Measuring Customer Satisfaction: How Customer-Friendly Is Your Business?

1. How do I make my company customer-oriented?
2. How can profitability be increased with higher customer satisfaction?
3. Where should a survey start to achieve the greatest effect?
4. What types of survey are there?
5. How can customer satisfaction be effectively measured by different types of survey?
6. Why is the combination of objective and subjective methods helpful?
7. Are experts needed for the design of the survey?
8. How can I go into the implementation and which software can help me with this?
9. Can the NPS also be used as a customer satisfaction survey?
10. If the NPS is so criticized, why do so many companies use it?
11. Conclusion on customer satisfaction surveys

If you look at the most successful companies in the market, they are often companies that understand how to solve and understand the problems and desires of customers the best. These companies can design their products or services or their service in such a way that they clearly stand out from the competition and speak the customer's language. And as simple as the offer may seem, you can feel that there is a concept behind it that allows them to achieve this goal with seemingly effortless ease.

How do I make my company customer-oriented?

Your company's customer orientation can be understood as "an attitude that is expressed in the customer-oriented behavior and actions of the employee and the entire company". This definition was developed some time ago by Volker Trommsdorf, today holder of the Chair of Business Administration with a focus on Marketing at the TU Berlin, so that employees can think with the customer's head, see with the customer's eyes and make the customer's view their own.

Now, however, this attitude must first become reality through actions so that customers can perceive the successful change of perspective. For this to succeed, the behavior and actions of the employees must correspond to what the customers expect from the company.

So, your company must achieve two things: On the one hand, employees and managers must be involved and an appropriate corporate culture must be established. This ensures that the change of perspective is lived by them in everyday life. On the other hand, the perspective of the customers must be won, which is ensured by customer satisfaction surveys.

How can profitability be increased with higher customer satisfaction?

The results of customer satisfaction surveys contribute to better customer proximity. This customer proximity represents a "bundle of entrepreneurial measures to build up an acquisitive potential", as described by Christian Homburg, now holder of the Chair of B2B Marketing, Sales & Pricing at the University of Mannheim. In other words, if your company is closer to the customer, it will be better than other companies at (newly) binding customers to itself. This can have various positive effects:

• Image: Customers recognize your company's efforts for them, which can promote a positive perception.
• Knowledge: It can be determined with which parts of your offer the customers are satisfied or unsatisfied.
• Employee: The employees of your company perceive the customer, through the better understanding after the survey, as an intense part of the value chain.
• Review: The effectiveness of the initiated measures can be determined through recurring measurements.
• Improvement: Follow-up programs can be derived from identified strengths and weaknesses that strengthen customer loyalty.
• Comparability: The comparison of similar surveys after different industries, age groups and markets can provide valuable insights. For internationally oriented companies, country-specific offer alignments are possible.
• Prevention: The timely collection of customer opinions can make changes possible that prevent migration.

And "Yes", it does involve some effort, but the effect is multifaceted, perceptible to customers and results in higher profitability.

Where should a survey start to achieve the greatest effect?

Well, ideally with a real problem, whose solution can be measured in a traceable way. For this problem from marketing, sales or service a hypothesis is formulated that should be checked. This step is very important because no one in your company can really be sure to know the cause of the problem and its customer perception exactly.

Then the target persons are selected that you want to interview to confirm the assumption. From this point on, it is usually advisable to involve experts in surveys. They are familiar with the complex matter of survey models and can ensure that the later interpretation of the results leads to the desired success.

Source: Brodersen, Lars: CRM in practice, 2nd edition, Hamburg, p. 59

By the measurable solution of the problem on the one hand the effect can be made transparent and at the same time it is noticeable for the customers because it takes place in the departments with customer contact, which additionally reinforces the effect positively.

What types of survey are there?

There are two types of surveys:

• Objective measurements: Factual factors are measured or third-party judgments are determined.
• Subjective measurements: Physical and psychological facts are measured to determine the individual perception of customers.

