Are Your Customers Satisfied?

Kathryn Saducas Partner marketing manager Are your Customers Satisfied?

The importance of customer satisfaction to your business

Customer focused organisation

Goals of Customer Focus: End goal of customer focused strategies is the same: Boosting retention and repurchase = more sales!!! Creating Better Products or Services Offering compelling customer experience Building deeper customer relationships

Business Performance Factors Contribution to Shareholder Value Source: Price Waterhouse Coopers, 2002

Customer Satisfaction = Profits

Knowing what drives customer loyalty is important to your company’s financial health

Repeat customers and new customers from referrals  continuous revenue streams

Disloyal customers are expensive to replace

Attracting NEW customer is 4 x cost of retaining existing customer

5% increase in customer retention  75% in aggregate lifetime profits from that customer

What are your customers worth?

S = average revenue per customer sale

C = costs of servicing customer

V = expected # sales per year

Y = expected # years customer will use your services

A = cost of acquiring new customer

N = # of referrals from customer

F = correction factor

Lifetime Value of Customer (CLV)

=

[(S-C)*(V*Y)-A+(A*N)]*F

OR

Margin * # sales – cost of acquisition + savings from referrals * correction factor

Customer Lifetime Value = CLV

What are your customers worth?

S = average revenue per customer per sale

C = costs of servicing customer

V = expected # sales per year

Y = expected # years customer will use your services

A = cost of acquiring new customer

N = # of referrals from customer

F = correction factor

S = $20,000

C = $5,000

V = 2

Y = 5

A = $1500

N = 4

F = 1.2

CLV = [($20000-$5000)*(2*5)-$1500+(1500*4)]*1.2

CLV = $185,400

Customer Lifetime Value = CLV

Why Customer Sat. is important? Study by Le Beouf: “ the reasons why customers no longer dealt with a particular supplier”

A customer satisfaction program

Customer-Focused Initiatives Customer Value Attache Nokia product engineer goes on-site with customer for up to 1 month to learn about challenges and show how Nokia can add value Customer Champion Create a customer champion Director who is responsible for championing the voice of the customer through the organisation. Customer Success Engineer Team Centralised group that diagnoses root causes of complex customer problems and implements solutions across business Everyday Life Observation To gain deeper understanding of customer, send video crews & TV cameras into 80 households around world to capture customer daily routines Customer Charter & Advocate Independent customer advocate whose role is to resolve particularly difficult customer and business problems. Customer charter to improve customer experience with service. Customer Partner Experience Organisation-wide customer and partner satisfaction index to provide a holistic view of business health and trigger specific corrective actions where necessary.

The 6 Ps of Marketing

Customer Feedback Program

With a well constructed feedback program you can get key insights into customers to:

Identify key drivers of customer experience

Glean insights into health of your company

Detect early warnings of any erosion of your relationship or value proposition

Customer Program Activities

Assess internal root cause for customer perceptions – satisfaction drivers

Derive action plans to resolve most critical issues – set your objectives

Implement these actions

Track your progress with ongoing customer research

Link these customer metrics to your financial results & staff incentives

Tell your customers how you used their feedback

2 1 3 4 5 6

Case Studies

Rice University Case Study showed customer satisfaction improves customer retention and company profits

Methodology:

50% surveyed (group 1) and 50% not surveyed (group 2)

Group 1 were twice as loyal to company

Conclusion?

Customers want to be coddled

Surveys  increase in auxiliary product sales

Surveys create opinions

At Microsoft

Worldwide Survey Apr & Oct

Customer Escalation Tool

RMTP – Response Management Through Partner

Feedback forms at events (9 point scale)

Tactical Research – Qualitative & Quantitative

Anecdotal feedback

Roundtable sessions

Understand Satisfaction Drivers Customer Satisfaction Access to products & Services Emotional Factor Service Quality Price Product Quality

Value Mapping low high high satisfaction value support product reputation Sales staff Brand service Easy to do bus with Bus expertise

Example of Value Mapping Service Deployment Time [30%] Reputation and customer testimonials [25%] Account Managers/ Sales experience [15%] After Sales Support [10%] Business Process [10%] Market/Branding [5%] Innovation [3%] Strategic Direction [2%] low high high satisfaction 1 2 3 4 5 6 7 8 9

Avoiding the Pitfalls

Listening to the wrong customers

Incorrectly identifying customer priorities

Failing to consider strategic objectives

Failing to align organisation around execution

Failing to ‘get paid’ by customers for new value

Losing momentum – “campaign mentality”

Case Study – GAP Clothing

Ways to measure customer satisfaction

Different forms of measurement Annual Customer Satisfaction Surveys Focus Groups (Formal/ informal) Online Questionnaires Phone or Fax Surveys Feedback Forms Online Polls Customer Service Feedback CRM Software Other Surveys (Benchmarking, Employee, Org Alignment)

Partner Program - CSAT Tool http://www.microsoft.com/partner/media/ csat /

Microsoft CSAT – Points Awarded Partners may only survey the same individual once every six months. Only the first eight individual responses per customer organisation are eligible toward Partner Points calculations. 20 185-200 15 175-184 10 165-174 Points NSAT Score Net Satisfaction (20+ responses required) 20 100+ 15 50-99 10 25-49 5 10-24 Points Individual Customer Responses Participation

Measurement & Reporting

“ Satisfaction” can be measured on a scale

Align business functions around a single customer-focused metric

NSAT = (VSAT-DSAT) +100 VSAT = 8+9 DAST = 1 to 4

Food for Thought The name of the game should be about "giving customers a memory and experience so great that they'll want to repeat it." The game is not all about getting that score—that darned customer score—any way possible.

10 Golden Rules