Tuesday, June 16, 2009

Seven Crucial Elements of Customer Satisfaction

By Dr. Gary S. Goodman

I received a very polite inquiry from India this morning.

It read:

Can you please tell me exactly, "What is customer Satisfaction?"

My first impulse was to suggest reading my book. But after a few seconds, it occurred to me this is a genuine question that is foundational.

Let me make seven clear points about customer satisfaction that may help you:

(1) Most companies never stop to define it. If you ask them, "Is it important?" they'll shout, "Heck, yes!" but they would be hard put to explain what it is. This is a serious shortcoming, which prevents them from aiming at and systematically producing customer satisfaction.

We know what a "sale" is, don't we? It is an agreement, a deal, an exchange of money for performance, or a promise of money for a promise of performance.

(2) In many cases, satisfaction is thought to be an internal, psychological or emotional state, fostered by a customer. Specifically, it is the degree of one's "pleasure" arising from a "purchase." Yesterday, I bought a pound of ripe, organic cherries for five bucks. Fairly pricey, I thought, as I put the item into my shopping cart. But after biting into one or two, tasting the sweetness and texture, I concluded I made a wise investment. My pleasure equaled or surpassed the purchase price. I was and am satisfied with the purchase.

(3) Customer satisfaction is also measured by the likelihood that I'll purchase the same item, again; and that there will be a "halo effect" that will make me willing to purchase other fruits and vegetables from the retailer that sold me the cherries.

(4) Loyalty is also an aspect of customer satisfaction. I define it as a premium that customers are willing to pay because they have been satisfied in the past. Literally, this means they may be inclined to pay five dollars for your cherries, but only four dollars to your competitors.

(5) Good will is yet another aspect of customer satisfaction. This is an intangible asset, as any accountant can tell you, but it has value. It is the reasonable expectation that clients or customers will return to do business with you in the future. This can arise from habit, from developing a sense of community, kinship, or friendship with purchasers. Good will is, in part, a desire to do business with you, again.

(6) Satisfaction is not measured accurately by surveys and questionnaires. These are contrived, forced-choice expressions of attitudes and emotions that are abstractions to customers, that don't naturally arise from transactions. Using surveys and questionnaires, literally, we are "putting words into the mouths" of those that do business with us, substituting our constructs for theirs.

(7) The best predictors of loyalty, good will, and repeat business and the truest indicators of genuine customer satisfaction are directly observable during transactions and as transactions conclude. Customers "telegraph" their feelings, attitudes, and intentions through distinctive verbal and nonverbal clues that can be monitored, measured, and managed.

When pursuing customer satisfaction, most businesspeople act like the three blind men describing an elephant, touching it here and there, at random, making grossly inaccurate inferences about its characteristics.

But unlike the elephant examiners, most businesspeople voluntarily disable themselves, opting to pretend that surveys and such are satisfaction, when if they merely opened their eyes and looked at the right things, they could see, quite clearly what it is, and when and how it occurs.

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