Since the objective measurements are influenced, their informative value is often questioned. Therefore these measurements, taken on their own, are not particularly reliable.

How can customer satisfaction be effectively measured by different types of survey?

Objective measurements:

1. Key figure analysis: Numbers on sales, market share, profit, resale rate, migration rate etc. are determined or aggregated.
2. Observation: Deficiencies in product development or in the delivery of services are specifically collected by professionals.
3. Quality control: The quality of products and definable key figures of services is checked.

Subjective measurements:

1. Event-oriented procedures: The touchpoints of the customer with the service or product are determined. The "moment of truth" can be determined with this.
2. Characteristic-oriented procedures: Individual characteristics of the company's offer and the resulting subjective customer opinion on quality are asked.
3. Problem-oriented procedures: This procedure is intended to uncover the areas that play a major role in customer satisfaction.

As an overview, the whole thing looks like this:

Source: Brodersen, Lars: CRM in practice, 2nd edition, Hamburg, p. 63

In the source mentioned above, the respective basics and individual advantages and disadvantages are explained in more detail, but for now the following explanation should suffice not to spread the frame.

Why is the combination of objective and subjective methods helpful?

The combination of objective and subjective methods is helpful because:

• the quantitative (object-oriented) research represents the models, relationships and manifestations. The methods are standardized and structured. General predictions can be derived from them.
• the qualitative (subjective) research shows greater flexibility and is free and exploratory. There are few standardized guidelines in favor of content validity.

Are experts needed for the design of the survey?

Whether you need the involvement of experts, you must decide in the end yourself, but I want to recommend it and name the reasons for it. Experts ensure that the individual and situational conditions of your company are adequately considered. But it is not only important to involve experts because of the selection of methods, but also because the conduct of surveys is subject to further criteria to be helpful:

• Alignment: Measurements can have the big picture from a multitude of sub-criteria (Multiattribute procedures) as a target. Other measurements or procedures highlight details to highlight weights (Decompositional procedures).
• Objectivity: The independence of the results from the executors or contractors.
• Execution Type: The type (Depending on the procedure, the survey can be conducted by telephone, by letter, in person or online. These differ in effort, influence, number of possible answers, identifiability, respondent attitude, control possibility etc. They can each be carried out ex-ante - ex-post or only ex-post.) can be different depending on the procedure and have different results depending on the execution.
• Result Determination: Results can be determined both explicitly and implicitly, through one-dimensional or multi-dimensional measurements, qualitatively or quantitatively, supported or unsupported, standardized or semi-standardized, structure-checking or structure-discovering or, for example, reaction-analyzing, primary or supplementary, attitude-oriented or satisfaction-oriented.
• Combinability: Procedures can lead to results individually or in mutual supplementation.
• Reliability: The reliability of the determined results is ensured by the equality of results (stability), the frequency of characteristics (consistency) and the equivalence of measurements (equivalence).
• Security: Ensuring that the determined results are not unwittingly or deliberately changed.
• Utility: The suitability of the method to clarify the hypothesis.
• Validity: The robustness and validity of the
  Determined results.
• Proportionality: The cost/benefit ratio of the method and the burden that is imposed on the customer.
• Understandability: The ability to understand and interpret the procedure itself and also the results. This applies, as far as possible and necessary, to those who collect and those who are surveyed.

This list is quite long and describes a scope that is probably hardly used in its entirety in daily practice. But it shows what experts pay attention to and in the end ensure that the results contribute to the success of your company.

At the same time it should also become clear what effort the market leaders mentioned at the beginning make in order to be successful in the market. But they have another advantage, besides knowing what the customers appreciate about their performance: They manage to transform the knowledge from the close customer into problem-oriented, everyday solutions.

How can I go into the implementation and which software can help me with this?

This is now the step that you can tackle yourself and where you won't need any additional experts (apart from one exception). To answer the question about the software: It depends largely on which survey you are conducting and via which channel.

