Why You Need a Customer Satisfaction Survey

Reprinted from Agence Sales January, 2002

WHY YOU NEED A CUSTOMER SATISFACTION SURVEY

By:
Leslie Wood
President
Les Wood Associates

Michael Kirsch
Vice President of Research
Les Wood Associates
Consider the following:1

You thought you had made a good impression

with that prospect. You were sure that she
would give you an order, but she bought from
your competitor instead.

You feel that you are a good judge of customers,

but somehow this one got past you.
Then there was that prospect you were sure was
not interested the one that came in with that
big order.
How do you know what people really think?
Customers often say one thing to your face and
then do something completely different. Most
people have a natural tendency to be polite and
not offend us. What you thought was a
promising sales call was simply the customer
being polite.
It can also be difficult to understand the impact
of different cultures. Europeans and Asians react
differently from Americans, and their words and
actions can be easily misinterpreted.
Another problem in judging relationships with
customers is that it is virtually impossible to
remove one's own bias. If one customer fills us
with praise, telling us how much he or she enjoys
doing business with us and how wonderful our
products and services are, this can easily push
four or five mediocre reviews from our memory.
The all too human tendency is to remember the
good things and ignore the bad.

Customers are five times more likely to

switch to a competitor because of problems
with service than because of problems with
products or pricing.

For every customer who complains, 20-30

others experience problems that you never
hear about. At least six of these may be
serious.

These 20-30 dissatisfied customers will

complain to an average of 18 friends and
acquaintances.

This means for every complaint that we hear

about, up to 360 people have heard similar
complaints or worse.

Finally, it costs five times as much to recruit

new customers as it does to keep an existing one,
which means that it is very risky to assume that
we know how our customers are thinking, based
on gut feel. It is important to measure and
analyze customer satisfaction systematically.
While there is no way to know exactly what an
individual thinks, it is possible to get an accurate
picture of what the market thinks of your
business and why they buy from you or from
your competitors.

What is a Customer
Satisfaction Survey?
Simply put, customer satisfaction surveys are a
means of measuring how satisfied your
customers are with your (and your competitors')
products or services.

From: "So you want to be a better service

leader", by Peg Anthony, VP, ORC Macro,
Quirk's Marketing Research Review
(January 1999)

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Why You Need a Customer Satisfaction Survey

The result is a quantitative measure of their
levels of satisfaction. By repeating the survey at
regular intervals, you can find out whether your
customers satisfaction levels are improving or
deteriorating. If you make some changes in your
marketing strategy and then repeat the study, you
can find out how effective your changes have
been.
Customer satisfaction surveys are performed by
asking current, potential and past customers
about their needs, wants, expectations,
experiences and degrees of satisfaction with
various aspects of your products or services.
Each respondent will have a different viewpoint
and opinion, but questioning many people results
in an overall measure of your customers'
satisfaction and, equally important, why certain
groups of customers feel as they do.
For a number of reasons, customer satisfaction
studies are often performed by outside
companies, although "do-it-yourself" studies also
bring some benefits. One issue with Do-ItYourself studies is the bias that inevitably creeps
into the results. To avoid this, independent
surveyors typically do not disclose the name of
the supplier to the respondents. They do this by
asking about a series of companies; respondents
do not know which of these is the real client.
These surveys can be conducted over the
telephone, through the mail, via face-to-face
interviews and through the Internet. We will
discuss each of these media in detail in a future
article.

Reprinted from Agence Sales January, 2002

What Can You Learn From a

Survey?
Customer satisfaction studies can be designed to
explore many issues. Depending on your
particular needs, they can give you answers to
such questions as:
Which of your customers or sales
territories are secure? Which are at
risk?
How can you win back accounts that
you have lost?
How do your relationships with your
customers compare with those of your
competitors?
Are your relationships with customers
improving or deteriorating?
What are your perceived strengths and
weaknesses?
What product/service factors do your
customers consider most important?
Where are your competitors pushing the
hardest?
In summary, customer satisfaction surveys can
provide you with vital intelligence about what
the market needs and how well your company is
filling those needs. This information is critical
in making effective marketing decisions. These
surveys can be performed either internally or by
independent consultants; both approaches offer
advantages. In our next article, we will discuss
how you can do these surveys yourself.

Leslie Wood, president, Les Wood Associates, has spent 30 years in a wide variety of manufacturing operations.
Prior to founding Les Wood Associates, he was the corporate manager of industrial engineering for Sweetheart Cup
Corporation, a billion- dollar manufacturer of disposable plastic and paper products. He has held similar positions
in other industries including high- tech semiconductors, electronics, plastics processing and bicycle manufacturing.
His expertise is in planning and managing manufacturing operations. Both as a consultant and in his previous
positions, he has held direct responsibility for developing, planning and starting up new manufacturing facilities and
distribution centers. Wood holds a degree in mechanical engineering from Trent Polytechnic in Nottingham,
England.
Michael Kirsch, vice president, Les Wood Associates, has almost 30 years of consulting and industrial
experience. His consulting experience includes positions within Chem Systems and Phillip Townsend Associates,
for whom he headed the Boston office until its relocation to Detroit. He has held R&D, market research and
strategic planning positions within American Hoechst, Borg-Warner and General Electric. He has managed or
contributed to a number of international proprietry and multi-client studies. His market research skills include
market opportunity assessment. He holds a BS in chemical engineering from New Jersey Institute of Technology
and and an MBA from the University of Massachusetts.

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