×
Request a Demo

Request a Demo

Look No Further. Get Started Today

 
 

Fieldset

     

    Verification

    4 Metrics You Need To Track to Measure Customer Satisfaction & Loyalty

    4 Metrics You Need To Track to Measure Customer Satisfaction & Loyalty

    Measuring the satisfaction of your customers is tricky business because, for the most part, they are not going to come right out and tell you. However, there are several ways that you can employ to gauge their satisfaction, and address any problems that may have arisen. One of the most valuable resource a business can have is conducting surveys and is, in fact, one of the very few ways to effectively collect customer satisfaction. While you most likely already knew that, are you using all of the metrics available to you?

     

    The Metrics

    More often than not, businesses continue to measure customer satisfaction using wrong or insufficient metrics. Measuring the right customer satisfaction metrics, on the other hand, can help you promptly know how you’re doing, about your customers’ satisfaction, expectations and needs. This is your cheat sheet for the right metrics you can, and perhaps should, apply.

     

    Rate of Return

    The customer rate of return is one of the easiest seen metrics a business can use. In small startups and large companies, the more a customer returns, the strong the loyalty is considered to be. From a business standpoint, you need to treat each new customers like a first date – if you impress them, they will build a relationship with you. As the customer builds that bond, they will tell their friends and your business will grow through word of mouth, which indeed is one of the best forms of advertising and one that can aid any business greatly. However, that same aspect can work against you if they had a negative experience; for this reason other metrics will help you learn more about your customers.

     

    NPS

    1NPS stands for Net Promoter Score, which focuses on a single question “How Likely Are You to Recommend This Product/Service to Friends or Family?” This question is crucial as it helps businesses to gauge what customers are likely to come back. Questions that typically follow will help hone in on what specific ally made the experience so great or horrible. While the NPS is great for gauging who will become a return customer, you need to be able to measure what influenced them to come back!

     

    Customer Expectations

    Meeting your customers’ expectations is the main goal of a business. What is crucial to meeting these expectations, is simply asking “Did you find everything okay,” sounds like a line you hear just about everywhere. There are statistics on that line, that is why it is so popular. Making a customer feel as though you care about their experience strengthens their brand loyalty, but also helps the business realize where a niche may be missed. In large companies, there are many services that are covered, but not everyone needs them. If you can offer “niche products” a customer is more likely to find what they need. Offering a balance of products, having a clean facility, maintained equipment, and an outstanding team is all a part of meeting customer expectations.

     

    Overall Satisfaction

    The final metric that is important you look at is the overall customer satisfaction your company holds. While places of business would like nothing more than to keep customers satisfied 100% of the time, all the time, it is not a realistic right off the bat. While keeping your customers happy with your brand or product is crucial to staying above water, progress is more important. If you have a poor score when you first start out, but after some changes, your score rises, then you are making good progress.

     

    What Works For You?

    Understanding customer feedback, or how it is gained has no specific formula. What works for one person may not be totally applicable to another. However, everyone can learn a few tips and tricks, no matter how long you have been established. It is ideal to build your surveys and feedback forms to help you capture the metrics we described above. They are sure to give you an insight into your customers’ satisfaction levels, their loyalty and recognize issues. After all, customers’ satisfaction is paramount and measuring it right is half the job done, and done well.

    Customer Satisfaction v/s Customer Delight

    Customer Satisfaction v/s Customer Delight

    The business of dealing with and serving customers is tricky and unpredictable. What works for one segment of customers may not be the most suitable option for any other customer segment. To complicate matters even more, customer experience is often manifested over several “layers”, depending on how much the service delivery matches their service expectations.

    In an age where businesses are competing tooth and nail for every incoming customer, merely satisfying customer may no longer suffice for retaining old customers, much less acquiring new ones. Sample the following scenario:

    Imagine you walk into a hotel upon entering a new town, with the expectation of a clean lodging and food, and a decent ambience. Any hotel or inn meeting these expectations will provide you with satisfaction. Delight will result when a hotel exceeds your expectations of these basic necessities and possibly even surprising you – for example, arranging for your transfer when you leave, or replacing the linen in your room without your asking for it.

