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Customer Satisfaction-why Do Businesses Forget It?
Posted By: sadia_na* on 7/13/2004 4:23 AM (CST) 250 Points
Every marketing literature reminds me that customer is king. "Stay close to them!" "Keep connected!" "Satisfy them!" "Reach out to them!". There seems to be so much hype about customer loyalty everywhere. If customer loyalty and satisfaction is the key to business satisfaction, then why do so many businesses fail to reach out and connect with their customers? Don't they know how vital it is or they just don't know how to go about it?

Sadia Naz Alam
A marketing student from Pakistan

Posted by: gavin.dowling* Member Response
7/13/2004 6:37 AM (CST)
Hi Sadia

Simple - businesses get bogged down with the peripheral stuff like immediate profits, delivery, planning for tomorrow, shareholders, reducing costs etc etc etc.

You are SO right, though. Many many businesses do loose sight of that most basic of rules. And even those that remember that customer satisfaction is important, how many go the extra mile and achieve CUSTOMER DELIGHT.

Gavin
 
Posted by: eugene Member Response
7/13/2004 6:41 AM (CST)
Hi Sadia,

Just some thoughts on the question you raised.

Customer loyalty is seen by many businesses as crucial and impacts the business in certain ways. However, not every organisation is able to capitalise on this due to numerous reasons i.e. resources, technical know-how, budgetary constraint etc.

Loyalty is also something that is earned (like trust) over time through :-

- Excellent Product / Service Offering
- Superior Customer Service
- Ability to create an aspirational belonging to the Brand
- Identifiable Rewards
- Constant Communication etc.

Some success stories are like Tesco and Nectar in the UK.

I'd like to believe that the success of the programmes are based on the strong brands behind the programmes and these brands are trusted by consumers, not to mention the strategies employed have proved to be paying off.

So, at the end of the day, customer loyalty is derived from superior product / service offered, great customer service, aspirational brand association, constant communication as well as relevant and achievable reward programmes.

Hope this helps.

cheers.

eugene
 
Posted by: Deremiah *CPE Member Response
7/13/2004 7:41 AM (CST)
sadia_na,

There are a lot of answers to your question and remember this is just from what I have gathered Over the past 20 years.

Q1.)
A.) Companies really don't know (from actual experience) the true value of doing business with a customer geniunely.

B.) Some companies have so many acquisitions in it's life time then down size without considering the man power or technology that they need to put in place to handle customers geniunely. Some of them do this in an effort to show profits that are not customer based. i.e. the profits are man-made from down sizing not customer purchases. (some smaller companies have this same problem from a man power and technology stand point).

Q2.) In this age of information you might be surprised how little companies know because of the burden of work and lack of man power. They actually know very little about the things they need to know to keep up with the vast changes in information and technology which is why some of them have called me in to talk about customer service functions. And then if they have the knowledge their work force is so small and people over burden and ignorant that they can not implement what they know needs to happen to correct the problem. Then there are others that know and start out making the changes but they geniunely can not keep up with the cycle of knowledge groweth and technology changes necessary to keep them out in front and eventually fall behind.

One great man said "those things that I know to do, that I do not. And those things that I desire not to do that I do." I hope this helps a little. Work smart, read a lot and always under-promise and over-deliver my friend. Is there anything that I can do for you?

Your Servant, Deremiah, *CPE
 
Posted by: telemoxie Member Response
7/13/2004 7:47 AM (CST)
The cost of providing customer service is a function of the level of service provided, and it is not a linear relationship. As the level of customer satisfaction approaches 100%, costs skyrocket.

And so it is not as simple as waving a magic wand and saying, "satisfy them". For any business, there will be a most profitable mix of services and level of customer satisfaction, and it will not be 100%.
 
Posted by: kwinters* Member Response
7/13/2004 8:52 AM (CST)
To put it simply:

There are people worried about doing the job......

There are people worried about helping people.........

Guess which one you are talking about?
 
Posted by: jeffe* Member Response
7/13/2004 10:05 AM (CST)
I am the marketing manger for a wholesale distributor. This is a newly created position for my company and it was created because our owners saw a need to reach out and build better relationships with our customers. For the past 8 months, my team and I have been contacting our member retailers on a two week cycle. We find out all the information we can about these stores, not just from a business standpoint, but from a personal standpoint as well. We can tell you who is off with a broken leg, who has had surgery, who has celebrated a birthday and who has experienced a death in the family recently.

