOUT THE BALANCED SCORECARD Find more insightful articles about the Balanced Scorecard in ”Articles” section at www.bscdesigner.com BSC DESIGNER
  • 82. THANK YOU! Feel free to send us your questions using the contact form at www.bscdesigner.com