Re-thinking customer satisfaction research

I am a strong believer in the notion that the ultimate goal of any research program is to drive business results. Customer satisfaction research is no different. I came across an interesting perspective on customer satisfaction research in Research Magazine and it got me thinking.

I think, many a times, customer satisfaction is used as a company-wide KPI without truly understanding how it drives business results, i.e. how customer satisfaction links with key business outcomes such as sales, market share, profit or even share price. I think understanding this causality with business measures is the first step in designing an effective program. I think it is crucial for any business to understand the impact that relative levels of customer satisfaction have on the business. For eg. on a 1-5 scale of customer satisfaction, does it make more business sense to convert 'satisfied' customers to 'very satisfied' OR rather to convert 'dissatisfied' customers to 'satisfied'?

One way of identifying the key levers is by understanding the nature of the relationship customer satisfaction has with business measures. This relationship could be one of the following:

Scenario 1 is a classic example of a case where the true focus of research must be on 'dissatisfaction' rather than 'satisfaction', given that higher gains may not be achieved by delivering superior customer experience levels. In such cases, the research must be designed and tailored to focus specifically on the dissatisfied segment, and how to improve their experiences.

Scenario 2 is an example of a business where satisfaction or customer experience is a critical part of the overall offering (for eg. the airline industry). Here, the research program must be more holistic; and designed to not only address poor experience levels but also build and drive superior experiences.

Scenario 3 is an example of a business where customer experience is not part of the overall promise/ offering but where superior customer experience can be leveraged to build competitive advantage. Here, the focus of the business and research programs must be on converting the 'satisfied' into 'very satisfied', and even further into promoters or advocates.

One still needs to track customer satisfaction with all customers as a high-level KPI - however, prioritising further research based on the above will not only help in getting the biggest bang for the buck from these programs, but also help in operationalising the results internally.

Is your social media investment worth it?

I recently saw an interesting presentation on the basics of social media by Olivier Blanchard. Personally, I think the framework and approach is really valuable in order to understand the basics of ROI on any marketing program in general.

Quite simply, it is the distinction between non-financial and financial ROI. Even though your social media campaign achieves high click-throughs, visits, online conversations, this does not necessarily imply conversion into sales. This is the same principle as advertising - I mentioned in one of my earlier posts that awareness means nothing if it doesn't convert consumers through the funnel (both in the short and long term). This throws up the question of whether what we should really be measuring is the salience and relevance of the advertising?

Blanchard's presentation is great to have a quick browse through. It tries to make the point that establishing a base line measure of sales/ profits is a great starting point for any ROI measurement program i.e. comparing the baseline level of sales with the lift in sales achieved during the period when these social media activities were engaged in.

However, I think this might be too simplistic, as the lift in sales may not be attributable to the social media alone. Also, not everything is meant to impact in the short term. By definition, brand building is long term, and I think social media is a long term channel. Consumers engage with social media to have conversations and be heard, and not primarily to buy brands. Brand building is the result of these conversations and interactions.

Anyway, I will leave you to enjoy this presentation for now.

Olivier Blanchard Basics Of Social Media Roi