Companies invest a lot of time and money measuring customer satisfaction. These measures usually assume the form of a survey that is supposed to take the customer’s current temperature following a conversation or transaction with the company. For a number of reasons, I think these measures are a waste of time.
We’ve all participated in these surveys. Maybe it’s just one question that amounts to, “Would you hire the person you just spoke to?” Or, maybe it’s, “Rank your satisfaction with (product or service): a) Beyond My Expectations; b) Met My Expectations; c) Below My Expectations; d) I HATE Your Company.”
These surveys basically just tell us whether the customer has a current complaint. Either the person is upset about something or they point a finger at a rep who had to give them some bad news (i.e., “I’m sorry, but it will cost $3,500 to repair your equipment”). It’s not surprising that many customers want to “shoot the messenger,” even though the messenger may have delivered the news properly.
Customer satisfaction measurements show us a moment in time. They do not tell us if we have a committed customer who will resist the lure of a competitor’s promise of a better deal.
Another reason why I think customer satisfaction isn’t enough is because satisfied customers defect at an alarming rate. And, companies that rely on satisfaction measures seem deeply confused about why they leave. Here’s some of the research we’ve compiled:
- 75 percent of customers who leave a company were satisfied or even “very satisfied” when they left.
- Only 25 percent of customers leave due to price – but most company executives think price is the most common reason why they defect.
- In truth, 80 percent of customers leave a supplier due to the lack of a solid business relationship – but only 20 percent tell you that’s why they left.
Customer Satisfaction (CSAT) surveys, no matter how well-designed, measure a short-term condition that doesn’t appear to have much to do with customer retention. Yet, companies see CSAT as a key performance indicator and continue to measure the heck out of it. Why is that? Well…
- Statistics tell us that it costs five to seven times more to generate business from new customers than business from current customers.
- There is a five-fold payback for retention (a 1 percent improvement in retention equals a 5 percent increase in profit).
So, we know the enormous value of customer retention. But, here’s the blunder I think we are making: We mistakenly think that if we monitor CSAT and respond to issues that crop up, somehow it will translate to our bottom line. The research doesn’t correlate with this assumption.
I think that what every company really wants from customers is loyalty. In my view, loyalty and customer satisfaction aren’t the same. CSAT measures a moment in time and doesn’t prevent defections. What we want are customers who will resist the onslaught of our competitors’ offers.
What is loyalty anyhow? I’m told there are few words harder to explain. But, when it comes to loyal customers, my definition is simple: Loyal customers are ones who have stopped shopping. They are deaf to your competitors’ appeals. Their business relationship with you is so valuable to them that it would be extremely difficult for some other supplier to lure them away.
Have you ever felt so loyal to a supplier that you stopped shopping? What made you feel that way? My B2B experience tells me that it was because of a person associated with your favored supplier, not because of a program or a policy. But, here we go again: Many companies invest tons of money in fancy loyalty programs. I don’t believe that true loyalty attaches to a program or, in fact, to a corporate entity. People become loyal only to other people. The kind of person who forges loyalty acts as a consultant, an orchestrator of resources and, above all, a relationship builder.
People who are skilled at generating loyalty understand that loyalty must be earned. A workforce full of such people would rule any industry. But such employees are rare. The vast majority of working people don’t act as loyalty generators. They don’t understand that the underlying purpose of every client conversation should be to create loyalty by strengthening their personal relationship with the client. And, even if such an idea makes sense to them, they don’t know how to do it.
Remember the quote from Peter Drucker, the great proponent of management by objectives: “What gets measured gets done.” If we’re measuring CSAT, that becomes the objective. That’s what your employees will strive for. But customer satisfaction isn’t enough!
Suppose we raise our sights above CSAT measurement and rewrite our definition of success? What we really need is a solid business relationship, not just the satisfaction that may come from an acceptable transaction. When we are successful at building that relationship with our customers, we’re in a strong position to create loyalty. Without a growing and valuable relationship, all bets are off.
It’s time for a different goal and a different measuring stick. I’d even take this one step further: It’s time to rewrite the job responsibilities of your customer-contact teams—all of those employees in functions with names like customer support, tech support and customer service. These are people who probably have far more contact with customers than your formal sales teams.
Labels like service, support or specialist won’t give these people the message that what you really want is stronger relationships that result in loyalty. I’d suggest replacing these job titles with something else: Customer Relationship Professional.
If you agree, then you’ll need to rewrite your definition of what a successful customer interaction looks like. It isn’t one in which the customer appears to be satisfied with the dialogue or the solution. Instead, a successful interaction is one in which the relationship between employee and customer is moving the customer toward a decision to stop shopping for alternatives.
If we follow Peter Drucker’s philosophy about measuring the right things, we should be measuring retention, advocacy and purchasing trends—not CSAT. When we do this, we’ll be sending the right message to our team of customer relationship professionals. And, we’ll be creating loyalty.