Business Corner

Customer Satisfaction and Loyalty

By Phil Phillips | September 11, 2006

Delivering customer satisfaction is a major key to success in today's global economy.

Over the years we have developed experience and opinions about customer satisfaction research (CSR) which may be of value to you as your company deals with maintaining and growing in existing as well as target customers.

We would describe customer satisfaction (CS) as being the degree to which there is a match between a customer's expectations of a product and service combination, and the actual performance of that product and service combination. With the rate of change in all aspects of the coatings, paint, adhesives and sealants industries that we are experiencing today and, in combination with the competitive intensity and customer pressures to commoditize, it is most important that companies routinely and properly measure the level of their customers' satisfaction.

Despite the fact that the management of our industries have discussed CS for many years prior to this decade, on balance, little but "lip service" have been paid to the results primarily due to the fact that the exact formula for creating an effective CS program remains nebulous.

Companies now participate in more CSR than ever before, in keeping with the customer focus theme which is currently in "vogue."

Companies that are prospering in the new global economy recognize that measuring CS is the keystone to their success. Only by doing so can they retain the customers they have and understand how to better attract new customers. Those that will be successful recognize that CS is a critical strategic weapon that can bring increased market share and increased profits.

If you believe that CS is absolutely related to loyalty, which in turn leads to increased profitability, market share, and growth, the value of developing an effective program is, therefore, critical. Too many times CS programs are simply "off-the-shelf" surveys, or one from another company the marketing department provides in order to probe their attitudes about CS. This approach requires little effort and is relatively inexpensive; the results are normally less than satisfactory.

Each company has its own set of needs and, therefore, should develop its own measurable program based on those needs and the needs of the customer. Only then will the CS survey be useful to management and lead to future improvements and potential "expectation matches" between you and the customers you seek to capture, grow and nurture over the years.

Here are eight steps which should provide a good measuring technique for the CSR process:

Establish a process to tap into management, employees, outside consultants and industry sources for input on the dimensions critical to your CS.

Use this feedback to develop an ongoing program to identify critical CS dimensions.

Work with a professional staff and develop phone, e-mail and mail survey instruments.

It's imperative to understand the theoretical instruments of the CSS. Keep in mind that CS survey results that simply describe what was found provide no guidance for developing an action plan to improve satisfaction.

Regularly conduct surveys and re-evaluate their reliability and validity.

From the data, develop a CS metric that combines the current level of satisfaction and also analyzes the importance of the various dimensions of that satisfaction.

Employ the dimensional information and develop an action plan for improving each dimension and communicating these improvements to customers. IMPORTANT: Delivery of CS is not a reality if the customer does not notice it.

Tie the performance evaluation and compensation of each employee involved in the action plan to its accomplishment. This tactic insures that the customer's goals match the employees' goals. What gets measured gets rewarded and what gets rewarded gets done.

Customer satisfaction understanding and the ability to develop a viable action plan to constantly improve CS, is a direct result of how much time, effort and management priority is placed on the process from the outset as well as the continued application of these elements between formal CS surveys.

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