It is through this type of relationship that we have seen our stock sales increase tremendously over the past 7 months. Our stores feel a close personal relationship that they don't receive from other businesses.

Unfortunately, many times our customers don't have the time to talk to us. They. like many other businesses, are shorthanded with too much to do and too little time to get it done.

My point here is I believe companies really do believe they need to deliver customer service and satisfaction, but in this time deprived world, it is difficult to do, on both ends of the stick, (your company and your customers.)

I would hate to think where our company would be right now if we had not initiated this new marketing/solutions department. It is working for us but it is easy to get wrapped up in other projects and forget what the mission is.
 
Posted by: jose04 Accepted Answer
7/13/2004 12:01 PM (CST)
Hello Sadia
You have raised an important and a good question.

Customer satisfaction will not be a priority to businesses who have the opportunity to exploit their customers. This is a natural tendency in any marketing jungle particularly when the 'lion' (marketer) is not tamed by education and wisdom (if possible love and affection). It is validated over the history of mans development, where the ‘strong’ tends to exploit the ‘weak’. This will continue as long as the strong stay strong, and the weak stays weak.

Therefore, if the customer is weak and the seller is strong, then exploitation takes place in the market. This exploitative trait is also furthered by a weak legal system and poor consciousness of customer rights by both the customers themselves and the general society at large. In such environments, the governments too do not show a healthy track record of taking care of its people. There are also other unhealthy indicators like long queues in the PDS (public distribution shops), a virtually non-existent human rights situation etc, which does not augur well for the industry and its entrepreneurs who (not surprisingly, at least in the nascent stage) look for inspiration. Most marketing textbooks known to our world belong to the advanced nations and therefore reflect the 'in thing' in their advanced and developed economies. 'Customer orientation' and 'Customer satisfaction' approaches of businesses are some such concepts which hve existed at least for three decades (both in theory and practice). These evolved states of experiences (mostly economic), as experienced in a developed society like the US and in most of Europe, cannot be expected in a developing or an underdeveloped environment, where servility in all its forms are experienced and practiced in general. There are of course exceptions to what i state.

To sum up, 'customer satisfaction' is an ideal which is experienced as a pro societal evolution by communities, state, or a nation. The organizations/businesses in these societies usually express their pro-customer orientations by developing quality and value-laden products/services, which are usually reflected in their mission statements or company credos.
The customer satisfaction orientations practised by organizations, therefore is a reflection of a nation's work ethic, and is often reflected as an, all pervasive, multi-sectoral ethos and state of a country. It has a kind of snowball effect both within an industry as well as within a nation. Initiating this customer orientation calls for leadership and market leaders exhibit large doses of it and should generally benefit by it, despite the costs and other resource constraints. The leader often sets the pace for the followers and what he achieves and creates, tends to ‘stick’ in the customers mind. That's why customers continue to buy from them, if not for ever, at least till a better and a more pro customer challenger comes up and eventually becomes the leader.

These are some of my thoughts. They came up simply because of your question. Hope you find them meaningful. All the best with your studies!

Jose04
 
Posted by: darcy.moen Member Response
7/14/2004 12:41 AM (CST)
Customer service and customer satisfaction are difficult to gauge.

Many businesses assume that if they satisfy a customer, they own them for life. What most businesses fail to realise is: the customer is free to shop anywhere the minute they walk out your door.

We never own a customer, and loyalty is something that is earned gradually over time. Break your customer's sacred trust once, and they are off to the next guy faster than lightening crosses the sky.

I would agree that most buisinesses don't understand how to judge a customer's satisfaction, and they don't know how to encourage loyalty. It has been my quest for 18 years to devise scoring and measuring systems within my own business so I could quantify satisfaction, and qualify a customer's loyalty.

How can you score whether a customer is satisfied? Its a constantly moving target, and it varies from customer to customer. In my own dry cleaning store, I asked my customers if they could describe to me what constituted quality dry cleaning so that I could satisfy my customers better...and the responses came back like this:

One said, "last time I picked up my order, I took it home and loooked at it under a microscope, and I could still see a very faint mark where the stain was, so obviously this is not quality dry cleaning"

Another said: "If its over a hanger and wrapped in plastic - two big thumbs up!!!!"

