The Great Customer Satisfaction Con
Debra Hall - Market Research Society of New Zealand, 2001 conference
How does the Integration of Research with Technology and Marketing contribute to a Converging World?
The convergence of market research with marketing, and marketing with management, is leading to questions being asked about some of the basis tenets which market researchers hold dear (and on which researchers earn a great deal of revenue).
The Great Customer Satisfaction Con is about how the research industry (aided and abetted more recently by the CRM industry) continues to make money from customer satisfaction surveys, all the while based on the flawed belief that satisfied customers will stay and dissatisfied customers will leave.
The reality is that people do not always do what makes them happy – and so, inevitably, satisfied customers do not always stay, and dissatisfied customers do not always leave – and the thinking has moved on as managers and marketers start to question whether driving customer satisfaction is, in fact, a cost effective long term strategy for company profitability.
As we’ve moved through a decade or more focusing on customer satisfaction, service levels have indeed improved (and in some industries, fallen again). The cost of providing ‘excellent customer service’ has increased, as industry benchmarks have risen, and every competitor is setting higher benchmarks each year – chasing their tails in an effort to have more satisfied customers than their competitors.
Yet large companies (and sometimes even the most profitable companies) tend to have the lowest levels of customer satisfaction, not the highest ones!
In the converging world, market researchers are increasingly being asked to explain why this is so - and given that it is, why we continue to recommend that clients measure customer satisfaction. Even in the non-commercial world – where public sector organisations have readily hooked into the annual ‘resident satisfaction survey’, we are starting to see the approach questioned, as the cost of delivering every increasing levels of service rises, and the public becomes increasingly resistant to rises in rates or taxes.
This paper looks at a series of case studies – from both New Zealand and overseas – drawn from client studies here in New Zealand (with client permission) and published material from other countries.
Debra discusses where satisfaction fits in predicting future consumer behaviour, and how it can be effectively used to motivate staff – a convergence of market research with human resource management.
By understanding what influences future consumer behaviour, and who in the organisation is responsible for each of these factors, market research can be effectively integrated into the strategic planning for the company, rather than simply providing measures which go up and down, in response not only to what the client does, but often at the mercy of competitor activities.
Debra shows how customer satisfaction measures can – and MUST – be integrated into a wider research plan – focusing on management rather than just marketing, on value trade-offs rather than ever rising service standards.
This paper challenges the comfort levels of those who make their living churning out customer satisfaction indices, and urging their clients that they must act to increase customer satisfaction levels.
Click here for a PDF of this Conference Paper:
Don't have an Adobe reader? Visit Adobe for a free downloadable reader: 