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

1

2

3

4

5

6

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