Customer Service - How to analyse satisfaction

Mis-management of customer service

By Nils Randrup


More than 80% of company sales typically come from existing customers, and a general rule of thumb is that it is 4-6 times cheaper for a company to grow sales with existing customers than to acquire new sales from new customers. Key to securing and growing sales to existing customers is not to annoy the customers so much thru the customer service, that they will choose to change supplier.

However, many customer service managers find themselves in a situation where customer satisfaction is not up to scratch, even though the performance measures seems fine.

When asking customers what really matters to them in terms of customer service, the two top factors is that the person answering the call is knowledgeable and can take care of business, and that the issue can be solved during the first call. However, these two criteria are seldom included in the performance management system of customer service departments. More than half of the customers in a recent customer survey across industries say they’ve had a bad service experience, and nearly the same fraction think many of the companies they interact with don’t understand or care about them. On average, 40% of customers who suffer through bad experiences stop doing business with the offending company.

The most important key performance measurements for customer service departments in most companies is still at many companies how long time a customer is on hold before the phone is answered, and the minutes used per call. Such KPIs drive a behavior with customer service personnel to hurry through calls, and to prioritize taking the phone over actually being able to handling the issue at hand. This is exactly the experience the customers don’t appreciate and get irritated by.

As companies emerge from the recession, customer service managers should understand that customers tolerate less in terms of bad experiences and have a tendency to shift suppliers more often now than ever before when they are irritated. New research underlines that must customers will no longer accept a rushed and inconvenient service experience, which becomes more at more common.

A recent study of customer satisfaction studies, published in Harvard Business Review, has yet another astonishing result. It studied the effect on sales of using customer satisfaction studies and customer satisfaction dimensions. Out of all the more than 50 types of customer satisfaction drivers, there were only 3 that had a direct correlation where increase in satisfaction scores meant increase in sales. The rest did not lead to increased sales. The only dimension found to correlate directly with sales across industries were the answers to the question:

·         “How likely is it that you would recommend <company/Product> to a friend or colleague?”

In a majority of industries two other dimensions also to some extent drove sales:

·         “To what extend do you consider your purchase a good buy?”

·         “To what extend do you have sympathy for the <brand/company>?”

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