Simply measuring customer satisfaction is not enough

Howard Firestone, Our V.P. Marketing and Communications posted a blog a while back Peppers & Rogers: They get it! … And he is right… they do get it!

A recent article, Customer Satisfaction Now, Long-term Value Later written by Don Peppers, explains how measuring customer satisfaction on its own is not an indicator of how well a company is doing in building brand affinity and the lifetime value of its customers. Peppers explains:

“Look at the latest iteration of the American Consumer Satisfaction Index for example, administered quarterly by the University of Michigan business school. It is a well-researched and useful bellwether for consumer attitudes. However, it cannot by itself be taken as a predictive customer value model.”

We couldn’t agree more. That’s why it is so important to contextualize results found in customer satisfaction research. It is equally important to look at how willing customers are to recommend your brand and product, your company’s share of customer, and their lifetime value. These are the elements that show true customer focus. The ACSI index is a good metric in terms of understanding current customer sentiment, but is only one of many indicators.

Relying on overall customer satisfaction scores (or what we at iPerceptions call our Visitor Value Index) is only part of the equation. It’s important to understand the other elements as well that make up a person's experience with your company and brand, by listening to the voice of your customers on a consistent basis, and understanding the different voices coming from the crowd.

For example, a high profile lingerie company we work with found that an overall low satisfaction score on their website was the result of mainly low scores within one visitor group for the attributes related to the area of content (pictures, detail, and relevancy). Further investigation revealed that this group, when segmented from the rest of the respondents, were men between the ages of 18 and 35. The point is that if this client only looked at overall satisfaction as a measure to drive improvement, they would have been applying strategies based on the perceptions of guys who wanted to see bigger pictures of bigger….

Understand how many voices are coming from the crowd.
Understand the relevance of these various voices.
Understand the impact they are having on your goals and objectives.
Understand that overall satisfaction is only showing you part of the picture.