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High Customer Satisfaction Scores Do Not Mean Increased Revenue

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#1   Posted: 14 Nov 2011 08:34

Over the years I've written that to create customer loyalty, you must focus on two things: customer service and creating confidence. The combination of those two gives you a shot at creating customer loyalty.

So, doesn't it make sense that increasing your customer satisfaction scores would also have a positive impact on loyalty? And, shouldn't that mean an increase in sales?

The October 2011 issue of Harvard Business Review's article titled "Customer Loyalty Isn't Enough" had an interesting case study. In 2008 Walmart surveyed their customers and found out they disliked a cluttered store with overstocked shelves, pallets of product and heavily stocked and promoted items at the end of the aisles (end-cap displays). They remodeled their stores and customer satisfaction levels increased. Unfortunately, sales did not.

In the November 2011 issue of the same magazine an article about Office Depot confirmed the same. They were using customer service metrics that included the physical experience, such as the cleanliness of bathrooms and the clutter in the aisles. Even though their customer satisfaction scores improved, sales did not.

Office Depot's president, Kevin Peters, led a turn around that focused on the total customer experience, which included the physical experience and the personal experience. In addition to addressing the physical issues, Office Depot started training their people on how to interact with the customer. They were taught to use the right questions to help the customer find what they were looking for, as well as recommending complementary items. This customer service strategy, based on both the physical experience and personal interaction, positively impacted sales.

Some organizations are using the wrong customer service metrics to measure customer satisfaction. Measure what matters to the customer. Improving the physical design of your business or the system you have in place for customer service may not be enough. There is usually a people-to-people component that must be managed. It takes a combination of the physical experience, the system behind the scenes and the personal interaction strategy to have a complete customer experience that can lead to loyalty — and ultimately more sales.

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