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Are Your Customers Satisfied?
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Kathryn SaducasPartner marketing manager
Are your Customers Satisfied?
The importance of customer satisfaction
to your business
Customer focused organisation
Goals of Customer Focus:
End goal of customer focused strategies is the same:
Boosting retention and repurchase = more sales!!!
Creating Better Products or Services
Offering compelling customer experience
Building deeper customer relationships
Business Performance Factors Contribution to Shareholder Value
86% 83%75%
71%
62%
47%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Product/ServiceQuality
Customer Sat.& Loyalty
OperatingEfficiency
FinancialResults
Innovation EmployeeSatisfaction
Source: Price Waterhouse Coopers, 2002
Customer Satisfaction = Profits
• Knowing what drives customer loyalty is important to your company’s financial health
• Repeat customers and new customers from referrals continuous revenue streams
• Disloyal customers are expensive to replace
• Attracting NEW customer is 4 x cost of retaining existing customer
• 5% increase in customer retention 75% in aggregate lifetime profits from that customer
What are your customers worth?
• S = average revenue per customer sale
• C = costs of servicing customer
• V = expected # sales per year
• Y = expected # years customer will use your services
• A = cost of acquiring new customer
• N = # of referrals from customer
• F = correction factor
Lifetime Value of Customer (CLV)
= [(S-C)*(V*Y)-A+
(A*N)]*FOR
• Margin * # sales – cost of acquisition + savings from referrals * correction factor
Customer Lifetime Value = CLV
What are your customers worth?
• S = average revenue per customer per sale
• C = costs of servicing customer
• V = expected # sales per year
• Y = expected # years customer will use your services
• A = cost of acquiring new customer
• N = # of referrals from customer
• F = correction factor
– S = $20,000– C = $5,000– V = 2– Y = 5– A = $1500– N = 4– F = 1.2
CLV = [($20000-$5000)*(2*5)-$1500+(1500*4)]*1.2
CLV = $185,400
Customer Lifetime Value = CLV
3%5%
9%
14%
69%
No reason
Other Suppliers
Competitors
Product Dissat.
Attitude of owner,manager or employee
Why Customer Sat. is important?Study by Le Beouf: “the reasons why customers no longer dealt with a particular supplier”
A customer satisfaction
program
Customer-Focused Initiatives
Customer Value Attache
Nokia product engineer goes on-site with customer for up to 1 month to learn about challenges and show how Nokia can add value
Customer Champion
Create a customer champion Director who is responsible for championing the voice of the customer through the organisation.
Customer Success Engineer Team
Centralised group that diagnoses root causes of complex customer problems and implements solutions across business
Everyday Life Observation
To gain deeper understanding of customer, send video crews & TV cameras into 80 households around world to capture customer daily routines
Customer Charter & Advocate
Independent customer advocate whose role is to resolve particularly difficult customer and business problems. Customer charter to improve customer experience with service.
Customer Partner Experience
Organisation-wide customer and partner satisfaction index to provide a holistic view of business health and trigger specific corrective actions where necessary.
The 6 Ps of Marketing
Customer Feedback Program
• With a well constructed feedback program you can get key insights into customers to:– Identify key drivers of customer experience– Glean insights into health of your company– Detect early warnings of any erosion of your
relationship or value proposition
Customer Program Activities
1. Assess internal root cause for customer perceptions – satisfaction drivers
2. Derive action plans to resolve most critical issues – set your objectives
3. Implement these actions4. Track your progress with ongoing customer
research5. Link these customer metrics to your financial
results & staff incentives6. Tell your customers how you used their
feedback
2
1
3
4
5
6
Case Studies
Rice University Case Study showed customer satisfaction improves customer retention and company profits
• Methodology:– 50% surveyed (group 1)
and 50% not surveyed (group 2)
– Group 1 were twice as loyal to company
• Conclusion?– Customers want to be
coddled– Surveys increase in
auxiliary product sales– Surveys create opinions
At Microsoft
• Worldwide Survey Apr & Oct• Customer Escalation Tool• RMTP – Response Management Through
Partner• Feedback forms at events (9 point scale)• Tactical Research – Qualitative &
Quantitative• Anecdotal feedback• Roundtable sessions
Understand Satisfaction Drivers
Customer Customer SatisfactionSatisfaction
Access to Access to products & products &
ServicesServices
Emotional Emotional FactorFactor
Service Service QualityQuality
PricePrice
Product Product QualityQuality
Value Mapping
low high
high
satisfaction
value
support
product
reputation
Sales staff
Brand
service
Easy to do bus with
Bus expertise
Example of Value Mapping
Service Deployment Time [30%]
Reputation and customer
testimonials [25%]
Account Managers/ Sales
experience [15%]
After Sales Support [10%]
Business Process [10%]
Market/Branding [5%]
Innovation [3%]
Strategic Direction [2%]
low high
high
satisfaction
1 2 3 4 5 6 7 8 9
Avoiding the Pitfalls
• Listening to the wrong customers• Incorrectly identifying customer priorities• Failing to consider strategic objectives• Failing to align organisation around
execution• Failing to ‘get paid’ by customers for new
value• Losing momentum – “campaign mentality”
Case Study – GAP Clothing
Ways to measure customer satisfaction
Annual Customer
Satisfaction Surveys
Focus Groups (Formal/ informal)
Online Questionnaires
Phone or Fax
Surveys
Feedback Forms
Online Polls
Customer Service
FeedbackCRM
SoftwareOther
Surveys (Benchmarking, Employee, Org
Alignment)
Different forms of measurement
Partner Program - CSAT Tool
http://www.microsoft.com/partner/media/csat/
Microsoft CSAT – Points AwardedParticipation
Individual Customer Responses
Points
10-24 5
25-49 10
50-99 15
100+ 20
Net Satisfaction (20+ responses required)
NSAT Score Points
165-174 10
175-184 15
185-200 20
Partners may only survey the same individual once every six months.
Only the first eight individual responses per customer organisation are eligible toward Partner Points calculations.
1
12
2
3
4
3
5
6
7
84
9
9 Point Scale 4 Point Scale
Measurement & Reporting
• “Satisfaction” can be measured on a scale• Align business functions around a single customer-focused metric
NSAT = (VSAT-DSAT) +100
VSAT = 8+9
DAST = 1 to 4
Food for ThoughtThe name of the game should be
about "giving customers a memory and experience so great that they'll want to repeat it." The game is not all about getting that score—that darned customer score—any way
possible.
10 Golden Rules1. Believe customers
possess good ideas2. Gather customer
feedback at every opportunity
3. Focus on continual improvement – start with top 10 issues bugging your customers
4. Solicit good and bad feedback
5. Seek real time feedback
6. Don’t spend vast sums of money
7. Make it easy for customers to provide feedback
8. Leverage technology to aid efforts
9. Share feedback throughout the company
10. Use feedback to make quick changes
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3
4
5
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7
8
9
10
In Summary“You can’t move a mountain in
a day, but you can make it easier to climb by clearing a
path.”
Information Source:
• “Why track end to end customer experience?” TNS Prognostics White paper
• “Driving Customer-Focused Decision Making” – Marketing Leadership Council USA
• www.Marketingprofs.com
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