Wednesday, June 18, 2008

Multidimensional Customer Satisfaction - Part 1

As I continue to read about customer satisfaction, I am realizing how little progress is being made. I still see measurements that are the same as they were ten and even fifteen years ago. For this reason, I am going to spend several blogs looking at customer satisfaction from the perspective of a multi-dimensional measurement.


I first measured customer satisfaction while working at AM International (the old Addressograph Multigraph Corporation) in 1980. At that time the service division supported ten different product divisions. The purpose of a customer satisfaction survey was purely defensive because the service division was being blamed for lack of product sales, as I recall. We decided to ask the customers how we were doing rather than count on the product divisions to relate their customer perspectives. As it turned out, and perhaps why I appreciate customer satisfaction measurement so much, the survey validated what we believed to be true; namely, the service organization was doing a fine job and the real problem was that the sales organization was acting more like order takers than salesmen. Since then I have become a true believer that the customer is the best person to ‘tell it like it is.’
Furthermore, a survey gets past the anecdotal argument where one anecdote is offered to counter another anecdote that presents the opposite point of view. The survey provides a statistical basis that infers the perspective and preferences of the entire customer base when the survey has been properly performed. However, as I have assisted more and more companies to measure customer satisfaction, I have learned what now appears to be the obvious. I have learned that customer satisfaction in the industrial/commercial world is not sufficiently measured with a single survey to an individual.

Single versus Multidimensional

The single survey to an individual in a corporation will measure that person’s perspective of the company being surveyed. The question is whether that single perspective is an accurate representation of the perspective of others within the corporation. Of course the second question is whether the person surveyed is qualified to respond. With the exception of the retail market, most companies in the business-to-business (B2B) industry do business with other companies with the implication that no one person accurately reflects the perspective of the company.
There have been a number of books written in recent years on B2B marketing. These books point out the great difference between marketing to the consumer and marketing to commercial and industrial concerns. One of the major points they make is that a company is not just a single individual and the selling process can consist of selling to a number of people within the company. In fact, many companies have teams that are used to select and evaluate vendors. Members of the team might include personnel from the quality organization, engineering, operations, and finance as well as purchasing.

While the decision to choose a particular vendor may reside within a single individual, corporations today are using teams to perform evaluations and make decision recommendations. Hence there is the need to make multiple measurements to accurately assess the satisfaction level of the ‘corporation.”

Consider a client of mine in recent years. This client sold and serviced large computer systems. The purchase decision was typically made by a “decision maker.” The computer system was usually managed by a “system administrator.” The computer system was used by many “end users’ because of its size and speed. If the computer company were to use the single measurement approach to capture customer satisfaction, which “person” do you survey?

The answer most survey organizations would give is to survey the decision maker because that is where the decision will come from the next time a purchase is to be made. “As long as the decision maker is happy, I’m happy” is a quote that is made by the naive. While the decision maker may be happy at the time of the survey, that does not guarantee that he will be either a loyal customer or even that he will be satisfied at the time of the next purchase. Some reasons why the decision maker alone may not be appropriate are:
1. The decision maker may be far removed from the operation and may not be aware of the positive or negative perception toward the computer that is present within the organization.
2. The decision maker may not even wish to be informed until the next time a decision is to be made.
3. The decision maker may be a decision maker in name only.

Meanwhile, the relationship between the computer company and the other groups within the user company is being established.

As it turned out, the users in most of the companies that used this computer were extremely influential and could effectively direct the decision maker according to their wishes so that a measurement of satisfaction from the decision maker was of little value with respect to satisfaction and loyalty. The real point of this example is that all three groups of individuals were important. Perceived problems from any one of the groups would have some effect on the outcome of the next purchase. Thus, it was necessary to know where each group stood with respect to the satisfaction with the computer system.

What is missing in the single measurement

The single measurement of customer satisfaction within a company misses two very important components; namely, the perception of each group within the user company that has any interaction with the product or service provided, the potential differences in satisfaction between the various groups, and the real level of loyalty that is being created within the user company as a result of the perceptions of the various groups.

I believe that these measures are even more important than any single measurement because the ultimate objective is customer retention which can only be derived from loyalty. Since loyalty will only be developed from the combined levels of satisfaction in each group, the key is to be able to derive the combined loyalty factor.

In my next blog in this series I will focus on how the similarities and differences of the measurements of the different groups within the user company. If you are still using the single measurement method for customer satisfaction, you may want to rethink your position - especially if your products and/or services are being sold to corporations rather than individuals.

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