Mike Pritchard is President of 5 Circles Research, providing full-service market research and also helping clients improve their own surveys.
While there is plenty of evidence that customer satisfaction is linked to profitability (e.g. https://www.burke.com/Library/WhitePapers/B.WhitePaperVol5Iss3.pdf ) , some wonder if profits will decline by doing too much. One reason for these concerns is when improvements aren’t directed at the right groups within the customer base.
The Secure Customer Index® (combining overall satisfaction, willingness to recommend and likelihood of continuing or repurchasing) is a powerful tool that can profile customers into groups and then determine which potential improvements will have the most impact. The Secure customers are those who are most satisfied overall, most likely to repurchase, and most likely to recommend (scoring top on all three questions). These are the most valuable customers overall – because they buy the most, are the best advocates, and generally cost less to service. They probably won’t need expensive changes to remain classified as secure, but it is important that the company continues to provide appropriate support to keep them in the category. Satisfied customers score top or second for all the three questions. Improvements that will improve satisfaction among this group are the most likely to pay off because these are people who are already favorably disposed to the company, and are the easiest to move to the secure category where they become even more valuable.
If improvements (such as additional features, better quality, or better customer service) are what the Satisfied customers want, those are the things that should be prioritized highest. Such changes are likely to be appreciated by the Secure customers also. But if there are improvements desired by the Secure customers that aren’t going to make a difference to the Satisfied, consider whether these might be over investments. This distinction can be determined by analytical tools such as multiple regression analysis perhaps using derived importance rather than stated importance. [“your debutante just knows what she wants. But I know what she needs.”, Bob Dylan]
Profiling customer in this way also helps with marketing and sales efforts. The other two groups are Dissatisfied (scoring low on any measure) and Indifferent (everyone else). It may not be possible to move the Dissatisfied to the Satisfied without major changes. Perhaps they aren’t a good fit in any case. By identifying the characteristics of the groups, the sales force can be instructed who will most likely be a satisfied customer and should be targeted. Perhaps it sounds harsh to prioritize this way, but in these times of limited budget and eroding profits, it is far better to serve good customer well than to spread efforts too thin.