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.
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.