...Best Practices in Measuring Customer Satisfaction Lynette Diaz Devry University INTRODUCTION How do you know if your customers are satisfied? Are they more pleased with your company this year than they were last year? How does customer satisfaction of your customers compare that of your competitors? Does this affect your company’s profits? In order to answer these questions, you need hard data. You can do this by measuring and monitoring customer satisfaction on a regular basis. Customer satisfaction is linked to profitability. Keeping your customers happy will keep them loyal and if they are loyal they will buy more and refer your company to other customers. “Customer satisfaction is one of the strongest indicators of customer loyalty” (Lean Consulting Inc.) A study has shown the connection between a company’s profits and customer satisfaction. * “It’s six to seven times more expensive to gain a new customer than it is to retain an existing customer.” * “A 5% increase in customer retention can increase profits by 25% to 95%.” (Reichheld, 1993) There are many different practices to measuring customer satisfaction. Some of the best practices used are comment cards and formal surveys, focus groups, direct customer contact, field intelligence, studying complaints, and monitoring the internet. Depending on the industry, some work better than others. Customer cards and surveys work better in the retail industry. They can work well in finding out how each...
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...Best Practices for Measuring Customer Satisfaction Customer satisfaction is perhaps one of the most talked about challenges of organizations in the public and private sectors. Indeed, this represents every organization’s sole purpose, and is at the heart of every organizations mission statement. It is seen as a key differentiator and increasingly has become a key element of business strategy. Customer satisfaction is tied directly to profitability. “Customer wants and needs drive competitive advantage, and statistics show that growth in market share is strongly correlated with customer satisfaction.”(Evans, 2010). If your customers are happy, they tend to be loyal. And if they’re loyal they not only buy more, they refer other customers. It is critical to give customers the opportunity to provide feedback about their overall satisfaction level and specific likes and dislikes. A company will lose business, miss growth opportunities, and put itself at a competitive disadvantage without an effective customer satisfaction research program in place. Therefore, it is very important to the success of the business to know right away if they are doing something that frustrates or dissatisfies the customers. According to Evans & Lindsey (2009) in Managing Quality, “To create satisfied customers, the organization needs to identify customers’ needs, design the production and service systems to meet those needs, and measure the results as the basis for improvement” (pg. 190). A customer...
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...BEST PRACTICES IN MEASURING CUSTOMER SATISFACTION Case Study: Comcast Corporation GM588: Managing Quality INTRODUCTION In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy. It is critical to give customers the opportunity to provide feedback about their overall satisfaction level and specific likes and dislikes. It is equally important to consistently measure and monitor that input. Without an effective customer satisfaction research program in place, a company will lose business, missing opportunities, and putting itself at a competitive disadvantage. “Customer wants and needs drive competitive advantage, and statistics show that growth in market share is strongly correlated with customer satisfaction.”(Evans, 2010) An outstanding customer experience creates promoters, and promoters are more valuable to a company than other customers. Customer satisfaction is tied directly to profitability. If your customers are happy, they tend to be loyal. And if they’re loyal they not only buy more, they refer other customers. Well-established research by Bain & Company found that, for many companies, “an increase of 5% in customer retention can increase profits by 25% to 95%” (Bain, 2000). The same study found that it costs six to seven times more to gain a new customer than to keep an existing one. Moreover, one bad...
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...This is a best practice in the measurement of customer satisfaction courtesy of CDW, one of America’s largest private companies with technology sales of more than eight billion dollars in its most recent fiscal year. CDW had been using Net Promoter to measure customer satisfaction and brand health. You get a Net Promoter Score by asking one question of your customers—How likely is it that you would recommend your company to a friend or colleague?—and then grouping the responses by promoters (those who answer the question with a 9 or 10), passives (7-8), and detractors (0-6). You subtract the percentage of detractors from the percentage of promoters to get your Net Promoter score. This has been a leading edge measure for many companies because it helps them identify opportunities to improve customer satisfaction. CDW decided that Net Promoter was too one-dimensional so, with the help of the person who developed Net Promoter, it went to a three-question approach that, according to Calvin Vass, CDW’s senior manager of research, looks at “different dimensions of the relationship; what the customer plans to purchase with us, if they are committed, and what they would do if we went away.” Vass is quoted in “Is Net Promoter Really the Ultimate Question?” by Drew Neisser (Fast Company, October 20, 2010). CDW segments its market into two groups, Active Customers and Less Active Customers. It surveys the first group quarterly, receiving more than 100,000 surveys per year. It surveys...