    Meeting customer expectations of service are crucial to customer satisfaction and running a business successfully, but true customer loyalty can be gained only when the service exceeds customer expectations.

     

     

    “Customer delight is that phase of customer experience when the service offered exceeds the service expected.”

     

     

    While satisfied customers may leave the business feeling happy, they may not return. They may well be swayed by swanky advertisements or deep discounts offered by competitors the next time around. On the other hand, a customer who is delighted by a service exceeding his expectations will become a loyal patron of the brand forever, since the brand will always evoke a positive memory of association for him.

    There are four reasons to invest in additional effort in delighting customers, as it can pay rich dividends in a very direct way:

     

    Increased customer retention through loyalty

    A delighted customer will develop strong loyalty for the brand that provided him with the delight, and will be far less likely to “experiment” with a new brand. Studies have shown that it may be 4 to 9 times more costly to attract a new client than retain an existing one.

     

    More profitable customers

    In addition to retaining existing customers, customer delight can also induce customers to spend more on their dealings with the business. Research has shown that, on an average, delighted customers end up spending more than merely satisfied customers.

     

    Network externalities

    Delighted customers turn into brand evangelists for the company. They will spread word of their positive experience around, shooting up the NPS score© of the company. 92% of customers consider word-of-mouth as the most reliable source of information, so delighted customers may well become a strong asset for the company by bringing in more and more customers, leading to a virtuous circle.

     

    Industry leadership

    The enhanced network of customers developed over time may turn the business into an industry leader on the basis of service differentiation. This will enhance the brand recall of the company. It is common knowledge today that brands such as Xerox, Google and Jacuzzi have become synonymous with the product or service they are offering. That is the power of brand recall – when potential and existing customers will think of your company first and then consider what they need to purchase from it!

     

    While it is established that concentrated efforts by businesses to delight their customers with enhanced levels of service will produce results in terms of increased customer loyalty and a much stronger brand, prudence is advised as this strategy comes bundled with two pitfalls:

    1. It may be a conundrum for businesses as to what lengths they need to go to delight their customers. After all, budgets are shrinking, and the profit gained from incremental investments begins to decrease after awhile – the iron law of diminishing returns.
    2. Add to that the burden of raising the bars of your service level forever in your customer’s eyes. Delighting a customer once might alter their opinion of what constitutes a fair level of service for the price they are paying.

    As with any other conundrum, the solution lies in the middle – identifying when and how to delight customers. Certainly, in today’s business environment it is not advisable to delight every customer, every time; it would be unwise to even attempt that. In fact, in most business dealings, it would make sound commercial sense to just suffice customer’s expectations. Exceeding customer’s expectations will produce the best results if offered when the situation demands it.

    In our example of the hotel cited earlier, arranging for the guest’s next travel plan would make sense when the guest is checking out at an odd time, such as late at night, or has to catch an early morning train or flight.

    Building brands and NPS © takes time and can be perfected with judicious experimentation. Delighting customers by surprising them with unexpected service may turn out to be a unique way to create value and build a strong brand legacy. And the right start would be to implement instant customer feedback systems telling you what your customer’s opinions are about your service at present.

    Effective Listening to Voice of Customer (VoC)

    Effective Listening to Voice of Customer (VoC)

    Once you have established that customer service is paramount to successfully running your service business, the obvious next step is to devise systems and procedures that can help you effectively learn, combat and manage customer grievances and any shortfalls in service levels from customer expectations.

    This is a complex process, though not overly so, and can be succinctly summarised in the following points:

    Effective Listening to Voice of Customer

    Being concerned

    The very first step is to view each customer as a potential detractor, and thus being concerned about any untoward reviews from them. Studies have shown that a single negative review can offset 12 positive reviews. This puts an ever greater pressure on management and support staff to be actively involved with each and every customer, so that no customer leaves disgruntled. The caveat here is that being concerned alone won’t solve the problem, unless supplemented with the following actions.

