By Nancy Nygreen, Ph.D.
Customer satisfaction initiatives have succeeded and failed for a variety
of reasons. But as the customer satisfaction field has developed over the past 3
decades, practitioners are beginning to agree on a number of factors which are
necessary if a customer satisfaction initiative is to have a significant
positive impact on the bottom line. Following is a brief summary of these
- Set the bar high enough. Customer satisfaction has a direct
impact on customer retention and share of wallet, but the relationship is
not linear. It is curvilinear. In competitive markets, a somewhat satisfied
customer is often no more loyal that a somewhat dissatisfied customer.
Organizations that do not understand how high to set the bar will not
- Focus. Customer satisfaction does not mean being all things to
all people. It does mean identifying a target market and differentiated
position, and then delivering on the promise. It sometimes means asking some
customers to stop doing business with you, as Nordstorm has demonstrated.
- Provide value. Customer satisfaction does not eliminate price
sensitivity. An integral part of a customer satisfaction strategy is the
ability to deliver high customer perceived value.
- Educate your customer. The clothing retailer Sy Syms is correct when he says
that an educated customer is our best customer. Understanding how to use a
company’s product or service has a very strong bearing on satisfaction with
that product or service.
- Satisfy your employees. Employee satisfaction also has a direct impact on
customer satisfaction. But again, the relationship is often curvilinear,
rather than linear. Moreover, it is not merely an issue of
creating happy employees, but a function of strategic understanding and
commitment, role clarity and enablement.
- Change the way you do business. A customer satisfaction
initiative can rarely be superimposed on an existing organizational
structure and culture. It is not something a business does; it is a way of
doing business that depends upon senior management leadership.
- Assume a long-term investment. Customer satisfaction is a long-term
investment that can have a substantial financial impact. But unfortunately, in
its first stages Quality is not free. Accordingly, it is essential to decide
up-front how the bottom line impact of the initiative will be measured.
An important first step in a customer satisfaction initiative is ensuring
that the senior management team understands these seven concepts and the
implications they will have on the organization.