But beforehand a hint: For (large) surveys with a high significance, experts usually use Statistical Package for Social Sciences (short SPSS) from IBM, which is by far the most comprehensive software and can only be operated with a fairly high effort and level of knowledge.

For everyday use, smaller applications are sufficient. For this you can find some tools with ratings and hints on the OMR Reviews website. Whether it is now Microsoft Forms, Google Forms, Survey Monkey, to name a few of the most famous, or one of the many others, it is important to know via which channel the survey is to take place, to get the right support. The software selection criteria are often the simplicity of operation, the presentation of the result analysis as well as the setting options (e.g. allow double answers, duration for the survey etc.) and possibly the integration into the existing software landscape. Ultimately, of course, the price, which is called up once or measured by the transaction volume.

The exception mentioned above is the review of the created survey before it is used. Mistakes always creep in once in a while, for which a review is helpful: Often this concerns the survey of grouping criteria (e.g. gender, age, geography etc.), the unambiguity of the question, necessary compulsory answers or check questions for the validation of the correctness of the answer. Testing the survey with a small circle of recipients can reveal this or the experts who helped with the conception have another look at it.

Can the NPS also be used as a customer satisfaction survey?

The Net Promoter Score (NPS) was missing in the overview above because it is not a survey. The NPS is only a value that can be collected. The NPS is certainly justified, but only in some cases. To help you use it in the right places, here are two guidelines:

What distinguishes the NPS from a survey?

• The NPS is not scalable.
• It cannot be collected anonymously.
• The NPS cannot be combined with other surveys.
• The values of the NPS cannot be compared between companies or in an industry.
• It is supposed to measure the totality of the customer's loyalty, but rather asks for a specific event.
• The ranges of the promoters, detractors and passives are arbitrarily defined.
• Due to its pure use as an online survey the survey result is distorted, because no analogue feedbacks [1] can flow in.
• It cannot confirm/verify problems or the results cannot be followed up. It is unclear exactly what the rating refers to.

This sounds like a lot of criticism first, but we will come back to that in a moment.

When can you use it?

• The NPS is collected digitally, so you can e.g. integrate it at the end of the checkout process.
• Since tendency changes can be detected with it, it helps to raise and determine it continuously, whether changes to the shopping process in the online shop led to the intended improvement.
• It is easy to understand and communicate and in combination with the general form ideal for stakeholder meetings.

If the NPS is so criticized, why do so many companies use it?

The business author and strategist Fred Reichheld has created something with the NPS that is so far without alternative. Customer satisfaction surveys can be quite laborious for you if you don't already live them continuously. The NPS is here to help and can, despite all criticism, do something where nothing has been done before or provide a first insight.

Whether NPS or customer satisfaction survey - If you do one of the two, you are already living the "Walk the Talk" and are one step ahead in the adoption of the customer perspective. And guaranteed the increase in profitability will not be long in coming.

Conclusion on customer satisfaction surveys

Many decision-makers have concerns about conducting customer satisfaction surveys and doubt whether the effort justifies the results. When you look at the details from above, this first impression is quite understandable. However, it is so that the conception of a survey takes place once and the implementation can be permanent (or as long as the problem confirmed/refuted or solved could be).

The implementation itself is usually not particularly laborious, because e.g. the survey channel is already considered in the creation of the survey and the formatting or content generation takes place in a targeted manner as a result. Added to this is the fact that the results can contribute quite directly to the identification of the problem - e.g. a survey linked by the service team in the response emails usually finds quite a high resonance.

Practising this continuously and establishing continuous feedback loops within the company quickly leads to the realization that the efforts are worthwhile. It is also important to realize that a company without customer feedback can be compared to a submarine that always only sees the world through its periscope. It is important to take into account the external perception in order to be able to see the big picture better.

[1] Younger participants are more online-affine, which excludes older ones or allows for misinterpretations.