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...3 PAPER MEASURING CUSTOMER SATISFACTION TO purchase this tutorial visit following link: http://wiseamerican.us/product/bsop-588-week-3-paper-measuring-customer-satisfaction-2/ Contact us at: SUPPORT@WISEAMERICAN.US BSOP 588 WEEK 3 PAPER MEASURING CUSTOMER SATISFACTION Research the text, library, and web sources for the best practices in measuring customer satisfaction. In a 2-3 page paper ( excluding cover and reference page), explain your findings and link them to your current organizations practices for measuring customer satisfaction. Identify whether your company direction meets or exceeds what the best practices advocate. Make sure you provide at least three supporting sources. BSOP 588 WEEK 3 PAPER MEASURING CUSTOMER SATISFACTION Research the text, library, and web sources for the best practices in measuring customer satisfaction. In a 2-3 page paper ( excluding cover and reference page), explain your findings and link them to your current organizations practices for measuring customer satisfaction. Identify whether your company direction meets or exceeds what the best practices advocate. Make sure you provide at least three supporting sources. BSOP 588 WEEK 3 PAPER MEASURING CUSTOMER SATISFACTION Research the text, library, and web sources for the best practices in measuring customer satisfaction. In a 2-3 page paper ( excluding cover and reference page), explain your findings and link them to your current organizations practices for measuring customer satisfaction...
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...Best Practices for Measuring Customer Satisfaction Introduction The measuring of customer satisfaction is complex within itself let alone deciding on and debating about the best practices for measuring the concept. However, measuring and analyzing customer satisfaction can help a business not only keep its customers, but provide valuable insights into how to attract new customers. Customer satisfaction is important in that it drives repeat business, even if there is a lower price on offer from another competitor, existing customers are more likely to try new products from their preferred seller, and it is less expensive to retain existing customers than to retain new ones. During the process of my observation, I have analyzed these best practices applied for measuring customer satisfaction in the current market, in which will be outlined within this research piece. Identification of Best Practices The most popular and common approach for measuring customer satisfaction includes conducting surveys. There are a number of ways to communicate with consumers with regards to carrying out surveys. You may reach your customers to complete a satisfaction survey via outbound phone, which is easy to complete and results in a strong response rate. However, this type of survey method can become expensive. Completing satisfaction surveys from customers via inbound phone results in an immediate response, a good response rate, and is inexpensive. Conduction customer satisfaction surveys...
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...HEAD: BEST PRACTICES IN CUSTOMER SATISFACTION MEASUREMENT Customer Satisfaction Measurement Best Practices Devry University Keller Graduate School Of Management Managing Quality 09/21/2012 Customer satisfaction is the state of mind that customers have about a company when their expectations have been met or exceeded over the lifetime of the product or service. The achievement of customer satisfaction leads to company loyalty and product repurchase. Customer satisfaction is very important in all types of business operations and the best practices that deliver such a satisfaction are the tools that lead to the best results and gains that many firm and companies enjoy at the end of the quest. The best practices in customer service are the engine of the company future and this does reflect in the culture of the company and how it handles the most important factor in its look for best results and shines the road for the competitive leadership awards. Being able to understand the satisfaction level of customer can make the fine lines between loss and profit. Top managers and responsible executives need to assess the importance of understanding if their customers are still satisfied with their products and services as they were last year or last quarter. They also need to know how that level of satisfaction can affect the profits of the firm or company and if those changes in the satisfaction level...
