Why satisfaction isn satisfying

It's time for the auto industry to move away from what's broken toward a system that will aid dealers and their customers.

They can no longer be satisfied with mere satisfaction. Discover how your organization can attract, retain and engage millennials. Subscribe to the Gallup News brief and real time alerts.

Stay up to date with our latest insights. In the second of a two-part interview, a longtime Toyota executive explains the world's best selling car manufacturer's methodology -- and how it creates loyalty.

He also discusses matters such as why all the new cars look alike and why the market for luxury cars is expanding. There isn't much Bryan Bergsteinsson doesn't know about cars -- building them, selling them, and driving them.

More significantly for executives across industries, he questions the value of customer satisfaction ratings and explains why engaged customers are more valuable than merely satisfied ones. The auto industry continues to ignore the enormous impact of consumer emotions.

This despite the fact that research reveals that auto buyers are motivated not just by confidence in vehicle performance but also by real passion for the brand. Many companies seek to enhance their brand value. But before they do that, they must first ask: Where does that value come from?

The answer isn't as simple as you might think. Notice: JavaScript is not enabled. Please Enable JavaScript Safely. Business Journal. Fixing what's broken Part of the reason for the decline in use of -- and enthusiasm for -- customer satisfaction measurement stems from the measurement process itself.

Don't satisfy -- engage Customer engagement represents a much more meaningful outcome than satisfaction for an auto dealer, just as it has proven to be a more meaningful outcome for a clothing retailer, a grocer, or a banker. Author s William J. McEwen, Ph.

Yes, totally satisfying customers requires some investment and ingenuity—but it pays for itself many times over. Clearly define your target customers, i.

Factors such as loyalty-promotion programs e. Completely satisfy customers by providing top-notch support services making your basic product or service easier to use and a highly responsive recovery process when something goes wrong. You also have to listen carefully to find out how target customers perceive the service experience and what they want most—and then give it to them. Lexus dealers provide the basics—and much more. Dealers completely satisfy customers by picking up their cars at their homes or offices; leaving loaners; repairing, cleaning, and returning cars later that day; retrieving loaners; and, of course, checking later to make sure the repairs were done properly.

All are feeling pressure from strong competitors, and the corporation has created a customer-satisfaction survey as one method of measuring the impact of its quality-improvement process. After dispensing with several items on the agenda, the group turns to the third-quarter customer-satisfaction indices, and a transparency is placed on the overhead projector. There are three divisions with average ratings of 4. There is general consensus that they have reached the point of diminishing returns and that further investing to increase customer satisfaction will not make good financial sense.

The group next examines the results of the division with the lowest average rating, a 2. This business unit manufactures bulk lubricants and sells to companies that repackage the product for sale to the retail channel.

It is a highly competitive, commodity-type business and operates with very tight margins. There is a general consensus that its customers are a lost cause and that it does not pay to make additional investments to try to satisfy them.

Finally, the discussion turns to four business units whose customers generally are neutral or pleased but certainly not delighted. Two divisions manufacture large industrial machinery.

Two other divisions provide after-market service for the products of both the company and its competitors. Each division has an average rating between 3. The others nod in agreement. Implicit in this discussion are a number of beliefs widely held by managers of the dozens of manufacturing and service companies we have studied.

First, it is sufficient merely to satisfy a customer; as long as a customer responds with at least a satisfied rating a 4 , the company-customer relationship is strong. In other words, a level of satisfaction below complete or total satisfaction is acceptable. After all, this is the real world, where products and services are rarely perfect and people are hard to please. Second, the investment required to change customers from satisfied to completely satisfied will not provide an attractive financial return and therefore probably is not a wise use of resources.

Finally, each division with a relatively high average rating 3. Striving to understand the causes of their dissatisfaction and concentrating efforts on addressing them is the best use of resources.

The extensive research that we conducted on the relationship between customer satisfaction and customer loyalty, however, shows that these assumptions are deeply flawed. They either ignore or do not accord enough importance to the following aspects of the relationship:. At the heart of any successful strategy to manage satisfaction is the ability to listen to the customer.

There are five major categories of approaches that companies can use to listen to their customers. Most highly successful companies employ several, if not all. Many average or poor performers either use very few or, if they use many, do a poor job of incorporating the results into their strategies.

The five categories are:. Customer-Satisfaction Indices. The fact that such indices are quantitative makes them a useful tool for comparing results from different time periods, locations, and business units. A company cannot implement a recovery strategy—a plan for making amends when something has gone wrong—if it does not know who has had a problem. Market Research. Although companies traditionally invest significantly in this area, they often overlook two critical listening points. Customers should be interviewed both at the time of arrival when they become customers and at the time of departure when they defect about the reasons for their behavior.

It also is absolutely critical to understand why a customer defected. Gleaning that information requires a high degree of sensitivity and skill because most customers will blame the price or some other relatively basic product attribute in order to avoid discussing the real issue. Frontline Personnel. Employees who have direct contact with the customer provide a superb means of listening. They also must have processes in place to capture the information and pass it along to the rest of the company.

Many companies that excel in satisfying customers have institutionalized one other practice: All employees—not just those with frontline jobs—spend a significant amount of time interacting in depth with customers. Strategic Activities. Some companies go to extremes to involve the customer in every level of their business. MTV, the cable music channel geared to to year-olds, insists that most of its employees must belong to the demographic target group. Intuit, the financial-software company, regularly brings in customers to participate in product-development sessions.