So, from my exercise, I formulated my own scoring system to evaluate satisfaction. I looked at how an American football referee measures yardage during a game. Up and down the length of the field, plays advance back and forth. The ref's use two markers joined with a length of chain to measure progress or loss. This gave me the idea that I needed a uniform system of measurement (the ten yard chain) that regardless what was happening in my business (like the chaos on the footbal field), I could use a constant measurement to gauge the performance of the play. I set the standards of quality that I wanted my staff to provide (my ten yard chain and two markers), and then used a personality score chart for each customer in my point of sale system. A Pita class customer was the type who demanded "Personalized Individual Total Attention (it could also stand for Pain In The Ass). If my staff had tried their best according to my quality production standards I assigned them, and the customer would complain, I could judge how far "out of norm" the situation was, and weight the customer's complaint(s) accordingly. If my staff would go above and beyond the standards set for them, and could keep such customers happy so that they never complained, the system would score a touchdown!

As for loyalty, well, that too can be scored. Have you ever noticed that all customers are not created equal? If you look up the Pareto Principal, you'll find that you get 80 percent of your business from just 20 percent of your customers.

How interesting that if you had 100 customers, just 20 of them would account for such as dramatic portion of your business....so much so that these few overshadow the other 80.

Does this mean the other 80 are disloyal? Or, ar the 20 super loyal?

I score all customers on three factors: Recency, Frequency, and Monetary values. I noticed that customers who have been in recently, and are frequent customers (meaning they make more than one purchase) and have spent more money than most (monetary), are the types of customers most likely to come back and purchase more from me. These customers, by definition and by pattern, are Loyal custoemrs because they are the ones least likely to go to my competition.

So, you can see, setting standards and watching how your measuring systems really work to qualtify your customers is a lot of very detailed difficult thinking...and few businesses will spend the time to develop such processes because they are too busy trying to survive (and stay in business). I know few businesses even attempt to learn about their customers, let alone study them to discover their habits.

Its far too easy to simply ask ten folks, "How are we doing", and be satisfied with ten lies"You're doing great", than it is to see beyond the "white lies" and really find out what your customers think.

Customers vote with their dollars, and they vote with their feet. If I see the frequency between visists is going down, and the dollar values going down, and its been longer and longer since the customer was last in, I'll KNOW that something is wrong. The trick is, to learn how to read the score to head off trouble before it begins.

I hope this causes more questions that it answers.

Darcy (Customer Loyalty Network)
 
Posted by: sadia_na* Author Response
7/14/2004 2:52 AM (CST)
Thank you all for your responses. The discussion really clarified a lot of things to me and gave me a better insight into customer satisfaction thing. No doubt, maintaining customer loyalty and keeping them satisfied is easier said than done.But those who try, succeed and flourish!
Though all the responses were extremely helpful, jose04 gave me a very realistic view that carried a lot of weight. Really, the working ethics of nation impact any organization's mode of operation too. Corporate culture is in actual, the culture that you find in that nation. And then, this thing reflects in every other aspect of the organization, including its relationship with its customers. Since I hail from a developing country, I found this response to answer a lot of my queries pertaining to this issue. Thank you very much jose04.
And I'd certainly say, KHE is an extremely beneficial forum, not only for the professionals to exchange their views and opinions but also, for students like me, who yet have to break into practical and thriving world of marketing. I certainly learnt a lot with just one question. And would surely become an active member of this forum.
Thanks again to all!
 
Posted by: jose04 Member Response
7/14/2004 3:50 AM (CST)
Sadia

Many thanks for your kind words.

I’m delighted that you found my ideas meaningful. Actually I must thank all the forum members within your query site for their ideas and free rein thoughts. I’ve benefited much though their varied thoughts and sharing of experiences too.

You said it right, KHE is a good site and a testimony to the potential that the internet and technology can benefit people. I too like the comraderie, the feeling of oneness, and the opportunity to explode ideas for the benefit of mankind.

Thanks again for the opportunity to be of help.

Regards

Jose04
 


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