Listening to the Voice
of the Customer
In Listening to the Voice of the Customer, author Jon Anton guides the reader through 16 detailed chapters, which provide step-by-step guidelines for designing a customer satisfaction measurement program, conducting the survey, and analyzing and reporting the results. Its a comprehensive approach thats sure to help you improve customer satisfaction.
To learn more about Listening to the Voice of the Customer, just read the introduction to Step 1 below.
Focusing On Customer Satisfaction In The New Economy
Even a casual glance at business journals and business sections of daily newspapers reveals that the subject of customer satisfaction is receiving extraordinary attention. As markets shrink, companies scramble to keep their customers rather than expending greater and greater sums chasing fewer and fewer potential new customers.
The simple fact that it costs five to eight times as much to get new customers as it does to hold onto old ones is key to understanding the corporate drive toward increased customer satisfaction.
Although Customer Satisfaction may no longer be a new buzzword in the business community, there is still an enormous gap between the stated goal of many companies to increase customer satisfaction and any attempts to implement that goal. For example, an analysis of the annual reports of all publicly owned companies listed in the Fortune 500 was undertaken by the Center for Customer-Driven Quality at Purdue University in 1994. That analysis failed to find any firms reporting the actual numbers of loyal and satisfied customers they serve, much less satisfaction trends among their customers (Anton, 1994).
While 87% of the 500 companies with annual revenues in excess of $100 million listed customer satisfaction as one of their most important corporate initiatives, we found that only 16.1% of the companies had any method in place to measure their effectiveness in satisfying the customer. This disparity clearly seems less a matter of corporate hypocrisy than a simple lack of information. Of the 365 companies that did not have a method in place, 336, or 92%, asked us for more information about measuring customer satisfaction.
Measuring customer satisfaction is a new concept to those companies which have been previously focused almost exclusively on income statements and the balance sheet. Companies now recognize that the new global economy has changed things forever. There is more competition and that competition is fierce. Markets are crowded with products that customers can hardly differentiate. The years of continual sales growth in expanding markets have been replaced by two decades of flattening sales curves. Todays sharp competitors know they have to change their focus.
Competitors who are going to prosper in this new economic climate increasingly recognize that gathering and analysing customer satisfaction data is the first step to their prosperity. Only by pinpointing customers needs, expectations and desires, can they begin to hold on to the customers they have and, as importantly, understand how to better attract new customers. The competitors who will be successful recognize that building the type of customer satisfaction that leads to customer loyalty is a critical strategic weapon that can bring them increased market share and increased profits. They also understand that focusing on customer satisfaction requires a commitment from top management, changes in corporate organization and new values in the corporate culture.
The problem they face, however, is exactly how to do all this and to do it well. They need to know how to quantify, measure and track customer satisfaction. Without a clear and accurate sense of what needs to be measured, how to collect and analyze the data, then use the research results as a strategic weapon to drive the business, the firm cannot be effective in this new business climate. Plans constructed using customer satisfaction research results can be designed to target customers and processes most able to extend profits.
Too many companies rely on outdated and unreliable measures of customer satisfaction. They watch sales volume. They listen to sales reps describe the state of mind of their customers. They track and count frequencies of complaints. They watch accounts receivable aging reports recognizing that unhappy customers pay as late as possible, if at all. While these approaches are not completely without value, they are no substitute for a valid, well-designed customer satisfaction surveying program. It is not surprising, therefore, to find that firms which formally and systematically measure customer satisfaction are usually market leaders (Treacy, 1995).
To be successful, companies need a customer satisfaction surveying system that meets the following criteria:
- The system must be relatively easy to design and understand.
- It must be credible enough that employee performance and compensation can be attached to the final results.
- It must be inexpensive to implement and monitor.
- It must generate actionable reports for management.
It is our goal in this book to provide you with the information you need to institute just such a program in your own company, one that can be used to expand your companys existing sales and marketing information to include the voice of the customer.