Learning from Employee Surveys

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Employee satisfaction surveys can be an eye-opening source of information for managers and business owners. Employees have a unique perspective on how a business works. In a sense, they are the ones who are closest to the action. They perform the day-to-day tasks and often have more contact with customers than anyone in management. They can offer valuable insights into what’s working well, what isn’t, and what can be done to make a business more efficient and profitable. All you have to do is ask.

First Things First
Before you decide to conduct an employee survey, you need to be prepared to do two things.
First, you need to be willing to accept criticism. It is inevitable that some employees will make negative comments about the business. It’s easy to dismiss their statements as sour grapes and focus instead on the nice things people say. But negative comments are an excellent source of information about potential problems. Even if you believe these comments represent unjustified criticism, you can learn a lot from them about employee satisfaction.

Second, you need to be prepared to act on the results of the survey. You shouldn’t ask for employees’ opinions about an issue if you don’t intend to do anything about it. One of the main reasons that employees are reluctant to take part in surveys is that they feel their opinions have been ignored in the past.

How Important Is Confidentiality?
Should your survey be confidential? It depends on what you hope to accomplish. Employers sometimes conduct focus groups to get a general sense of what employees think about a particular issue. Employees have no expectation of confidentiality in these sessions, so they are most appropriate if you are dealing with an issue that people are comfortable discussing. On the other hand, if you really want to know how employees feel about sensitive issues that are close to their hearts, your survey must be confidential.

If you decide to take this route, make sure that employees know the survey is confidential. Then stick to your promise and make no attempt to discover who said what on the survey. Be careful not to include questions that can indirectly identify respondents, such as, “How long have you been in your present position?”

The Online Advantage
There are several advantages to conducting an employee survey online. It’s easier and less expensive to prepare and distribute the survey. Many employees find it faster and more efficient to complete a survey online. And the results of an online survey are easier to compile and analyze. Companies such as Mineful offer templates and sample questions that make online surveys even easier.

What to Ask
Employee satisfaction surveys typically focus on these areas:

  • Employee compensation
  • Health benefits
  • Having adequate resources to work effectively
  • Retirement benefits
  • Opportunities for professional growth
  • Communication with management and other staff members

In creating your survey, you may decide to devote special attention to areas that seem to be “hot button issues” for many employees.

Additional Benefits
Employee satisfaction surveys can contribute to employee retention because they allow you to learn what employees care about. Job satisfaction means different things to different people. Surveys can help you discover what you can do to boost morale and make employees more satisfied with their work. Just the fact that you are taking the trouble to conduct a survey is an indication to employees that you value them and their contributions to the business.

Surveys can also be a source of valuable suggestions. By asking some open-ended questions, you can give employees a direct channel to management that they can use to propose new ideas for the business.

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Business Analytics, Not Just for the Big Players

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Business analytics are turbocharging the engine of business intelligence. Traditionally, business intelligence involved collecting data and using it to answer some simple questions:

  • What’s happening in the business?
  • What’s working well?
  • What problems are we having?
Business analytics go a few steps further. Using statistical business analysis, they answer questions like:

  • Why are these things happening?
  • Where are these trends headed?
  • What are the likely results of our actions?

The answers to these questions can help guide decisions about everything from manufacturing to marketing.

Changing the Odds
The gaming industry offers a good example of how business analytics can turn the odds in a company’s favor. The big casinos collect data about customers from many sources on the casino floor itself. Player cards and slot machines are just a couple of examples. They also conduct surveys and gather data from call centers and online reservation systems. Harrah’s, which operates 26 casinos in 13 states, decided to use business analytics to put their data to work.

First the company used its player card system to discover who its best customers were. It found that 26% of gamblers generated 82% of revenue. It also found that these folks were not the typical “high rollers” that casinos have always courted. Instead they were people who spent modest amounts of money on a regular basis.

Then the company conducted some experiments, using business analytics, to determine what would motivate their best customers to spend more. It found that free chips worked better than free rooms or meals to prompt more spending. This surprised some company executives, who assumed that “comping” meals and rooms was the best way to increase gambling revenue. The company took this experiment one step further, using business analytics to design a three-tiered rewards program based on customer spending.

Harrah’s has had sixteen straight quarters of revenue growth, and company executives believe that business analytics are one of the main reasons for this success.

Business Analytics Become Affordable
At first business analytics were used mainly by large corporations that had the expertise and the budgets to make major investments in these powerful tools. Now, companies like Mineful are making analytical engines widely available to small and medium-size businesses as well.

Basically, analytics allow a business to use its data in new ways. For example, a chain of donut shops could use analytics to predict how opening an hour earlier would affect sales. A hotel chain could use analytics to predict how occupancy rates would be affected by offering a free breakfast. A home improvement store could apply analytics to survey results to determine why sales of appliances have declined.

Effective use of business analytics requires careful planning of the whole process, including:

  • What data to collect.
  • How to collect it.
  • What questions to ask about the data.
  • How to use the answers.

A well-planned effort in business analytics can generate a large return on a relatively small investment.

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What is the key to keep customers coming back?

