Customer satisfaction… seems pretty obvious what it is and why it matters, right?
I don’t think so. When I hear people talk about customer satisfaction, they often talk about meaningless concepts such as “meeting customers’ expectations,” which is a pretty low bar, when you consider what your competitors might be doing for customers. Or, I hear people focus on “thumbs up, thumbs down” concepts like Net Promoter, which asks customers if they would recommend you, without understanding why they would or would not.
Customer satisfaction is a much richer concept than either of those, More importantly, it is directly tied to your success. Read on to sharpen your perspective about customer satisfaction and get ideas to improve it.
Let’s start with a key component of Yastrow and Company’s methodology for helping companies succeed: The connection between customer beliefs and results:
- All companies have significant untapped potential to improve their results, and reach their next level results
- The actions customers take are often the most important drivers of those results
- Customers’ actions are a direct result of what they believe about your company.
To assess and improve your customer satisfaction, let’s work through this model from top to bottom.
Results: where is the potential?
To identify the untapped potential in your current customer base, do this exercise first: Imagine that your current customers were significantly more loyal and were giving you significantly more business. What would be different about your results?
Here are a few possible example answers, to help start your thinking:
- The average revenue we receive during the year from each customer would be higher
- Sales of each of our different products and services would be higher
- Individual sales transactions would include a broader range of products and services, purchased together (better cross-selling)
- We’d be getting more business from unsolicited referrals
- Our average sale prices would increase, leading to higher gross margins.
Here’s what you’re looking for in this exercise: Where is the untapped latent profit in our business?
Ask yourself which of these areas of potential improvements are the most powerful and the most lucrative. Which excite you the most? These are the areas you should focus your customer satisfaction improvement efforts on.
Actions: what will customers do to drive these results?
Your next customer satisfaction-building exercise is to answer this question:
What do our customers need to do to help us create these results?
Here are some example answers, directly related to the examples above:
- Our customers will place larger and more frequent purchases
- Customers would purchase more of the products and services they already purchase, and would start purchasing new products and services they haven’t purchased before
- Individual customers would purchase a wider variety of products and services than they have before (more cross-buying)
- Customers would actively recommend us to friends and colleagues
- Customers would buy from us more frequently without soliciting bids from competitors, agreeing to pay the prices we offer them without “shopping around”
Beliefs: why would customers do these things?
Now we get to the crux of customer satisfaction: What do your customers need to believe that would encourage them to do these things?
- Why would customers buy more frequently and place larger orders?
- Why would customers buy more of each product or service?
- Why would customers buy a wider variety of products and services from you?
- Why would customers actively and enthusiastically recommend you?
- Why would customers pay more for your products and services and not even bother getting competitive quotes from your competitors?
The answer to all of these questions is the same: If your customers have clear, compelling, powerful, motivating, inspiring beliefs about your company, its products and its services, they will act in ways that improve your results.
A satisfied customer has these beliefs, and acts in ways that improve your results.
Here’s the next exercise I encourage you to do: Write out at least 30 beliefs you want customers to have that would influence them to act in ways that improve your results. Use your answers to the first two exercises to inspire you.
These 30 aspirational, desired beliefs represent your assessment of what ideal customer satisfaction looks like. Notice that this goes well beyond just a “thumbs up, thumbs down” description of whether customers “like” you or if you have “exceeded their expectations.” It’s so much richer than that.
Measuring current customer satisfaction
To take your customer satisfaction to the next level, engage a neutral third-party to interview your customers and learn how close their current beliefs are to these desired beliefs. How large a gap do you need to close to create truly satisfied customers, who act in ways that help your business achieve next level results?