Customer satisfaction measurement


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Customer satisfaction measurement

  1. 1. CECustomer satisfaction measurement
  2. 2. CE“The customer you loose holds informationyou need to succeed.” Frederick F.Reichheld
  3. 3. CEComponents of customer satisfaction. • Accuracy • Adequacy • Aesthetics • Availability • Cost dimension • Functionality • Reliability • Quality & quantity • Follow through • Responsiveness • Timeliness
  4. 4. CE Measures of customer satisfaction• Overall customer satisfaction with the organization and its products / services• Rating in the industry on the basis of overall customer satisfaction• Satisfaction with value for money• Desire to recommend the product or service to others.• Loyalty in terms of repeat purchases
  5. 5. CEMeans of measuringcustomer satisfaction I.Customer feedback after delivery of product or service II.Customer complaints and suggestions III. Customer Surveys
  6. 6. CEI. Customer feedback after delivery of product or service This is one of the simplest, fastest and the most effective method of measuring customer satisfaction. The customers should be immediately asked to evaluate the product or service and comment upon areas of satisfaction and dissatisfaction.
  7. 7. CE II. Customer complaints and suggestionsThe organization must have a formalized system of recording allcustomer complaints and as well as the methods of their disposal.Customer complaints must be taken very positively as valuable inputsby the organization and should immediately trigger the improvementactivities.
  8. 8. CEIV. CustomersurveysSteps in conducting customer surveys : -A. Identify your customers requirements under various segments.B. Determine your survey methodologyC. Develop survey / interview questionsD. Conduct survey / Interview your customers
  9. 9. CE A. Identify yourcustomers requirement areas.It is extremely important to know the requirement of yourcustomers before designing a questionnaire or survey. This isbecause if we do not ask the right questions, the answers we getwill be irrelevant and it will be difficult to find out if the customersare really satisfied with the issues that are important to them.
  10. 10. CEWays to identify customer requirements• Discuss the issue with sample group of customers• Ask your existing customers “If we have to develop a questionnaire to measure our customers’ satisfaction, what questions should we ask.• Brainstorming with employees from various functions within the organization. A cross section of ideas from various people will give us the complete picture about the requirement of the customers
  11. 11. CE Product requirements For identifying the customer requirements for a PRODUCT, the survey must cover the following areas:• Performance• Timeliness• Reliability• Durability• Serviceability• Aesthetics
  12. 12. CE Service requirements For identifying the customer requirements for a SERVICE, the survey must cover the following areas:• Security• Reliability• Accessibility• Timeliness• Responsiveness• Empathy• Assurance
  13. 13. CE B. Determine your survey methodology This requires the organization to answer the following questions :• How many customers to survey?• Whom to survey?• How to survey?• When to survey?• Who should conduct the survey?
  14. 14. CE How many customers to surveyThe basic rule behind sample selection is to choose a cross sectionof customers which represents your overall customer base. Forexample if your customer database consists of large, medium &small organizations, your sample must represent the same.Other criteria for selecting may include percentage of frequentversus infrequent customers, industry sector & geographic area.
  15. 15. CE Whom to survey? While conducting the survey, the organizations must include the following customers:• Present customers• Potential customers• Past customers• Competitor’s customers
  16. 16. CEWhom to survey?The customer sample must never be biased. Everyone wants tohear good things from the customers and nobody wants to hear anegative feedback. There is a natural tendency to include apositive feedback and to exclude the negative feedback. This willnever reflect the true measure of customer satisfaction. Theorganization must be willing to hear both positive & the negativefrom the customers if they are truly willing to improve theircustomer satisfaction.
  17. 17. CEHow to survey? The following methods can be used for conducting the survey:• Mail survey• Telephonic surveys• Face to face interviews• Comment cards The best method will depend on your situation, number of customers in the sample group and what works best for your customers.
