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?
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 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!
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.
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.
Preparing a customer experience feedback form and survey for your restaurant guests is a tricky affair. On the one hand, you need to mindful in keeping the form short and relevant to not bore the guests and on the other you need to know about the customer and their experience at your restaurant to help you improve service and connect with your guests better.
This one is hard to crack, we know. And going wrong can really ruin your guest feedback response rate in the restaurant. Don’t fret. We’re here to throw in some suggestions that can help you build a good survey.
For starters, keep it small and relevant. You may be tempted to ask a lot of questions. But hold your horses. Your guests aren’t going to be as enthusiatic. A good and effective survey should have between 5 to 10 questions. Anything more can lead to lower survey completions.
We’ve listed 5 type of questions that you can ask your guests in a customer experience survey after they’ve dined with you at your restaurant.
Capture customer details will ensure that you can stay in touch with them even once they’ve left your business, by way of keeping them updated with latest additions to your menu, and reminding them about your promotional events and season discounts. Store their birthdays and anniversaries and sending them greetings on their special days. Nothing makes a person’s special day more than receiving an unexpected greeting, and doing so will enable you to create an indelible impression in their minds about your brand.
Customer Experience Rating
It is vital to garner your customer’s opinions about your service. After all, they’re paying for it, receiving it and are in the best position to comment upon it. No matter how convinced you may be about the superiority of your own service, it is ultimately the customer’s word that counts. Hence, asking your customers to rate the various aspects of your service is essential to your long-term planning and success. By collecting your customer’s opinion on various aspects of your service – including taste of food, quantity served, ambience, time taken to process request, politeness of servers, price for service rendered and the like, you can find out which areas of the business your customers are most happy with, and which areas you need to improve upon immediately.
If the feedback system comes with an interactive reporting suite, you can even examine the individual impact of each of the aspects in isolation to determine the return on investment on any one aspect, for example, the effect of investing on ambience by compensating the increased cost with higher prices. This can allow you to establish what your customers think about your service, in totality as well as when the various aspects are viewed in contrast to each other, thus enabling you to focus on areas that need your attention the most.
If there is one question that presents an aggregate view of your customers’ loyalty, it is the Net Promoter Score question. In just a simple statement “On a scale from 0 to 10, how likely are you to recommend us among your family and friends?”, you can determine if your customers are impressed enough with your service to put their reputation on the line by recommending your brand and acting as your brand ambassadors/ evangelists without any cost to you!
By tracking the trend of NPS over time, you can also see for yourself the growth and maturity of your company in the market. Typically, as your company grows, the NPS © should increase, while a decreasing trend of NPS © would signal a problem.
Customer Effort Questions
The answer to this question can help you determine your reach into your market. Questions like “how did you hear about us” or “how accessible is our restaurant” can help you know your most reliable advertising agents and how difficult it is for your customers to reach your place. This can further enable you to plan accordingly and make changes in your advertising mix, such as pamphlets, newspapers, or maybe putting up a big hoarding overlooking the road.
By keeping a few of these things in mind, you may be well on your way to creating an extensive feedback survey for your business and getting the most from your customers.
Customer Comments & Views
Always wrap up your survey with a question that allows the customer to share his comments and views about the experience at your restaurant. While too many open-ended questions can be exhausting for the guest filling the feedback form, a question summarizing their experience can be very helpful in analyzing what’s going on in your customers mind. It also helps in more qualitative review of your restaurant’s performance.
One of the most prevalent misconceptions in today’s business environment is the idea that a repeat customer implies customer loyalty. Business owners and managers like to believe that a customer who brings business again and again is a loyal patron of the establishment. While this may not be far from the truth, there is a subtle difference between a ‘loyal customer‘ and a ‘repeat customer‘.
What makes customers loyal?
Let us see the various reasons why a customer may be choosing to do business with you repeatedly:
- It takes a lot of effort to go elsewhere
- You have achieved cost leadership in your segment
- Old habits die hard
- They may have developed bonds with your employees (rather than your business)
- They are keeping you as a ‘safety back-up’ while actively searching for alternatives
In each of these cases, a competitor can swoop in and win away your customer by attractive discounts, aggressive campaigning or simply upgrading their service offering. It turns out that loyalty is above repeat customers.