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...Best practices for measuring customer satisfaction? Is it upper level management, hired consultants, surveys, or reactions to industry swing? So many choices but what really is a best practice. Customer satisfaction programs, research, employee satisfaction, and personal experience all play a role in measuring customer satisfaction. Even when using those practices it takes effort and continuous improvement to stand a chance on improving customer engagement and satisfaction. Hopefully these next few paragraphs can add some insight on measuring results. The problem companies face, is exactly how to and do it well. Companies need to understand how to quantify, measure and track customer satisfaction. Without a clear and accurate sense of what needs to be measured and how to collect, analyze and use the data as a major strategic focus to achieve business success, no firm can be effective in satisfying customer to drive business. Plans must be constructed using customer satisfaction research results and design a strategy that target customers and/or processes that add to the bottom line. The last thing a company should do is not take action, there is collateral damage in asking (resources and time) customers about a service or product if it won't or can't be changed. What are some of the ways to measure customer satisfaction. One used quite frequently because of the associated low cost is using outdated and unreliable measures of customer satisfaction. The data is...
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... Introduction Customer satisfaction is vital to any business, big or small. It is one of the distinct gauges of customer loyalty. No company exists without customers and it is very important to keep customers satisfied to have a chance to gain their loyalty. There are several ways a business can keep their customers loyal to their company and measuring and analyzing customer satisfaction can help them accomplish that but also gain knowledge on how to acquire more loyal customers. Customer loyalty is important because it drives repeat business, even if there is a lower price on offer from competitor. Loyal customers come back more often to take up cross sell opportunities and are more likely to try new products from their preferred supplier. Loyal customers are more likely to recommend a business’s services. Profit tends to increase over the life of the retained customer. It can be twenty times more expensive to acquire new customers than retaining existing customers. To accomplish this, successful businesses uses customer satisfaction data to be able to compare internal quality monitoring programs to ensure internal measures match out p actual customer sentiment. It can be benchmarked against other similar companies to determine the level of business competitiveness. It can also be used to set performance targets to outsource suppliers. Help identify areas for improvement. In all these measurements there are negative feedbacks that create a customer dissatisfaction reports...
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...Measuring Customer Satisfaction Introduction Customer satisfaction measures how well a company's products or services meet or exceed customer expectations. These expectations often reflect many aspects of the company's business activities including the actual product, service, company, and how the company operates in the global environment. Customer satisfaction measures are an overall emotional evaluation that is based on the customer's lifetime of product and service experience. In today’s world customer satisfaction is very important in order to continue to have a business because with no customers there is no business. Identification of best practices There are several means for measuring customer satisfaction including surveys, focus groups, complaint analysis and user groups. The most common used is surveys as it is the only way to get customer feedback unless they contact you, which most people are too busy to bother with unless they are extremely upset for some reason. Surveys can be provided in several way through mail, email or over the phone and the best way to get information is to allow customers to answer questions on a weighted scale for example on a scale of 1 to 5 with 1 being dissatisfied and 5 being satisfied. Types of industries All industries can utilize these best practices that have customers such as retail, manufacturing and service industries. According to the text, in 1994, the University of Michigan Business School...
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...investigate the application of measuring customer satisfaction and to demonstrate how colleges and university can enhance their existing processes for measuring the student satisfaction of their service provision. The basic goal of customer satisfaction measurement is objective quantification of subjective perception of consumers. The findings of customer satisfaction study can provide information on how to retain existing customers and attract new one. Customer satisfaction is tied directly to profitability. If your customers are happy, they tend to be loyal. And if they’re loyal they not only buy more, they refer other customers. Well-established research by Bain & Company found that, for many companies, an increase of 5% in customer retention can increase profits by 25% to 95%. The same study found that it costs six to seven times more to gain a new customer than to keep an existing one. Customer satisfaction is the state of mind that customers have about a company when their expectations have been met or exceeded over the lifetime of the product or service. The achievement of customer satisfaction leads to company loyalty and product repurchase. Identification of Best Practices Today, competition is fierce, and customers have more options than ever -- a tough combination for smaller companies trying to gain market share. The Net Promoter score is identified as one of the best practices when it comes to measuring customer satisfaction. According to (Brown 2010)...
