Wednesday, July 30, 2008

Multi-dimensional Customer Satisfaction - part 8

I will close this series on multi-dimensional customer satisfaction with some additional discussion of the combined satisfaction scores that were introduced in the previous blog in this series (part 7). The second half of the blog will close the series by answering the question “So What.” This question is offered to provide a perspective on this series in light of what others appear to be doing in the field of customer satisfaction measurement.

The Underlying Assumptions of the Customer Contact Model

The calculations that were performed on the customer satisfaction measurements to get to the combined score have several important underlying assumptions. These assumptions include:

1. Linearity of scales. While it is known that satisfaction scales are not linear, practitioners assume linearity to simplify the calculations and make the results readily understandable. Furthermore, the cost of calibrating a non-linear scale is generally prohibitively large compared to the cost of using an approximate “linearized” survey scale. This assumption is true for all satisfaction surveys where linear scales are used. As a quick self-check for non-linearity, answer the question “does it take the same amount of energy to move a customer’s perception from 9 to 10 on the 10 point scale as it does to move from 5 to 6 on the same scale?” This same logic suggests the same question for a 5 point scale.

2. Consistency of scales. When the same scale is used for members of different groups (engineers, operations managers, accounting personnel, etc.), the assumption is that each group will score satisfaction consistent with the other groups. Another way of saying this is that all groups would score a particular action the same. For example, would engineering, purchasing and operations personnel score the same level of satisfaction with product quality if a purchased product (that involved each group) failed during the warranty period? If the scale was consistent, each group would have an identical score for that aspect of satisfaction.

3. Repeatability of scales. When the same survey with the same scales is used over some period of time, the assumption is that the perception of the scoring does not change with time. Thus, it is assumed that a score of 9 in one period is identical to the score of 9 in some other period. While this seems to be a reasonable assumption, the reality is that customers have periods when they become more critical in their scoring and periods when they are less critical. In my experience, customers become less critical after a period of consistently reliable performance (during the useful life of the product) and then become more critical when the product no longer performs reliably. Similar changes in scoring also occur in the area of sales, customer service and administration. The conclusion is scales are not very repeatable. Once again, the assumption is made that the scales are repeatable to simplify the analysis and keep the costs low.

An important point that applies to all three assumptions is that even though it may not be realistic to assume linearity, consistency or repeatability are valid, the survey results still have meaning and can be used with other management information to draw inferences about the customer population and make strategic and tactical decisions.

When the scores for multiple customers are combined, the importance of these assumptions is critical since the errors associated with each of the assumptions are present in each of the scores. Thus, when the scores from different individuals are combined, the errors in those scores also combine.

Because these errors are present in the combined satisfaction scores, the use of the combined scores presents slightly more risk (due to combined errors) than single satisfaction measures. Each time the combined scores are used, the results should be examined in the light of these assumptions.

“So What?” or Why Do I Need Multi-dimensional Customer Satisfaction

It was important to write this series on multi-dimensional customer satisfaction because too many companies in the business-to-business world continue to view customer satisfaction as a single point measurement. I base this conclusion on my own personal experience. As I talk with service managers from different companies, I am amazed to find they are still using a single point measurement of customer satisfaction, the same as they did 15 years ago.

The same managers that use customer satisfaction measurements and measurement techniques that are 15 years old will have the latest technology of computers, printers, modems, scanners, etc. It is clear they see the need to update the technology of their computers and peripheral equipment, yet they do not see that there have been improvements in the way customers can be evaluated.

Loyalty and retention have evolved from the simple satisfaction measurements. We know that satisfaction is a passive state and that a satisfied customer is not necessarily a loyal customer. As J.D. Power has noted in its automobile surveys, car manufacturers are scoring better than 90% in satisfaction and yet the loyalty of car buyers is less than 50% at best. It is clear there is a significant ingredient missing in the car purchasing model and, I believe, there is a similar ingredient missing in the model for purchasing and using high technology equipment. Since loyalty is an active state and requires energy from the customer, compared with the passive state of satisfaction, the missing ingredient has to do with the customer involvement with the company. To ignore this fact, is to miss out on one of the easiest ways to improve customer retention.

Customer satisfaction is the first step to achieving customer retention, which I have shown mathematically in my previous articles, and which leads to increased market share. Once you have taken the first step by measuring customer satisfaction, not to take the next steps of measuring customer loyalty and customer retention would be equivalent to building a house but stopping after the foundation had been completed. Satisfaction measurement is the pabulum of customer information. Although you will not die from a steady diet of pabulum, you will also not grow very fast and eventually the food will become very boring. As you use the satisfaction information, you will, hopefully, start to see the need for more information and perhaps more sophisticated analysis. (You should be seeking food that is more satisfying.) My experience indicates that it usually takes a management team about one year to really grasp the fundamentals of customer satisfaction and begin to see the implications of the results of the surveys. A solid 3 or 5 year plan for increasing the level of sophistication should be a part of your survey plan.

Multi-dimensional customer satisfaction is the first step for those in the business-to-business world where the buying and use of products and services requires the interface between 2 or more people in the customer organization and 2 or more people in the company selling the products and services. Now that the methodology is available to measure customer satisfaction in multiple dimensions, companies should begin the process of understanding their customers by taking the first step in the multi-dimensional world where they operate every day; rather than hope that somehow a single measurement from the customer will accurately reflect the multiple ways in which the company is perceived.

If you have used any multi-dimensional measurement of customer satisfaction, I would like to hear from you. I would like to write a complete blog about companies that have taken this step so that I can report the pros and cons of implementation. Write to me at Pepperdine University. My e-mail address is

No comments:


web visitor stats
OptiPlex 755 Desktops