All too often marketing management looks to client satisfaction ratings whenever sales performance declines. Unfortunately, customer satisfaction conveniently points a finger at company products or services to help deflect marketing or sales organization blame. Customers are reliable internal sources of knowledge, but should be secondary to information obtained from prospects when validating market positioning. On the other hand, if used effectively, customer satisfaction results can quantify beliefs to validate or change an organization’s culture and product positioning. To be successful, marketing departments must understand a few basic tenets:
· Satisfaction ratings are not always validation that organizations provide excellent customer support. The greatest promise offered by these findings is the foundation for organizational (e.g., product positioning, company focus) change, which rarely goes fulfilled;
· Customer perception gathered from satisfaction ratings (attributes in this case) must realistically match the existing company culture (e.g., brand) before embarking upon a replacement, sunset or an upgrade product strategy because a mismatched product delivery and company brand (e.g., best in class, market leader) leads to prospect apathy or loyalty loss.
Of course, some organizations internally conduct satisfaction surveys while many turn to third-party industry resources to monitor client satisfaction. As I have written in the past, internal efforts return biased findings. Yet, an inevitable problem occurs when outsourcing the data to third parties: Integrity of findings. There are several factors that impact why it is hard to anticipate unbiased data from outsourced client satisfaction surveys.
1. Data Availability - The complexity of collecting client data from the vendors to conduct these satisfaction surveys is the first factor. Survey firms require a minimum of 25-30 clients per quarter to ensure an accurate statistical probability and the list of clients must come from the firm outsourcing (and paying for) the surveys. If a vendor does not have a sales process/forecasting or Customer Relationship Management (CRM) system in place there is a high probability that the client information function is weak as well. Considering that less than 60% of WW organizations have these systems in place, the expectation of providing a single accurate report containing all client information is ill-fated.
2. Response Incentives - If sales forecast and CRM automation is in place, common practice is to have the firm outsourcing (and paying for) the surveys to preface the customers slated for satisfaction interviews. Far too commonly, many vendors add incentives (e.g., free monthly support, fix an immediate issue, free pass to user group meetings) to secure superior ratings. Once these falsified ratings are posted for one quarter, competitors feel compelled to reciprocate with similar incentive-based activities to level the playing field. This unnatural competition for the highest ratings precipitates inaccurate findings and a vicious cycle of lofty and misrepresented client satisfaction ratings is perpetuated. The truth is that vendors spend more resources measuring client satisfaction or improving client ratings than they do on simply satisfying their clients.
3. Invalid Statistical Probabilities - The final factor is that mathematical probability prevents movement within short time periods favoring small firms. Competitive rating winners are sometimes crowned when they only have a 1/10 of a percentage point better rating than the next closest competitor, so organizations with smaller sample bases (clients) have a better chance of scoring higher than large organizations with larger sample bases (clients). For example, two companies have the same 8.5 rating on a scale of 1-10 in a single quarter. One is a small organization with only 30 clients while the other is a larger organization with 100 clients. If the smaller organization gains two new clients in the next quarter and both clients post a 10 satisfaction rating, the result will be a new satisfaction rating of 8.6. If the larger organization adds 2 new clients in the next quarter who also post 10 ratings, the new quarterly satisfaction result is a lesser 8.53 rating. The larger organization would require three new clients rating a ten (33% more clients) to gain the equivalent spike in ratings. This is why new competitors to any field usually enter the satisfaction ratings higher than larger and heritage organizations. Furthermore, organizations with fewer clients maintain lofty ratings for at least 4-6 quarters before the field stabilizes.
In summary, I believe that organizations should just overwhelm clients with quality support because satisfied clients are essential in any successful business. However, competitive rating environments incite many vendors to coach, coerce or entice select clients to respond with high ratings. These actions create unhealthy and unrealistic metrics setting up false industry expectations of which no real change occurs. In addition, the basic principle of mathematical probabilities provides a statistical edge to new-comers to the market because higher ratings can be achieved with lesser clients responding to satisfaction surveys. As such, customer satisfaction rating integrity should be monitored to prevent falsified responses. Moreover, you should not lose the fact that as important as a satisfied client base is to add-on future business and positive referrals, nothing improves new business greater than understanding pre-client (prospect) perception!





