Journey of a Serial Entrepreneur

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How to get from where you are to where you want to be

Non-Financial Metric #1: Customer Satisfaction

”The single most important thing to remember about any enterprise is that there are no results inside its walls. The result of a business is a satisfied customer.” Peter Drucker

Acquiring customers is a challenging task and takes days, months and even years to do. Once you have acquired customers a sense of complacency often sets in. One feels the hard work is done and now we can sell to this client for a very long time. How I would like that to be true. Unfortunately, as we all know the real world works differently. Acquiring customers is the first step, providing value and satisfying the customer is where the actual work begins. It is a well known fact that acquiring a new customer is 5-10 times more expensive than retaining your current customer base. Therefore as business owners we have to do whatever we can to ensure that we provide substantial value and our customers are satisfied with our products or services. Listed below are a couple of steps to help measure customer satisfaction:

1. Identify Touch Points: A customer comes in contact with your product or service either directly or indirectly. Measuring indirect contact such as interaction with other customers or reading online reviews is challenging to track and measure. However we can keep a much closer eye on direct touch points such as websites, telephone operators, retail stores, office or any other points where the customer is in direct contact with us. To do this we need to build a list of all possible touch points and track them closely to see where and how our customers interact with us.

2. Selecting Sub Metrics: A customer satisfaction index is made up of several sub metrics which contribute to a final score. For instance speed of service, perceived quality, and pricing and trust are a few sub metrics one can use. The selection of these sub metrics will depend on the type of product or service to be provided, the type of touch points used and any other factors which impact directly on  the interaction between the customer and the business. It is important not to overload oneself with too many metrics. Select them carefully,  understand and align them with what you deem necessary for an accurate customer satisfaction score.

3. Select Measurement Method: Once we have selected the metrics, we have to select the best way to measure them. Some of the commonly used measurement methods are surveys, focus groups and live observation. These are effective in collating information in a reliable and valid manner. Depending on the size of your sample and the amount of information that needs to be collected,  select a method which has the ability to generate a reliable and valid result.

4. Technology: With the advent of the internet, collecting information from customers at major touch points has become easier. Many website have incorporated feedback widgets which allow the customer to leave their comments and opinion, some websites have live operators which interact with customers to get their feedback and other tools such as, http://www.getsatisfaction.com. This provides a community platform where customers publicly rate and talk about the service. As entrepreneurs we need to leverage these tools to get information faster and more reliably from major touch points.

Once data is collected, there needs to be a structured way to process and assess the business. Unless the business can use the data collected to enhance customer experience, there is little point in undergoing such an elaborate exercise. It is therefore essential that you have  a clear idea about what you want to measure and why from the very beginning. Align your goals and targets in selecting appropriate methods.

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Filed under: Advice, Communication, Customer Service, Strategy, , , , , , , , , , , , , , , , , , , , , , , , , ,

2 Responses

  1. […] 1. Customer Satisfaction: Acquiring a customer is only the first step, providing value and satisfying the customer is where the actual work begins. It is a well known fact that acquiring a new customer is between 5-10 times more expensive than retaining your current customer base. To measure customer satisfaction comprehensively we need to take into account all major touch points where the customer will be interacting with our business. Subsequently we will need to choose several sub metrics such as perceived quality & value, trust and loyalty to accurately gauge their satisfaction levels. These can be measured through a variety of tools such as surveys, focus groups and observations. To learn more please click here. […]

  2. […] – Non Financial Metric #1: Customer Satisfaction […]

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