Customer Satisfaction or Market Driven Quality

How do you know your customers are satisfied?

It is clearly very important to establish the customer's perception of the quality of product and service provided. This may be in some part determined by customer complaints or warranty returns, but it is often stated that the customer rarely complains, they just don't come back. When this statement is balanced with - the amount of investment (financial and resource)  placed on identifying and gaining new customers (seen as a means of increasing market share), against the investment on retaining old customers. Then maybe the effort and resource is being placed in the wrong area. If old customers are being lost, possibly at the same or higher rates as gaining new customers, then a new approach is required. It may be worth considering investing money on retaining existing customers. On this basis customer loyalty is worth ten times the price of a single purchase, as a loyal customer will return to make further purchases.  Le Boeuf suggested that organisations spent six times more obtaining new customers than keeping old customers.

A Sales Director of one successful organisation believes that if customers like the service, they will tell three people. If they don't like the service, they will tell eleven people. This illustrates the effect of a customer complaint over customer praise and how quickly news of bad information over good information spreads. (What sells newspapers is good or bad news? - I seem to remember a newspaper that purported to tell only good news quickly failed).

A study detailed by Le Boeuf on the reasons why customers no longer dealt with a particular supplier gave the following results:

• 3% move away giving no reasons,
  
• 5% develop other supplier relationships,
  
• 9% leave for competitive reasons,
  
• 14% are dissatisfied with the product,
  
• 68% quit because of an attitude of indifference toward the customer by the owner, manager, or some employees.

For a typical approach the issues that may need to be considered are:

• Firstly to "understand the customer needs and requirements".

• To examine various means available to determine levels of Customer Satisfaction (and dissatisfaction), "Measures of Customer Satisfaction"

• To examine the use of questionnaires as one means of determining levels of Customer Satisfaction. Including the

• Reliability of such methods
  
• The various sampling techniques available
  
• The methods that can be employed to increase response rates
  
• And some example Customer Satisfaction questionnaires

For further information regarding this article or on measuring, monitoring and improving levels of Customer Satisfaction please contact help@qmt.co.uk.

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