Sunday, February 15, 2009

Metric Monday: Satisfaction and Willingness to Recommend

How do you know if your customers are happy? How do you know if they’re not? How do you figure out the intensity of their feelings? Understandably, most customers who are really happy will tell you. The same goes for those who are not. It’s the unwashed middle that you should be worrying about. They represent the part of your customer base most susceptible to the competition.

Whether your customers are actual consumers of your product or service, donors to your cause, or partners with your organization, understanding what they feel about you – and how intense those feelings are – is an essential metric that when used can help your bottom line. In today’s edition of Metric Monday I am going to offer a few perspectives on how to assess satisfaction and willingness to recommend.

Most marketers know they need to measure customer satisfaction, but not the real reason why. Satisfaction serves as a predictor of future success. It is one of the few forward measurements that can be taken whereas most metrics are latent in nature. Willingness to recommend serves in this same function, but is a good measurement of the intensity of satisfaction. Both metrics quantify an important dynamic. When a brand has loyal customers, it gains positive word-of-mouth marketing, which is free and highly effective (see my radio interview with Andy Sernovitz, founder of the Word-of-Mouth Marketing Association).

Customer satisfaction is generally measured on a five-point scale allowing for two positive ratings, one neutral rating, and two negative ratings. I hate this and think it is a misguided way of looking at satisfaction scores. Here are my problems with this approach:

  1. Customers are either satisfied or not. You can’t be half in love, or half anything for that matter. You either are, or are not.

  2. It’s nearly impossible to quantify the difference between what a score of 4 or 5 is in either direction of satisfied or unsatisfied. What does it mean to be a 4 and not a 5?

  3. Giving customers a chance to select neutral only provides people the opportunity to not really make a choice. That ambiguity doesn’t help you one bit. You WANT to know if they’re happy or not.
Okay, so I suggest that your surveys or whatever tool you use to say, “Hey, are you satisfied with your experience?” use a YES or NO response. You can certainly add a skip logic question if the answer is NO to find out what the problem was. I also don’t see any harm in doing the same for a YES response – find out what worked for that customer.

Then for both YES and NO respondents, ask the willingness to recommend question. This gives you the insight as to how deeply they feel about you. In asking this question I suggest you use a three point scale: No, Maybe, Yes. If you set up your survey correct, you should be able to do some cross tabulations to see how many unsatisfied people answered yes, no, and maybe, and how many satisfied people chose those same options.

Here is an example of what the data might mean to you. If you get a bunch of satisfied customers who say they are not willing to recommend you, then your problem could be that although you’re meeting expectations you’re not very exciting, inspirational, or are seen as an undifferentiated commodity. Basically it means there is no energy behind your brand. In another example if you have a bunch of unsatisfied customers who may be willing to recommend you, then you have a major opportunity to fix something and generate a bunch of advocates for your organization. I’ve created a simple matrix below for you to consider as possible action plans. (Click on the image for a larger view.)

Bottom line: Measuring your satisfaction scores is a must. Collecting and analyzing the data over time will help to identify trends that are critical not only to your competitive success but also to your ability to identify problems and fix them before they become serious problems. Measuring your audiences’ willingness to recommend your organization, or products, is a great tool for identifying action plans to retain customers while growing your base of grass-roots evangelists.

How is your organization measuring customer satisfaction or willingness to recommend? How is it working for you? What actions are you able to take from that metric?

-- David Kinard, PCM

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