Customer loyalty may be loosely defined as a strong belief in your customers that your organization’s product or service is their best available option, maximizing their value appeal. Loyalty is expressed by customers when they stand by your business through thick and thin, when they are not seeking out competitors, and if approached by them, ignore them. They will spend extra time and effort to approach your establishment.
How can you build more customer loyalty?
To sum up, customer loyalty is much more than repeat customers, and it goes a long way in building your brand. Here is how you can build loyalty among your customers:
- Reward your customers for choosing you over competitors.
- Treating your employees well – it is said that employees are the first customers of any company. The surest way for you to induce a sense of customer service in your employees would be to treat your staff just as you would like your staff to treat your customers.
- Maintaining accounts of your repeat customers and keeping track of repeat customers preferences and dislikes.
- Keeping in touch with your customer base over the Internet – advertising all major events on social media, and a personal email on birthdays and anniversaries.
Easier said than done! Any business operating in the service industry would probably already be doing, or have a plan in place to start doing each of these tasks to strengthen their customer base. The important question that remains then is – how to measure what impact has it created?
Measure Customer Loyalty
Quantifying customer loyalty however, can get tricky. There is hardly anything to be gleaned by asking your customers directly if they are loyal to you, as customers may easily report being loyal to several businesses simultaneously! To measure customer loyalty, we need answers to questions that address the behaviors and attitudes of truly loyal customers:
- Likelihood of recommending your company to other people.
- Likelihood of continuing purchase of products and services from your company, equal to or more than the current quantity.
- Believing that your products or services are the best in the market at the current price level.
- Opinion formed of staff members who directly interact with and deliver service to them.
- Ease of giving honest feedback to your company to help overcome any shortcomings in service quality.
These are few of the questions that can help a business determine which of their customers are strongly attached to the brand, while which are most vulnerable to leaving for a competitor at the first notice.
Measuring loyalty is just a piece of the puzzle. The other part is to figure out why few customers are loyal, few are vulnerable and several lie between the two extremes – let’s call them neutral. And since the best information is always the one that is obtained from the source itself, businesses should invest in developing systems that enable them to collect feedback from their customers about their service level, areas of improvement and any gap between their expectation and actual delivery.
So, are you doing your bit to figure out your customer loyalty?
More and more companies are waking up to the fact that customer experience is an area demanding substantial investment of time, money and effort in their business. And for good reasons, as these figures reported in leading studies indicate:
82% of people stopped doing business with a company after a bad experience
Over 79% of people told others about their bad experience, 55% went online to vent their anger, and 66% wanted to discourage others from buying from the company
85% of people agreed to paying more for a better customer service experience
55% are willing to recommend a company for their good experience, above product or price
The report went on to mention that a negative experience in receiving the service was a bigger cause of switching brands than poor quality of the service itself
Clearly, a superior experience means a higher NPS ©, more customer loyalty and an increase in average customer spending – translating to more revenue per customer. In the long run, a superior customer experience would go on to differentiate your brand’s offerings from those of your competitors, affording a significant competitive advantage.
The other part of the question is where the investments need to be made. Successful businesses have since long made investments to improve customer experience in the following ways:
We discussed how a customer-centric company makes effort to hire customer-centric people as staff. This has the twin benefits of a better service experience for the customers and higher employee job satisfaction, leading to lower employee turnover and a reduction in the costs involved with training and recruitment of new employees.
Strong customer loyalty programs
Rewarding regular patrons will provide a big incentive for your customers to spend more and visit more frequently. It is a known fact that more business from existing customers comes cheaper than attracting new customers.
Reduction of customer effort
An old adage says that customer is king. And to make customers feel like royalty, businesses make efforts on the part of their customers. By making their menus/ service areas less cluttered and more amenable to locating products and support staff, they have effectively made efforts which otherwise their customers would have to make every time they made a purchase.
A superior customer experience would entail quick resolution of problems, something that would require fast and seamless transfer of information across the business. It may not suffice if a customer’s feedback is shared once they leave the premises – real-time, on-premise feedback is more valuable in the sense that it allows the business to appease the customer before they leave, eliminating any threat of negative reviews from going online.
While most businesses would be tempted to consider the above as costs, a business focused on improving its customer’s experiences will treat these as investments, and the kinds that pay big dividends.
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.
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.
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:
- 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.
- 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.