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...Measuring Customer Satisfaction Introduction In order to have a successful business, there must be customers. Customers are considered those who obtain goods or services. Clients may be viewed as those who seek professional advice or guidance. Those who acquire, or agree to acquire, ownership (in case of goods), or benefit or usage (in case of services), in exchange for money or other consideration under a contract of sale are buyers or purchasers (Business Dictionary Definitions, 2011). However businesses view themselves as having customers, clients, buyers, or purchasers, it is important for them to recognize who they are and what it takes to keep them. Years ago the idea was that satisfied customers had a huge impact on the success or performance of the company. Most researchers defined customer satisfaction in terms of how well the company’s goods or services does compared to the expectations of the customer. Some even view customer satisfaction as a characteristic of a total quality culture in an organization. Studies have found that companies who have a higher percentage rate of keeping their customers are more profitable than those with a lesser percentage rate. Identification of Best Practices Per Evans & Lindsey (2009) in Managing Quality, “To create satisfied customers, the organization needs to identify customers’ needs, design the production and service systems to meet those needs, and measure the results as the basis for improvement” (pg. 190). Likewise...
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...Customer Satisfaction: Best Practices Customer Satisfaction is the most prominent factor in the success of a company. It is what puts the wheels in motion for a company to establish a strong foundation while simultaneously fulfilling it’s overall purpose to offer the goods and services that it is designed to provide. Consequently; in order to maintain that status and to provide valued goods or services to those customers in which any company is marketing to, it has to understand the customers needs and more specifically what provides the customer with complete satisfaction. Understanding the customer’s needs and what they require in order to be satisfied, opens up doors and provides the company with the opportunity to generate financial growth, repeat business, and a competitive advantage. In doing so, research has indicated that the best practices to measuring customer satisfaction; is to assess the goals that a company expects to deliver and identify the targeted customer, like: the existing, former, potential, or internal customers. Once a company identifies what their targeted goal is and who the targeted audience may be it is imperative that they then seek input from the customer by asking the customer for feedback. The Voice of the Customer (VOC), (Evans & Lindsay, 2011) is the “customer requirements, as expressed in the customer’s own terms (p. 201).” To develop a clear understanding of what a customer requires in their own terms, companies have been using...
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...Best Practices in Customer Satisfaction Best Practices in Customer Satisfaction With quality management philosophies that are considered customer-centric such as Kaizen and the Deming Total Quality Management (TQM), quality cannot be reached without the “voice of the customer” (VOC) being heard. Satisfying internal and external customers is the root of quality. Companies that continuously strive for satisfaction with their clients use tools such as the Kano model of customer satisfaction or get ISO 9000 certified (Evans & Lindsay, 2010). Any industry that has been around for a while develops a set of “best practices,” processes that have proven themselves over time. This essay looks at some of methods used by companies to attain satisfaction, reasons for doing so, and how Maggiano’s restaurants incorporates them into their business. Customer and stakeholder satisfaction is the first of the three principles behind Deming’s’ TQM philosophy. Customer engagement and knowledge acquisition is one of the six major areas that most companies focus on when trying to implement quality with TQM. The first principle in ISO 9000 quality management is customer focus. The Baldridge concept of performance excellence states a need for processes to determine a customer’s needs as the first point to. With so many different quality practices putting customer satisfaction as a priority, it is obvious to see the importance of determining what the best methods are. Acquiring this knowledge...
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...competitive marketplace, customer satisfaction is tied directly to long- term profitability. Customers whose needs and requirements are not met will take their business elsewhere. If a customer is happy they tend to be loyal, and if loyalty is measured they not only buy more, they will recommend it to others. The best way to find out if your customer is satisfied is to ask them. With there being many measurement tools available, what’s the best way to track and measure customer satisfaction and how does this data interpret a realistic action plan? Identification of Best Practices Companies face challenges when they seek to identify, measure, and track customer satisfaction. Tools such as surveys, scorecards and questionnaires are increasingly popular since they help measure critical information available to a broad range of industries. A standard customer satisfaction survey asks participants to convey their opinions characterized by quality, price and service. To be useful, the information needs to be tangible so companies can implement improvements. The difficulty in creating a survey is typical low response rates, questions must be well written, and questions need to target the issues. On the other hand they are quick, relatively inexpensive, and there is a large sample size. Customer satisfaction scorecards measure where a company stands in the eyes of its customers, thereby enabling service and product improvements which will lead to higher satisfaction levels. Advantages...
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