Executives at Xerox Corporation, which had conducted in-depth satisfaction studies of its office-products customers, played a major role in helping us define our research project. High-quality products and associated services designed to meet customer needs will create high levels of customer satisfaction. This high level of satisfaction will lead to greatly increased customer loyalty.

And increased customer loyalty is the single most important driver of long-term financial performance. Separate research has validated these beliefs. Reichheld and W. Earl Sasser, Jr. Although these assumptions might seem relatively simple, one discovery by Xerox shattered conventional wisdom: Its totally satisfied customers were six times more likely to repurchase Xerox products over the next 18 months than its satisfied customers. The implications were profound: Merely satisfying customers who have the freedom to make choices is not enough to keep them loyal.

The only truly loyal customers are totally satisfied customers. Was this relationship between satisfaction and loyalty unique to Xerox? To investigate, we scrutinized more than 30 individual companies and analyzed data from five markets with different competitive environments and different types of customer relationships.

The five markets were automobiles, personal computers purchased by businesses, hospitals, airlines, and local telephone services. These feelings manifest themselves in many forms of customer behavior.

The ultimate measure of loyalty, of course, is share of purchases in the category. In the automobile business, it is share of garage. In the clothing industry, it is share of closet. Unfortunately, such information is rarely available at the individual customer level.

But there are alternative measurements, which we have grouped into three major categories. Intent to Repurchase. At any time in the customer relationship, it is possible to ask customers about their future intentions to repurchase a given product or service. Although their responses are simply indications of future behavior and are not assurances, they have very important benefits.

First, companies can capture this information when they measure satisfaction, making it relatively easy to link intentions and satisfaction for analytical purposes.

The fact that intent to repurchase can be measured at any time in the customer relationship makes it especially valuable in industries with a long repurchase cycle. Finally, intent to repurchase actually is a very strong indicator of future behavior. Although this measure will generally overstate the probability of repurchase, the degree of exaggeration usually is fairly consistent, meaning that the future results can be predicted fairly accurately. Primary Behavior. Depending on the industry, companies often have access to information on various transactions at the customer level and can measure five categories that show actual repurchasing behavior: recency, frequency, amount, retention, and longevity.

Although they are important measures of actual behavior, they only provide a glimpse of overall share and are most useful as an indication of changes over time.

Moreover, sometimes they can send the wrong message. For example, the credit-card industry traditionally measured the willingness of the consumer to pay the annual fee as its prime measure of retention.

The consumer was willing to pay the fee to have the credit card available but often did not use it. But the competitive edge is not all. Yes, this also concerns your previously loyal customers. Every company should treat customer satisfaction as an essential business factor and work on improving it. As such, it helps predict business growth and revenue.

Maybe some of your clients simply forgot to cancel their subscriptions. Maybe they procrastinate switching to your competitors. They let you determine what exactly influences the satisfaction—or lack of it—among your customers.

And it pays off to keep your customers happy. A high customer satisfaction level guarantees long-term clients and makes you stand out from the competition. It also lets you avoid the dire consequences of bad customer experience : churning customers and negative word of mouth.

The equation here is simple. To track customer satisfaction, you need to set up a CSAT Customer Satisfaction Score survey that asks the clients to rate their experiences with your company, usually on a 1-to-5 scale. It allows them to explain their choice and gives you concrete feedback. But CSAT is not the only customer experience metric out there.

One of them is the popular NPS Net Promoter Score that monitors how likely your customers are to recommend you to their friends and colleagues. Measuring and analyzing customer satisfaction should become a permanent addition to your business—not just something you do from time to time or to deal with a reputation crisis. Customer survey software can help you set up recurring surveys, collect your answers, and analyze them in one place. This will let you create a sustainable customer satisfaction measurement process.

What is the purpose of customer satisfaction? But there are more tangible benefits of customer satisfaction. And for a quick visual summary, check out our infographic on the importance of customer satisfaction. Just click the preview below:. Have you ever wondered why banks or mobile providers are always ready to go the extra mile just to keep you around?

Always try to keep your clients satisfied to prevent them from churning. Meet their needs, solve their problems, and nurture them. One of the brands that heavily invest in keeping their customers extra happy is Tesla. They pride themselves on effortless car services. An outside-of-workshop service cannot be cheap—but it must pay off in the long run!

There are many reasons for brand switching. The main culprit is usually the prize—but poor customer experience is climbing up the rankings. It takes up to 12 positive experiences to make up for a negative one , and some clients will not stick around for that long. Customers value ease above everything else. This is why avoiding frictions is more important than going out of your way to delight your audience. Maybe at least you'll tell them how they can improve for their other customers!

Chances are, your old clients will get annoyed and leave, and the new ones will find the very same feature annoying. Plus, through feedback, loyal customers can help you come up with new ideas for products and services. At Survicate, every time we run customer surveys, we pepper in an open-ended question that asks customers for their next big idea.

Of course, being customer-friendly is not an end-all, be-all of business success. You still need to offer a solid product or service and have a good market fit. But as Don Peppers put it ,. The only thing you can do to differentiate yourself is delivering exceptional customer service and satisfying your clients.

Consider the example of a Polish online store with specialty coffee, CoffeeDesk.