     

    Installing effective feedback tools

    An effective listening to voice of customers would work only when effective tools to collect feedback are in place. While the definition of ‘efficiency’ in the context of feedback collection tools may be subjective, there are three things that any feedback collection mechanism must provide for it to be deemed worthy of consideration:

      • Ability to capture vast amount of data – Only an innovative and unconventional feedback collection method will excite customers to leave their feedback.
      • Ability to manage all collected data – A massive amount of data is meaningless if not stored in a format conducive to drawing business insights and trends of customer behaviour.

     

    Ability to allow immediate addressal of customer grievances

    As important as it is to store and record trends of customer behaviour, it is equally essential to solve service-related issues that customers may have, while they are still on-premises as this can eliminate the possibility of a customer venting their dissatisfaction online. A study has gone so far as to report that 82% of customers say that the most important factor leading to a great customer experience is having their issues resolved quickly.

    Given that a manager’s focus is on effectively listening to his customers, a logical conclusion would be the installation of a strong and reliable feedback collection procedure.

     

    Understanding your customers and their complaints

    This is basically a continuation of the definition of an effective feedback collection system, but merits a separate mention. Immediate addressal of customer complaints becomes feasible only with a thorough knowledge of what the exact issue is and where the grievance has arisen from. Gaps in service quality can be plugged in only with an in-depth understanding of why and how the lapse in service occurred in the first place. Complete data capturing of customers can help in a more robust loyalty module allowing personalized service to regular patrons.

    This points to the development of a process that naturally tends towards a “systematic listening” and address of customer grievances.

     

    Empowering customer-concerned employees

    With the installation of a sound feedback collection system, comes the added responsibility of delegating responsibilities appropriately to the front-line, customer facing staff members. Doing so will ensure that all customer grievances are handled in a timely and accurate fashion.

    An effective feedback collection tool, should, therefore, provide a means for assigning tasks to staff members, particularly the customer-centric staff. It would be even better if this mechanism could work in real-time, thereby resolving customer complaints quickly and ensuring cent per cent customer satisfaction.

     

    Overall monitoring of customer’s behaviour

    With on-premise resolution of customer grievances taken care of, the real value of a customer feedback system can be extracted from its ability to track trends in customer satisfaction and behaviour over time.

    Customers rate a business over several parameters – pricing, service quality, attitude of staff while interacting with customers to name a few. Their overall satisfaction of interacting with the business will then, not be limited to just the quality of service provided but will depend on a delicate balance of these parameters, based on what weight they assign to each of them. An important thing to note is that these preferences may change over time and vary across customer segments. In an effort to keep all customers equally satisfied over time, these changes must be carefully measured and appropriate actions taken.

    An effective feedback system will allow business managers to understand their customers changing preferences and make business decisions in accordance with those changes. This will truly include the customer’s voice in implementing business strategies.

     

    Getting involved personally

    Last but certainly not the least, nothing makes a customer’s day more than the pleasure of having his issue resolved instantly, and that too with the knowledge that their servers took a “personal” interest in their service. Establishing a personal connection with customers is becoming a vitally important aspect of service-oriented businesses.

    Therefore, merely assigning customer complaints to staff members may no longer help the business acquire and retain customers, but taking a “personal” interest in the resolution of their customer’s issues will. Since this personal connection will help the customers achieve a sense of belongingness with the business and there will then be a higher likelihood of them returning again and again.

    An effective methodology to listen to customer’s voice, then, remains incomplete without a mechanism to getting involved personally with the customers.

     

    Managing a business that does not sell tangible goods but intangible service can be tricky, but a task that can be accomplished if the basics are done right – listen to what the customers are saying, respond effectively and analyse their feedback to make sure things don’t go wrong again.

    add-icon