Posted on August 14, 2009 - by Janet Smith

Measuring Customer Satisfaction, the Inverse View

Congratulations, regardless of what business you are in, you are in the service business.   Keep the concept of, “What does my customer value in my overall service?” in mind while building your marketing plan.  Delivering what your customer wants and needs generates referrals and customer loyalty, key contributors to your long term success.

The following is a simple analysis of customer satisfaction that can be employed by small or big businesses: happy customers recommend your business, find out how often and why by first understanding the impact.

Let’s look at some numbers that address the impact of customer service on willingness to recommend.  Studies are done in many established industries, in fact I saw the basis of this analysis at anevaluation of the auto industry 7 years ago (sorry don’t recall the presenter to give him credit!)  Regardless, you need to understand your business in your community, your service level with your customers.  These numbers should motivate you to take the time to understand your customers.  Recognize that this is an ongoing commitment not a one-time activity.

You may be thrilled with a 75% ‘Very Satisfied’ rating, and the fact that 90% of those customers are willing to recommend.  Evaluate the inverse.  25% of customers were NOT very satisfied.   Although 90% of very satisfied customers would definitely recommend services to others, the drop in commitment to recommend is something to explore.  Your business depends on referrals, so you can’t afford that drop.

Let’s apply the percentages above and apply this example to 40 customers.

In this example, 29 out of 40 customers are willing to recommend your service.  That means 11 out of 40 are not.   You can see how this example could come up with a completely different analysis if the numbers were not 75% very satisfied, but 50% very satisfied.

In this example, 22 out of 40 customers are willing to recommend your service.  That means 18 out of 40 are not.   A drop of 25% from Very satisfied to Somewhat Satisfied generated a completely different outcome.

If you have questions about changes you see in customer satisfaction or expectations missed, ask your customers and your employees.  Their insight is invaluable.  Customer satisfaction and high quality service is extremely important to the success of your business.

Ultimately your goal of customer loyalty and referrals is based on your ability to understand, adapt, improvise and overcome issues you have with customer service and quality.

Your profit depends on it.