This article first appeared in the August, 2006 edition of the Jacksonville Business Journal
Companies often use the term customer service and customer satisfaction interchangeably, but they are very different.
Customer service is what an organization provides to its customers and is relatively easy to measure. Typical measures include response time, time required to provide service, ability to address a customer's issues on the first call, procedures for handling customer complaints or returns, etc. Customer service is important and companies should examine all the ways in which they touch their customer, the service they provide, and their measures to continuously improve that service.
Customer satisfaction, on the other hand, is how the customer feels about the service they receive and the company that provided it. This is your customer's perception and emotional response, and. you have no direct control over it. It is harder to measure and even harder to improve.
The only way to get a true assessment of satisfaction is to ask the customer. This is best done through independent parties employing customer surveys. When designed well and conducted honestly customer surveys are a very valuable tool. Unfortunately, they are often manipulated by company managers who are under pressure to deliver a prescribed level of customer satisfaction. The classic example of a manipulative customer survey is what is currently given to passengers at the end of most cruises. The captain and senior staff bring the passengers into the auditorium on the last night, hype up the excellent job each of them has done, tell the passengers how critical their response is to their survey and that anything less than a 9 on a 10 point scale is considered bad. The expectations are pre-set and a combination of manipulation, coercion and guilt is used with the passengers. The purpose is not to get real feedback; it is to give their corporate management the scores that they have been required to achieve.
Most companies assume there is a direct relationship between customer service and customer satisfaction, which is often the case. But there is no guarantee that good customer service will create high customer satisfaction. Good technical service delivered with "an attitude" can leave a customer dissatisfied. Timely replacement of a defective product can be listed as good customer service, but the customer may still be unwilling to trust your company with future business.
The reverse is also true. Difficult situations can be converted into extraordinary customer satisfaction if the customer is handed with care and sensitivity. Some companies train employees in how to use poor service issues as an opportunity to turn a situation around and create a raving fan.
The ultimate measure of both customer service and customer satisfaction is customer loyalty. An excellent new book entitled "The Ultimate Question" by Fred Reichheld describes customer loyalty, how to measure it and how to achieve it. Reichheld suggests you ask customers two core questions: Would you do business with this company again, and would you recommend them to your friends? Strong "yes" responses to both questions define loyalty. Ask this question to a hundred of your customers. Take the total of all the yes responses, subtract the total of all the "no" responses and create your customer loyalty index.
To achieve customer loyalty a company must have a senior management team that genuinely wants to know and improve customer service and satisfaction with a sincere commitment to developing customer loyalty. This often requires a cultural change, and all the elements that create culture must be aligned. These include a powerful vision that is translated into specific goals for employees, support mechanisms to help achieve those goals, a measurement and monitoring system, and aligned reward and recognition systems. Employees cannot implement changes if they do not know what the consequences of their actions generate - they need to know how customers react and feel about what they are doing.
Finally, the organization must have a culture based on honesty, openness and trust. Feedback will only be delivered or received openly if there is no fear that the messenger will be killed.
Companies that drive short-term business results at the expense of their customers usually end up with matching short-term lives. Companies that delivery legendary customer service also enjoy legendary performance and legendary business results.
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