  18. 18. CEWhen to survey?Survey at periodic intervals:Many organizations prefer to conduct customer satisfactionmeasurement survey at certain time of the year. This howeverhas certain disadvantages. If the period of survey is widelyknown it can signal the time for enhanced services to thecustomers during that period. The marketing personnel maydistribute questionnaires to customers during these periods.Such conduct is open to all sorts of bias & this practice shouldbe discouraged and avoided.
  19. 19. CEWhen to survey? Surveying continuously: More & more organizations are moving towards continuous measurement of customer satisfaction due to turbulent & dynamic marketing environment. Continuous measurement recognizes the on-going importance of customer satisfaction and is not influenced by momentary events (good or bad). This method keeps the organization completely focused on customer satisfaction & does not allow it to be forgotten between survey waves.
  20. 20. CE When to survey? Surveying after “moments of truth” : Moments of truth are any interactions with customers in which an organizations effectiveness is tested. For example• Getting the car loan from the bank• Settlement of insurance claims• Similarly, receiving money from the cash counter of a bank
  21. 21. CE When to survey?Every moment of truth can be followed up with a satisfactionsurvey to determine as to how well the organization hasperformed in this important interaction.
  22. 22. CE Who should conduct the survey?The survey can be undertaken by the organizationsthemselves or it can also be given to outside agencies.There are following advantages of getting the survey byoutside professional agencies.
  23. 23. CE Who should conduct the survey?• They are more objective in formulating questions & analyzing responses.• Customers are more open when providing information to third parties.• Professional agencies have the expertise to ensure that the process is productive & effective.
  24. 24. CE C. Develop survey questionsThe organization must develop a pre-determined setof questions which must take into account all therequirements of the customers.
  25. 25. CE Develop survey questionsThe questionnaire must give an impression to the customersthat you are thorough & organized when gathering customersatisfaction information. The presentation & packaging of thequestionnaire should not be shoddy. A good appearance cansuggest evidence of organization’s high commitment tocustomer satisfaction management process and vice versa.
  26. 26. CE Sample questionnaire - AirlinesA. At the airport Excellent Good AverageWaiting time for getting the boarding passBehavior of the front desk executiveReady availability of informationTime taken in identification of luggage
  27. 27. CE Sample questionnaire - AirlinesB. In-flight service Excellent Good Average Cabin crew’s welcome at the time of boarding the flight Availability of reading material Quality and quantity of food & beverages Quality of service Space in the aircraft to keep your hand baggage Responsiveness for special service asked for Cleanliness in the toilets
  28. 28. CE Sample questionnaire - AirlinesC. In-flight experience Excellent Good Average Timeliness of the flight In flight experience with regard to:- Noise level Temperature Ride and landing Flight ambience Overall ratingsYour suggestions for improvement
  29. 29. CECustomer feedbackSample survey / feedback forms for consumer durables, consumernon-durables and service industry are given in MS Excel file“Feedback forms” given along with this package.
  30. 30. CE Advantages of a good survey A well designed and executed customer satisfaction survey can be a great asset to any organization due to the following reasons:• It can pinpoint expenditure & resources which is being spent but do not help to satisfy the customers.
  31. 31. CE Advantages of a good survey• It can identify opportunities for product & service innovation.• It can ensure that the quality improvement efforts are correctly focused on issues that are most important to a customer.
  32. 32. CE Why customer survey’s fail?Unfortunately, a well designed & executed survey tends to be anexception rather than the rule. The challenge of conducting acustomer survey is to minimize the total amount of error. This errorcomes from two different sources.A. Sampling errorsB. Measurement errors
  33. 33. CETypes of sampling errors These errors deal with the manner in which people are selected in a survey. They are of following types• Failing to use statistical sampling methods• Incorrect selection of profile• Incorrect selection of number of people• Ignoring non-responses.
  34. 34. CE Types of measurementerrors These errors are related to the content of the survey and the way in which the results are used. These mistakes deal with : • Drawing incorrect inferences from the responses • Asking non-specific questions. • Failing to ask all the questions. • Using incorrect or incomplete data analysis methods. • Error in feeding the results
  35. 35. CEConducting surveys in consumer & business marketsWhile many professionals and corporate managers seem tounderstand the nature of consumer markets & surveys, many arequite unaware of how they differ from the business markets. It isextremely important for organizations to understand the differencebetween consumer & business markets before the survey isconducted. The differences are explained in the following slides.
