Stop Managing Customer Satisfaction Reactively

By Cicerone, Bob; Hekele, Aaron et al. | Industrial Management, May/June 2009 | Go to article overview
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Stop Managing Customer Satisfaction Reactively


Cicerone, Bob, Hekele, Aaron, Morado, Jason, Industrial Management


EXECUTIVE SUMMARY

Assessing customer satisfaction is like trying to put toothpaste back in a tube. This situation exists when the assessment of customers' satisfaction with a supplier does not combine a traditional, reactive assessment of customer satisfaction with a nontraditional, proactive analysis and evaluation of the supplier's two internal functions that are the root causes of a customer's level of satisfaction and dissatisfaction. A proactive assessment of performance can eliminate weaknesses that threaten customer retainment and new prospects.

Consider the following example from a leading company in the less-than-truckload segment of the freight transportation industry. Market research conducted by this company showed four factors that were important to a majority of its customers when they selected freight carriers: reliability of pickups, on-time deliveries, claim-free shipments and responsive personnel. This study also showed that customers found no differences on these and other selection factors between the company and its two biggest competitors. In a subsequent study, the company assessed customer satisfaction with the company's performance on the selection factors.

To differentiate the company from its two main competitors and to enhance the level of customer satisfaction, management implemented numerous operational changes companywide. Several years later, one of the company's regional managers asked for help improving the contribution to customer satisfaction made by the region's pickup/delivery drivers and city dispatchers. Previous companywide research had shown these two groups of employees, combined, had 70 percent of the company's daily contacts with customers.

In collaboration with the regional manager, an analysis was designed and managed to answer several critical questions: How satisfied are the region's customers with the job perfor- mance of the region's pickup/delivery drivers and city dispatchers? During the previous year, how many customers stopped using the company because of dissatisfaction with the region's pickup/ delivery drivers and city dispatchers? How much annual revenue did the region lose because customers stopped using the company due to dissatisfac- tion with the regions pickup/delivery drivers and city dispatchers? If customers are dissatisfied with the job performance of the regions drivers and city dispatchers, what are the causes?

The analysis found that a large minority of customers were dissatisfied with the job performance of the regions employees. Some customers were so dissatisfied that they had stopped using the company. This resulted in an annualized revenue loss that exceeded $1 million.

The analysis also revealed that customer dissatisfaction and the loss of customers were caused by weaknesses in the process by which the job performance of these two groups of regional employees were managed. For example, neither drivers nor city dispatchers knew what goals related to customer satisfaction were to be achieved by themselves, their terminals or the region. In addition, a 'no news is good news' feedback system existed, which gave the two groups of regional employees information about customers' level of satisfaction only when a customer was so upset that the customer complained to a manager. These two groups of regional employees were seldom recognized and praised when they did satisfy customers. Finally, city dispatchers and pickup/delivery drivers lacked knowledge required to satisfy customers. Nothing had been done to ensure that city dispatchers had good telephone manners or to prepare the drivers to respond appropriately when customers were upset.

No silver spoons allowed

In the situation described above, the company conducted an assessment of customer satisfaction then reacted to the findings by making changes to its operations. However, the company did not proactively examine its management practices related to customer satisfaction to determine if opportunities existed to improve the management of job performance that impacted customer service.

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