Customer satisfaction should be a core strategic outcome

Modern marketing is incredibly good at marketing itself. One of the biggest jokes in the 1952 book (turned Broadway musical) by Shepherd Mead “How to Succeed in Business Without Really Trying” is that the protagonist ends up failing because he became the firm’s Vice President of Advertising. This attitude towards advertising is longstanding, looking back to the 1800s, John Wanamaker entered the history books for saying “half the money I spend on advertising is wasted; the trouble is I don't know which half”.

Despite perception being in such an awful starting point, in just 6 short decades marketers and advertisers moved from being the butt of the joke, to being some of the most powerful individuals within their organisations. They are in the drivers seat of the world we live in; each brand our eyeballs cross paths with, each business we trade with, each product we take home - our entire commercial universe is crafted by a team of marketers and the agencies they employ.

As the environmental control that marketers have over individuals has grown, a new battleground between businesses matured. No longer are brands competing with one another simply based on products, services, features - those components have been absorbed into something higher level, and from this, the battleground of modern brands is now over the end to end experience a customer has when they are engaging with a business.

THE TOOLS WE USE TO GUIDE THE EXPERIENCE OF CUSTOMERS

CX as a marketing discipline, has grown so rapidly that in just 10 short years, it has shifted from a white-collar buzzword to earning a spot in the coveted C-suite as Chief Customer Officer.

The broad issue that has come off the back of such rapid growth, is that the tangible realisation of CX varies so greatly based on what an individual business or a service provider (consultancy, agency, etc) is capable and prepared to offer.

Engaging with a team tasked with delivering CX will generally result in a series of artefacts:

1. Journey maps

2. Experience gap analysis

3. Executional roadmaps

4. ETC

These are tangible deliverables (that are great, if not necessary to do) but, in my opinion, they are useless without being aligned with a core strategic goal.

As businesses relentlessly pursue revenue, the strategic goal is often looked at through the lens of improving revenue based metrics “how might we optimise new customer conversion” or “how might we acquire more customers” - but these goals are not aligned with the core purpose of customer experience:

Improve the experience your customers have with your brand.

If we look at CX through that optic, we should actually be looking at one metric and one metric alone: customer satisfaction (CSI) and the question we should be asking ourselves when undertaking a new initiative should be “will this make my customers happier?”

CUSTOMER SATISFACTION SHOULD BE THE CORE STRATEGIC OUTCOME

The business math behind pursuing customer satisfaction is clear:

HIGHER CSI = HIGHER LOYALTY = HIGHER REVENUE

But exploring the revenue component further shows that there is actually multiple dimensions at play beyond securing repeat purchases:

1. Firstly, and most obviously, improving customer loyalty will inherently positively impact revenue, extracting a higher customer lifetime value at minimal marginal cost

2. Secondly, the higher your customer satisfaction index, the more new customers will be willing to pay

3. Thirdly, the higher your customer satisfaction index, the more price elastic existing customers become

4. Finally, satisfied customers improve organic (IE free) incremental growth

Ultimately, the relentless pursuit of customer satisfaction proves to be a key point of difference, and when a brand has a powerful key differentiator, that differentiator ends up being a money printer.

EXAMPLES OF [current] HIGHLY SATISFYING BUSINESSES:

1. SuperCheap Auto (Aus)

2. Subway (Aus)

3. AustralianSuper (Aus)

4. Trader Joe’s (USA)

5. John Lewis (UK)

CUSTOMER DISSATISFACTION AND THE TAILSPIN THAT FOLLOWS

Neglecting customer satisfaction tracking is a costly oversight for companies, and that cost represents itself in several prolific ways:

1. Dissatisfied customers are likely to churn, leading to the loss of existing customers and the

2. Expenses associated with acquiring new customers increase

3. Dissatisfied customers damage a company's reputation

Businesses that don’t prioritise CSI also end up missing opportunities for upselling and cross-selling, limiting the revenue potential from each customer. This extends beyond the lens of the customer acquisition and loyalty, as internal satisfaction tracking also provides feedback facilitating operational inefficiencies and product shortcomings - leading to increased customer service demands, higher support costs, and decreased employee productivity.

EXAMPLES OF [current] HIGHLY DISSATISFYING BUSINESSES:

1. Qantas (Aus)

2. Harvey Norman (Aus)

3. Myer (Aus)

4. AOL (US)

5. Npower (UK)

A NO-NONSENSE APPROACH TO SATISFACTION TRACKING

Let’s examine how CSIs are usually determined:

One method:

“On a scale of 1 to 5, with 5 being the highest and 1 being the lowest, how would you describe your experience?”

Another method:

Translate the scoring into terms everyone understands. This type of survey asks you to describe your experience as:

“Extremely Satisfied” to “Extremely Dissatisfied.

But degrees of satisfaction… Do they ever mean anything?

And how often have you truly been “extremely satisfied” about anything?

If you purchase something and it’s everything you thought it was going to be, are you simply “satisfied,” or do you feel better than that? Are you “somewhat” satisfied or “extremely” satisfied?

The Perfect CSI survey is just two questions:

1. “Would you return to this company for future purchases?”

2. “Would you recommend this company to others?”OPTIONAL:

3. Adding a comment box to give customers an opportunity to note anything specific. Positive comments can then be the basis for effective testimonials.

4. Capture an email address for further information gathering if required.

UNLOCK VALUE WITH CUSTOMER CENTRIC PROGRAMS OF WORK

From the moment that effective CS tracking is established, marketers suddenly have the ability to orchestrate highly valuable programs of work that are responsive to the living, breathing needs of their customers:

TL;DR:

Most businesses and the agencies they employ try to implement customer experience against a poorly-defined customer strategy, or in an attempt to increase billable hours based on what skillset is available. In order to tap the huge amounts of value available from CX, brands need to relentlessly pursue improving customer satisfaction.

From a well tracked CSI, brands can easily start building specific customer related programs of work designed to capture customers at risk of defection, or engaging with satisfied customers to turn them into advocacy machines, driving highly valuable organic growth.