If you have read the first part of our series of articles on Market Research — What is Market Research — you would know how there is an inconsistency in the understanding and scope of market research. In this second part of the series, we focus on one of the goals that market research can help you achieve — measuring and ensuring customer satisfaction.
Why measure customer satisfaction?
In a buyer’s market, it is important for businesses to be customer-centric. Ensuring customer satisfaction is the only way to ensure customer retention. While most companies take many measures to try and improve customer satisfaction, few try to understand what the customer really expects, and how the measures taken impact the customer sentiment. If you do not try to understand your customer, you will never know what the customer expects from you. Without this understanding, how can a business ensure customer satisfaction consistently?
While market research can provide a lot of insight into the customer, the next step is to analyze the data and get a measure of how satisfied your customers really are. Two of the most important reasons to measure customer satisfaction are:
A satisfied customer is a profitable customer: The chances of repeat business from a satisfied customer are significantly improved, reducing the cost of customer acquisition . Also, satisfied customers are most likely to refer you to others, acting as your business evangelists and bringing in more business.
- Measure of business performance: The success of a business is directly linked to its ability to delight, retain and grow the customer base. Even with a satisfied customer, if the satisfaction level is greater with a competitor, then there’s a threat of losing the customer. Measuring the level of customer satisfaction not only tells you if the customer is satisfied, but also how satisfied the customer really is.
Key elements of measuring customer satisfaction
If you have just a handful of customers, you could conceivably just ask them about their satisfaction levels and seek feedback on how you could serve them better. But this is not always possible. Before you use market research to measure customer satisfaction, you should be clear about the goals of the exercise and what you want to achieve. Understanding the key elements of measuring customer satisfaction can help you get this clarity. While measuring customer satisfaction, you should be able to:
- Identify attributes that are important to customers: This will provide insight into what you are doing right and areas that you can improve on. It will also tell you the customers’ pain points and help you take counter measures.
- Create and sustain a statistically valid metrics:You need to have a way to measure the results. Not just quantitatively, but also qualitatively. For instance, knowing that a customer rates you high isn’t good enough. You need to know whether the customer rates you 6, 7, 8, 9 or 10 on a scale of 1 to 10. The metrics for measurement that you set up need to be consistent and it should be possible to track them over a period of time.
- Baseline measurements: Things like the surveyed group, number of responses, number of positives, negatives and neutrals, etc., are baseline measurements for tracking your customer satisfaction levels.
- Comparative measurements: Rating points given by customers, changes in rating points, etc., are metrics that can help you track the shift in customer sentiment and satisfaction levels. The metrics you set up should allow you to track how the satisfaction levels changed, what was the statistical impact of the measures you took, which segment of the customer base was most impacted and how, etc.
- Obtain customer satisfaction data: Once you have set your metrics, you should then go about gathering data on the customer satisfaction levels. This can often be the tricky part. While doing market research on customer satisfaction levels, the key is in eliminating bias at all levels — setting the questionnaire, selecting the customer group, gathering of data, analysis, etc. Working with specialists in market research or customer satisfaction surveys can help you minimize and eliminate this bias to a great extent.
- Reveal where improvement is needed: Once the data is gathered, the next step is analysis of this data. Done in a professional and scientific manner, the data can reveal areas where each customer segment provides opportunities for improvement. At the end of this stage of the research, you should know which customers seek what improvement.
- Prioritize and execute corrective measures: Armed with the analysis of customer satisfaction levels, you can then decide which of the areas of improvement are more important to you, satisfying which customer group is a greater priority, etc. This can become the basis for creating strategies and counter measures to help improve customer satisfaction levels in areas that are deemed to be most important to your business.
None of this can be done in a scientific, data-driven manner without first being able to measure the relative level of customer satisfaction. Most businesses focus on improving customer delight through internal brainstorming, offers, etc. However, the smartest business goes the extra mile — by investing the time and effort necessary to understand customer sentiment and analyze the level of relative customer satisfaction. Trying to improve customer satisfaction by providing what matters most to the customers eliminates the uncertainty and ensures consistent results.
Customer Satisfaction Research from HMS
Professionally analyzing your customer satisfaction levels can help your business develop products and services that the target the needs and expectations of your most important customer segments. Scientifically measuring customer satisfaction levels is a specialization — and an area in which Hudson Management Services (HMS) has many years’ experience and expertise.
Our experienced team of marketing and research analysts will provide relevant results to help you assess the specific needs of your market and customer base.