Customer satisfaction is often considered to be a fairly soft measurement, relying on such markers as client feelings and industry leanings. Zack Urlocker, a guest contributor for Forbes, has provided an interesting formula for quantifying customer satisfaction in this article, and with the effects of poor customer service costing an annual $338.5 billion worldwide, it's worth a look.
According to Urlocker and a survey of 65 million people in 137 countries,
Customer Satisfaction = Scale x Efficiency x Quality.
Let's break that down a little. Scale is the number of customer service complaints received by your organization. Efficiency is the time it takes to respond to one complaint. Quality is the percent of comlaints settled in one interaction. Just in case math wasn't your strong suit in school, don't worry—Urlocker considers this to be more of a chemistry equation; changing one component of the equation can have drastic outcomes on the other components.
Urlocker gives some good statistics as to how this equation breaks down into industries, so feel free to check that out at forbes.com. For our purposes here, let's skip straight to how to make this equation something actionable for your organization.
Based on the results of the enormous survey mentioned above, some best practices shared by high-performing companies were uncovered:
- Response time is critical. The efficiency portion of the equation has the most profound effect on customer satisfaction. Response time is one of the four major metrics that Aberdeen recently examined in their Customer Feedback Management: Leveraging the Voice of the Customer to Amplify Business Results report. Best-in-Class organizations, on average, are improving response time by just over 21%, and while just part of their program, these best-in-class organizations have an 87% retention rate. While Urlocker findings are slightly different than Aberdeen's, "The Customer Satisfaction Index reveals that companies with an average first-response time of less than 10 hours have customer satisfaction ratings of over 90%," the overall take away is the same: Response time matters!
- Be where your customers are. If your customers are on Facebook, you should be too. The easiest way to serve your customers is to find out where they're congregating and listen to what they have to say. Customers will be impressed with your brand's vast networking presence, and it will be easier for you to respond quickly to their needs if you can catch them in the midst of a Twitter rant versus when they have time to call you.
- Offer self-service options. "Companies that offer rich self-service customer support forums and FAQs have a higher level of customer satisfaction." Consider many computer software programs—oftentimes doing a quick internet search for a glitch or trouble spot not only yields quick results from others who have experienced the problem, it also empowers customers to learn and to fix their own issues.
What do you think of Urlocker's formula for customer satisfaction success? Are there are any other crucial elements that you would include?