Vincent Golding, account director at Kadence International, gives his view on how customer satisfaction scores can be used more meaningfully in the boardroom
You must have noticed the way customer satisfaction only ever gets higher; every year better than the last, everyone gets a pat on the back (some even get a bonus) and the results are published in self-congratulatory headlines: “Eighty per cent of customers are satisfied – hurrah!”
The danger of continually bombarding audiences with this kind of data is that satisfaction surveys lose their potency and their true value is overlooked. In an environment where businesses face unprecedented economic difficulty, the need for ’evidence-based management’ is stronger than ever. Difficult decisions become a lot easier to make when supported by inspiring insight. Such illumination is not so easy to see, however, when we are bombarded by data that has lost its meaning.
Part of the problem is that most customer satisfaction (C-Sat) surveys use an approach that was originally designed to meet marketing needs, while finance and operations departments have shown scant interest because the surveys bear little relation to their own metrics.
One possible solution is for marketing departments to rethink how C-Sat measures are used. With the rise of predictive analytics, there are many new opportunities to gain competitive advantage. Through the eyes of finance and operations, investment in the brand and customer experience is usually seen as a cost, but with the right C-Sat metrics, marketing departments can make the case for investment in the customer, showing measurable returns to the business.
Accounting rules mean that infrastructure is described as an asset, while any investment in the customer is written off as an expense. As a result, annual reports do not reflect the customer as an asset. Until this situation changes there remains a great burden on marketers to justify investments. Using quantifiable measures of C-Sat that link to financial and operational metrics is a powerful way to raise the profile of marketing and secure the necessary budget to adequately invest in the customer.
Leading organisations are using this new approach to successfully re-engineer their delivery to customers with C-Sat measures contributing to outsourcing decisions or quantifying value for money from suppliers. For example, it may be that the organisation can accept a 5% decline in C-Sat over a managed period (while, say, merging an acquired brand), then implement new operational processes in conjunction with marketing communication which helps to drive satisfaction up again. Using satisfaction metrics in a smart way like this will grab the attention of the boardroom rather than just being another pointless press release.
Using C-Sat in this way places much greater demand on the precision of the measure. The old survey methods are fine for PR purposes, but rapidly break down when the output is expected to contribute to decisions around major financial investments. The traditional approach is not sensitive, nor thorough enough to withstand the challenge. Achieving a link between C-Sat and financial metrics requires a totally new measurement science specifically designed for the purpose. This is not a simple NetPromoter or JD Power score, but is rather a bespoke approach tailored to an organisation’s particular quirks and corporate objectives.
When it comes to choosing a C-Sat approach, there are ’horses for courses’. For many it’s just about generating a positive headline, but for the tougher issues facing many businesses today, marketing managers need a tool that helps them to engage in a more sophisticated way and at the highest levels within their organisation. There is more need than ever for C-Sat measures to make sense within the wider context of the business; demanding a sense of realism, a more robust approach and an articulation of C-Sat that inspires respect. So will it be the same old PR exercise trotted out like a pony at the show, or do you want to be keeping pace with the boardroom thoroughbreds?