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It's one of the most basic laws of marketing: Your best source of additional business is your existing customers. But how do you keep them coming back? The key is customer satisfaction.

Marketers have always recognized the importance of customer satisfaction, but in the past it was a fuzzy concept, hard to measure and analyze. Fortunately, retail marketing software and analytics have made satisfaction metrics widely available to businesses large and small.
What marketers are finding is not surprising: There is a direct correlation between customer satisfaction and repeat business. In addition, satisfied customers come back more often and a more likely to move up to more expensive product offerings.

Measuring Satisfaction
The first step in measuring customer satisfaction is to create a survey. Drawing on your business knowledge and business analytics, develop a list of questions that address customer concerns. Customer satisfaction surveys typically use Likert-scale questions. Responses to a Likert-scale question typically range from "strongly disagree" to "strongly agree". For example, customers might be asked how strongly they agree or disagree with a statement like this: "The restrooms at Bob's Burgers are well-maintained."

Once you have surveyed a significant number of customers, you need to decide what do with your data. Survey responses will tell you what customers think about a range of specific issues, but how can you get a broader sense of what customer satisfaction means for you? A statistical tool called factor analysis can help you see the big picture.

Basically, factor analysis reveals relationships between survey questions, so that instead of considering thirty different specific issues, you can focus on four or five common themes. By grouping questions, factor analysis lets you see how specific issues come together to form a pattern. For example, factor analysis might group five questions that are all related to your facilities. If most people strongly disagree that you have adequate parking and they strongly disagree that your facilities are convenient, then you can get a sense of how you can improve customer satisfaction — expand your parking lot. This is an oversimplified example. A real factor analysis can give you a valuable picture of your strengths and weaknesses in terms of customer satisfaction.

The Big Picture
One widely used template for grouping responses to customer satisfaction surveys is the RATER model, which includes the following factors:


  • Reliability. The ability to deliver products or services consistently and accurately.

  • Assurance. The ability to inspire trust and confidence through the knowledge and competence of your staff.

  • Tangibles. The cleanliness and attractiveness of your store or offices.

  • Empathy. The care and attention customers receive.

  • Responsiveness. The willingness to provide prompt, efficient service.

These factors will have different meanings in different types of business. For example, in an online business, “Tangibles” are the appearance and ease of use of your website.

The relative importance of these factors will also vary from one business to another. For example, “Assurance” would be less important than “Tangibles” to customers of a coffee shop. In an attorney’s office, however, “Assurance” would probably be at the top of the list for most customers.

Understanding where you stand on each of these factors, and how these factors are related, is the first step toward improving customer satisfaction.

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Measuring Product Involvement

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What is product involvement? Marketers have come up with a variety of definitions for this concept, but basically it comes down to this: product involvement is a measure of a customer’s interest in a particular type of product and commitment to a particular brand.

Let’s say you love motorcycles, especially Harleys. You wouldn’t even consider buying a different brand. Obviously you have a high product involvement. (Someone once said that Harley-Davidson is the only brand that inspires so much product involvement that millions of people are willing to have the company logo tattooed on their bodies.)

In general, the more expensive the product, the greater degree of product involvement. People will spend a lot of time researching different makes of cars. They may even consider the car they choose a part of their self-image. Compare this sort of involvement with the attitude most people have toward something less expensive, for example, paper towels. Most people don’t care very much about paper towels, and they have little brand loyalty. They might not even know the name of the brand they usually buy.

Still, there are some inexpensive products that inspire a high degree of product involvement — for example, shampoo. Some women are very concerned about the appearance of their hair. They may have a strong commitment to a certain brand of shampoo because they feel it makes their hair particularly soft and shiny. (Men, on the other hand, typically don’t have much product involvement with shampoo.)

Whether a consumer is buying shampoo or a motor cycle, there is a strong relationship between brand loyalty and how important the product is to the customer. The more a consumer cares about a particular type of product, the more loyal the consumer is likely to be to a particular brand.

Measuring Product Involvement
A simple product questionnaire can be an effective way of measuring product involvement. One question might ask how important a particular type of product is to the respondent on a scale of 1 to 10. A second question might ask how loyal the respondent feels to a particular brand. If most people feel that a product is very important but they feel little brand loyalty, this situation represents a real opportunity for a marketer. With the right message, a marketer can take advantage of this situation to build brand loyalty.

On the other hand, if a survey reveals that most people feel a particular product is not very important, it would probably be a waste of money to try build brand loyalty. Most people don’t feel strongly enough about the product to care which brand they buy.

It’s important to remember that product involvement is different from product evaluation. Respondents might rate a brand highly on an evaluation, but if the product is not important to them they will probably not have much brand loyalty.

Predicting Product Involvement with New Products
New product surveys can help marketers predict what sort of involvement a new product might create. The key here is to ask questions about similar products that a respondent might already be familiar with. For example, suppose you were going to introduce a new line of organic snack foods. Your survey might ask how important people consider snack foods and how important they consider organic foods in general. These questions will help you forecast the potential level of interest in your product, and its potential for building brand loyalty.
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