Prairie Trail Logo

Views from the Prairie

March 12

Measuring Customer Satisfaction

Do you want more income? If so, find out more about what your customers really want. Business advisor after business advisor tell us to find out what our customers want. Yet, few businesses do that well. There are ways to better measure what your customers want.

One of the most commonly mentioned method is to do a customer satisfaction survey. Most "customer surveys" were designed to find problems. They ask questions to make sure that the customer isn't going away angry because of some easily measured defect. However, that does not give you the reasons why a potential customer decides that you are "just not the people she wants to do business with".

Most of us have had the experience of dealing with a "customer satisfaction survey" after visiting a retail establishment. But so often, these surveys do a bad job of measuring real customer satisfaction. One bank's "customer survey" can take longer to fill out than it takes to go in and do a transaction.

The new president for North America of Office Depot was wondering why "Our sales had been declining, [and] they had declined faster than the sales of our competitors." "At the same time, the customer service scores that our third party mystery-shopper service was reporting were going through the roof." He found out that their "customer surveys" were asking all the wrong questions. While the stores were working to meet the criteria listed, the customers were walking out of the stores without buying anything. (Reported by Harvard Business Review)

The book, The Coming Jobs War by Jim Clifton, lays out the criteria for measuring customer satisfaction. These questions come from Gallup's attempts to find out what makes for great companies. Some of the questions he suggests are:

Taking into account all the products and services you receive from them, how satisfied are you with the company overall?

How likely are you to recommend the company to someone else?

Is the company one that you can trust?

If a problem arises, I can count on the company to reach a fair and satisfactory solution?

He also lists the criteria for business to business customer satisfaction.

Customers have their own opinions of your company. In the case histories of companies in trouble, invariably, the issue is that the employees gave customers good reasons to go elsewhere. The critical link with the customer is the employee. While we can blame the employee when things go wrong, the real issue is how managers handle problems and correct issues.

It is not enough just to offer a product that people want. There is enough competition out there that we need to make people want to do business with us. We start by making our companies places that employees want to work.

Business Models Changing

JC Penny is changing its business model. They are switching to regular pricing and hope to not have to offer constant discounts. Other companies are making deep changes to their offerings to meet new market expectations. Are your business models changing, too?

The hardest part of success is when the market changes under us. Take Oracle for example. Its (very successful) business model is about charging a lot for the database software and a bunch for the annual maintenance contract. That is why few web start up companies use Oracle and instead, use one of the (many) free to low cost alternatives. Now with competitors offering solutions on "the cloud", Oracle is losing customers. Oracle does not currently have a "cloud" solution" but is actively buying companies and technologies to offer one.

To remain competitive, it is a constant challenge to explore and discover what business model will work this year. When technology shifts happen, it is vital to ask what impact that shift will have on the business and what opportunities could be opening up.

Unfortunately, most successful companies are culturally unable to take advantage of such shifts, (see Kodak for example). Success was "stay the course". Now, it is "radically change".

One winning strategy is to break up the company into many small companies that can experiment, new ideas can be tested and the proven winning ideas passed on to the rest. Richard Branson does that with the Virgin companies.

No matter what the current business model is, the next ten years will see major changes. Making a flexible organization offers more hope of handling those changes.

Risky World

Recently, people have started looking at the Internet traffic generated by spam, viruses and worms as a way to test the well being of the Internet. The researchers were able to detect censorship actions of governments and when Egypt took down the Internet. They are using bad traffic to find information.


This newsletter is posted here as well as sent via mail and email. If you wish to receive updates, please sign up above.

Recent Issues

  1. Jan12.html
  2. Feb12.html

Prior Years

  1. 2008
  2. 2009
  3. 2010
  4. 2011