Keep a tag on your customers

The first quarter for 2010 has come and gone. Many businesses are still suffering or recovering from the effects of the Global financial recession experienced in 2009. Financial institutions are still skeptical about lending money. Borrowing is still very expensive and other sources of cash flow injection are still beyond reach.

For some companies 2010 promises to be a good year, but for some the misery continues. Consumer spending is still low. Global consumer confidence is picking up, but this has not yet directly impacted on consumer spending habits.

Consumers are still skeptical and spending is still limited to important family needs. This scenario has created a tough environment for businesses in general.

This means businesses have to fight for a share of  the consumer purse. As the market space becomes a battlefield, marketers come up with different marketing strategies in order to get a share of the purse.  Customer oriented companies will survive this temporary setback. Global conglomerates such as Starbucks, Wal-Mart and GE continue to experience phenomenal growth despite the harsh economic environment. Their secret is centered on understanding their customers.

These companies continually gather insights and take action on any feedback they get from the market which directly affects their customers. In order to keep a tag on the ever-changing consumer needs, companies need to invest in regular market insight gathering exercises. This ensures they keep a tag on issues that affect their customers and take timely action.

Keeping a tag on customers involves conducting regular or periodic customer satisfaction and mystery shopper surveys.

I will talk about the difference between Customer Satisfaction Surveys and Mystery Shopping in my next post.

To your success!!!

Two ways of Measuring Customer Satisfaction

As consumers reduce their spending due to the prevailing harsh economic environment, it is imperative for a business to measure customer satisfaction.  It is the heart of any modern business strategy. Understanding customer demographics, expectations, motivations, and desires creates an opportunity to serve customers better than your competitors. Serving customers better creates satisfied customers, builds repeat business, and drives profitability.  

In order to survive during these difficult times, businesses need to regularly gather customer satisfaction information on which to base their long term strategies. This information assists businesses to serve their customers efficiently and create competitive clout. Market research has shown that organizations with a well defined service culture have concrete competitive clout. This is more so because service culture is not an event but a process which involves all management from the CEO to the messenger.

It is important to note that one set of data cannot serve both short term and long term needs of the organization. The question to ask before investing in any customer satisfaction study, is a customer satisfaction study the only way to measure overall service evaluation? What about Mystery shopping? How and when should this be used? Can mystery shopping surveys be used to gauge customer satisfaction? To answer these questions, one must understand the overlaps and differences between customer satisfaction studies and customer service measurement studies, such as mystery shopping.

Mystery shopping is a survey method based on a concept called “test shopping” which aims to map the company’s current level of service through capturing the “moments of truth”. This entails the capturing of actual interactions between your staff and customers. For instance, a customer who visited a restaurant a week ago cannot tell you with accuracy about the specific attributes of his/her recent visit.  He/she probably does not remember whether he/she was greeted within a reasonable time, seated within a reasonable time, served within a reasonable time, received ordered food on time, visited a clean rest room, served with a friendly attitude, given a bill promptly, etc.  All of those attributes of the visit, along with many others, combine to create a level of satisfaction or dissatisfaction in his mind.  That overall satisfaction is important to the strategy of the company and will ultimately affect long term decisions. But does it help the restaurant serve customers better right now?  The answer is usually “no”. Mystery shopper studies help management understand what happens when their front office staffs interact with their customers. This provides real time experiences which management can immediately address.

On the other hand, Customer satisfaction studies reveal how customers feel about service they experience from their supplier. They do not reveal why? Customer service measurement reveals the “why” that stimulates continuous improvement. Essentially, satisfaction studies report perceptions and service studies report performance.  If a satisfaction study revealed that customers thought food service was slow in a chain of restaurants, valuable information has been gleaned.  Acting on this information alone would be impractical.   Would the chain simply ask employees to work faster? Would it risk serving undercooked food for the sake of quick service? Would it redesign its units to receive food orders more quickly?  Of course not.  

The chain would drill down deeper into the data to determine the root cause, the “why”. The chain would measure the speed of customer service it provides, likely using mystery shoppers to take those measurements.  If a subsequent mystery shopper study revealed that table-service customers were waiting an average of 10 minutes to receive their bills, a specific reason for customers to perceive slow service has been isolated.  Causes for the delay can now be investigated.  Causes might include slow credit card authorizations, understaffing, a backlog waiting for a manager approval, or lack of staff training to use computers.  

Mystery shopping studies help management understand what happens when their front office staffs interact with their customers. This provides real time experiences which management can immediately address. However, customer satisfaction surveys can be used to gauge and establish a service level index (SLI) for the company, which will then be tracked using Mystery Shoppers. Both studies are very important tools for effectively measuring how customers perceive your business.