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01.18.10
Building Better Customer Satisfaction Through Measurement
 By Jim Berkowitz
Here are several excerpts from an excellent article by Santatu Nandi, an Execitive VP with Firstsource, Measuring Happiness: On the Road to Customer Satisfaction. For much more, checkout the complete source article:
While not the first to draw a bead on customer satisfaction, the telecommunications industry has devoted enormous resources to this area of the enterprise value chain. Telecom's unceasing efforts to reduce customer churn has produced a steady procession of efforts to better identify and quantify customer satisfaction, since it is the lynch pin of customer retention. Indeed, measuring customer satisfaction has become in itself a specialization.
However, customer satisfaction remains elusive. Findings for 1Q 2009 from the American Customer Satisfaction Index reveal double-digit negatives at many leading carriers. The challenges of maintaining a clear picture of customer satisfaction has grown only more formidable as carriers endeavor to do more with less under current economic conditions.
If we agree that the long-term objective of any business is growth, it stands to reason that one of the most cherished agents of growth - customer referrals - should be the ultimate measure of customer satisfaction and should be cultivated to the greatest extent possible.
Assessment models addressing customer satisfaction levels have for too long fallen short of the this holy grail: a customer who will recommend your service to a friend. A customer who has reason to go so far as to advocate on your behalf is the most potent extension of your sales efforts. But how to determine if a customer who is "satisfied" would actually serve as an "advocate?" Enter the Net Promoter Score.
NPS is essentially the net result after subtracting detractors from promoters. In our use of NPS, we have uncovered a rich vein of insights that companies can act on to raise customers from that first level to the second. There are many scenarios in which customers may be satisfied with certain service levels or offerings yet refrain from recommending or referring the larger offering to their friends. One example is a company that is in the process of migrating from a legacy brand to a new brand. Customers of the legacy brand may assign a high CSAT score, reflecting years of experience and depth of brand maturity, yet evidence a low NPS score, reflecting the real or perceived absence of future-oriented investment in the legacy brand. Viewed in this way, you can see why it's possible for customers to assign a high CSAT score for a specific offering while not necessarily backing that with a high NPS score. The first does not necessarily ensure the second.
Arriving at a reliable NPS score requires going beyond the frame of the conventional customer interaction model to determine what customers are saying about you holistically. That means venturing into the realm of online and social media, including opinion and networking websites as well as blogs, to collect, analyze and index customer feedback into a "chatter profile." This chatter profile can be readily converted into an NPS assessment that companies can use to fine tune their customer interactions throughout the "problem lifecycle."
When it comes to customer satisfaction, most business process third-party providers continue to measure quality from an internal perspective. The idea of going beyond this to discover what customers are actually saying about their satisfaction levels well downstream from a specific interaction remains virgin territory to all but the most forward-looking service providers. This is the next generation of customer satisfaction, and it is taking shape today.
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About the Author:
Jim Berkowitz is a seasoned executive with more than 30 years of professional services and project management experience related to Customer Relationship Management (CRM) and Financial Management (Accounting & ERP) software solutions for small, mid-sized and Fortune 500 companies. As a Sales Force Automation and CRM Consultant, Jim has assisted more then 100 companies with the design and implementation of custom CRM solutions.
Mr. Berkowitz is the founder and President of CRM Mastery, Inc.; a company dedicated to serving small and mid-sized enterprises (SMEs) by offering affordable tools and guidance to help them plan for and succeed with their CRM initiatives.
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