Wednesday, July 28, 2010

Satisfaction Is Not Enough

There was an interesting thought by Dick Gorelick about satisfaction that needs some further discussion. His premise is that customer satisfaction is not enough. He starts out by stating that the majority of customers that defect are satisfied. It is a follow-on of the Harvard Business Review article by Jones and Sasser titled "Why Satisfied Customers Defect."

Mr. Gorelick surveyed print buyers for American Printer, an organization that services senior executives in commercial printing. He states that the problem is that customer satisfaction is a poor metric for predicting account retention or loss.In his survey he found that fewer than 3% of survey respondent's' comments mention products or equipment. He found that the important factors in a customer relationship are memorable and unique events and services - ranging from green pretzels on St. Patrick's Day to the personality of the receptionist.

The main point of his note is his conclusion that the "silent killer" of a customer relationship occurs when it appears that all is well with the customers based on feedback that indicated no pressing problems or deficiencies. His belief is that when a company believes that just "doing more of what we've been doing" is making the incorrect assumption that customer satisfaction is a static concept. Within this assumption is another incorrect assumption that competition is not getting better.

When competition increases the company that continues to provide the same level of performance will find a year-to-year erosion of the customer base.

The bottom line is that the real issue for business is customer defections and those defections will not usually be the result of product quality or defects. Customer retention occurs when memorable events continue.

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