  36. 36. CE I. Size of customer population Consumer market Business marketMost consumer markets are Many business markets arecomposed of large number of composed of relatively smallcustomers in which no single number of customers of which fewcustomer has a significant share. buyers may have a substantial share or dominant position.
  37. 37. CE II. Magnitude of purchase volumes Consumer market Business marketMajority of consumer A large number of businesspurchases are for products and purchases are for products andservices which is relatively services that are relatively largesmall in actual rupee amounts. in rupee amounts.
  38. 38. CE III. Purchase transactions complexities Consumer market Business marketThe purchase of most The decision to purchase majorconsumer items is a simple business products and servicesprocess involving an is usually a complex process inindividual’s decision to buy or which numerous decisionnot to buy. makers and influencers negotiate terms & specifications with suppliers.
  39. 39. CE IV. Difference in purchase process Consumer market Business marketConsumer products are sold In the business market, usuallythrough retailers, where the the products are either soldattitude of sales staff / dealers directly or through Co’s regionalhas a direct bearing on the sales offices and as such aresales. within direct control of the organization.
  40. 40. CE V. Customer knowledge of supplier offerings Consumer market Business marketAs a general rule consumers Customers have considerableare not very knowledgeable knowledge of products andabout the products & services often have means to assess thethey purchase or the suppliers quality of the products throughoperational processes to pre-shipment inspection /produce and deliver those incoming inspection.items.
  41. 41. CE VI. Nature of customer supplier relations Consumer market Business marketIn majority of consumer markets, The customers tend to activelysuppliers and consumers are at an develop close working relationshipsarm’s length relationship in which with their key suppliers. Thisthe suppliers do not share relationship may involve sharingproprietary information or seek proprietary information and jointtheir collaboration in any significant efforts towards product developmentway and improvement
  42. 42. CE Assessing many Vs few customersBy comparing the structural characteristics of consumer andbusiness markets, it becomes clear that the bargaining balancebetween suppliers and customers significantly differs. As opposedto consumer markets, in which the suppliers sell to manycustomers, business markets suppliers routinely sell on anegotiated basis to fewer, more knowledgeable and more powerfulcustomers.
  43. 43. CEConsumer market : Assessing the needs of too manyIn a consumer market, we have to assess the needs of manycustomers as opposed to business markets where we have toassess the needs of few customers. In a customer market sinceevery one can not be surveyed, representative samples ( say 10to 20 % ) are drawn and quantitative techniques are used topredict the composite perceptions of a large population.
  44. 44. CEBusiness market - Assessing the needs of fewIn a business market, since a handful of customers candominate the supplier’s sales environment, the survey has to beconducted for a very high percentage of the total customers( say 70 to 80 % ) and may be on a one to one basis in a fewcases.
  45. 45. CE D. Interview your customersCustomers appreciate if asked for a feedback and have come toexpect in many industries. Whichever method is chosen to gatherthe information, it must be done in a way which shows thecustomers that you sincerely desire the feedback & are serious inusing their input for improving the product / service.
  46. 46. CE Interview your customersIt is equally important to acknowledge the participation of thecustomers in the survey. Once the survey is over and their valuableinputs have been considered, they must be informed about it as well.This has a great impact on customer loyalty and retention.
  47. 47. Disseminating the findings of your CSM CE The report on your customer satisfaction management must include the following:• Summary of findings• Key trends• Planned follow up measures• Methodology of improvement plan
  48. 48. Disseminating the findings of your CSM CEIt is also important to schedule a presentation to the topmanagement & top executives. In a face to face discussion, it isfar easier for the executives to ask questions & form consensusof agreement with the results. The presentation must include anaction plan & reference tools for quality improvement as well.
  49. 49. CE