Three Keys to Measuring and Managing Customer Satisfaction

All of us think we can whip up a customer satisfaction survey with a rating scale, send it out, and tabulate the results. What’s so hard about that? What could possibly go wrong? Here are three keys to getting it right.

First, customers form their views based on the end-to-end customer service, not just on your product. For example, if you were surveying restaurant customers, you would want to know customer views on each step from the dinner reservation through stamping their ticket for free parking as they leave. Suppose you only asked about the food and they loved it, but what they didn’t tell you was that they were never coming back because the place was so loud they couldn’t hear the person sitting next to them. You need to deconstruct the customer experience into all its attributes. Otherwise, you may get a high rating for great food, but still lose customers and you won’t know why.

Second, it doesn’t matter if you find out what attributes your customers rate you high or low on if you don’t also find out which attributes they actually care about. Taking the restaurant example, they may rate you low on the comfort of the seating but they may not really care about it either – it may not drive their satisfaction with the overall experience.  Maybe they order your food “to go” because your location is on their way home and they couldn’t care less about your chairs. They might rate you high on satisfaction with your loyalty program, but don’t really care about it, so this doesn’t drive their overall satisfaction either.  What you want to know is which attributes of the customer experience are driving customer sat matrixoverall customer satisfaction. You learn the answer by having your customers rate the individual attributes and then rate their overall satisfaction with the total experience. Then you use multiple regression analysis or similar statistical techniques to understand how ratings of each attribute correlate with ratings of overall customer satisfaction.

Third, act on the results. The only thing worse than having customers who are not satisfied with your service, is asking them what they think and then ignoring what they say. Visualize the results of your analysis as a 2 x 2 matrix.

  • Focus first on fixing the attributes that fall into Box 1 (customers care and are dissatisfied).
  • Next see what you can do to improve the attributes in Box 2 (customers care and are satisfied) to keep up with the competition.
  • Keep an eye on the attributes in Box 3 (customers don’t care and are dissatisfied) to make sure their dissatisfaction doesn’t become so extreme that  it “leaks into” Boxes 1 and 2.
  • Finally, shift resources from Box 4 (customers don’t care and are satisfied) attributes to fix and improve Boxes 1 and 2. For example, it might make sense to give up on a loyalty-points program if it doesn’t drive overall satisfaction.

If you want to learn more, I still find Ray Kordupleski’s book, Mastering Customer Value Management (2003)  is a good place to start. One of the things Ray emphasizes is that on a 10 point scale, he finds most businesses need to get ratings of 8 or above before a customer will demonstrate loyalty or recommend your business to someone else. In his words, “6 or 7  may seem good, but when it comes to measuring customer satisfaction, good is bad.”  There are other good resources and plenty of firms that specialize in customer satisfaction measurement. If you don’t have in-house expertise in statistical analysis or survey design, buy it. Measuring customer satisfaction is harder than it looks. Invest in it wisely and you will learn what matters to your customers and therefore to your business.

7 responses to “Three Keys to Measuring and Managing Customer Satisfaction”

  1. I like the model. It’s a simple yet powerful frame of reference. It makes me think that there might be a third dimension which is “Easy to fix vs Difficult to fix”. In my experience, this 3rd dimension get us in trouble by drawing our attention away from the priorization suggested by the first 2 dimensions. For example if it’s easy to fix something that customer is dissatisfied with but doesn’t care about, the team may think that they’re “flying” when they’re really just peddling off the cliff.

    • Excellent point, Charlie. It would be useful to add the idea that once you know what the customer cares about, you still need to set your priorities on what to fix and improve based on how much it will positively impact the customer, rather than how easy it is for you fix. So called “quick wins” need to also be “important wins.”

  2. Giles,

    Good article and fully agree. Some feedback items take time to work on them and show the results and could leave the customer wondering. Therefore, prepare an action plan immediately and share with customers – they will appreciate it and give you time, so you can fix it properly rather than getting rushed.


    • Thanks Reddy. I like your additional point about sharing the action plan with the customer as this will further validate the “fix and improvement” priorities as well as manage expectations.

    • Thanks for sending the HBR link. That’s a great example. Customers were rating interactions with individiual customer support staff highly but were dissatisfied with the number of interactions they had to go through and no one asked them about that. The customers cared about the hassle of the total end-to-end experience. I really identify with this one. I often find the individual customer support people try very hard to help and often do so, but after I have been passed from person to person I am burnt out. My interactions with Verizon are the poster child for this experience because they have all these services sold to me as a package, but there is no service integration on their side that reflects a packaged approach.

  3. […] Some of your most valuable customers are those who are not satisfied and tell you about it. Make them satisfied and you will find they become some of your best promoters. You can also use well-crafted satisfaction surveys to learn who your customers are. See my post on measuring customer satisfaction. […]