Customer Satisfaction Research

Customer satisfaction research focusses on customers’ perceptions of their experiences with the products and services of a company, to determine their level of satisfaction. Its primary purpose is to empower management to take measures to improve customer retention. 

Applications

Customer satisfaction research empowers top management to align their organization to better serve the needs of their customers. It helps them prioritize resources and initiatives in products, services and people development.

Competition benchmarks are of vital importance in interpreting study finding. Dashboards that benchmark performance on key metrics, vis-à-vis major competitors, reveal the areas where the company outperforms as well as those where it lags behind.

Customer retention, as mentioned earlier, is the prime objective. In addition to aligning the organization to better serve customers in general, customer satisfaction research emphasizes the importance of each individual customer. The act of surveying serves as a useful communications and public relations medium. Engaging individually with customers through the research, and subsequently following up with them on problem areas, should strengthen customer relationships. It should help resolve problems faster and more effectively.

Customer feedback can motivate and guide employees to better serve their customers. It is usually linked with employee compensation and management incentives, particularly for organizations with a network of sales offices, branches or stores. These reward schemes work best in conjunction with other performance indicators such as revenue and profit targets.

Derek Allen (2004) aptly describes the relationship between Customer Relationship Management (CRM) and Customer Satisfaction Management (CSM) as “symbiotic”. CRM systems record internal measures such as transactions and describe behaviours. It takes customer satisfaction data to “reveal why CRM predictor variables affect CRM outcome variables”.

Methodology

Customer satisfaction research services are provided by a number of leading market research companies including Kantar, Market Probe, Ipsos, Nielsen, GfK and JD Power. Consolidation within the industry has helped streamline the offerings. Kantar for instance owns three research houses (TNS, Millward Brown and Research International), each once offering its version of customer satisfaction research solution. Today TRI*M by TNS is the solution promoted by the group. Ipsos’ solution is called Loyalty Satisfactor, and Nielsen’s brand is eQ (Equity Management System).

The key elements in most of these solutions include measures for loyalty (e.g., eQ, Index, TRI*M index), customer segmentation and driver analysis (importance measures).

Traditionally there are two types of customer satisfaction surveys — transaction and relationship. A broad understanding of these surveys should provide for a good appreciation of how customer satisfaction research works.