If you’ve seen the results from a survey of your customers’ satisfaction, you probably walked away with three things:
What leaders really want from customer satisfaction surveys (or customer focus groups, or any customer feedback collection methods) are answers to those “big” questions. What levers can their organization pull to retain their most profitable accounts and turn customers into raving fans?
Loyalty versus Satisfaction
While measuring satisfaction is a valuable practice for many reasons, research shows that customer satisfaction ratings aren’t necessarily a clear indication of whether your customers will be loyal. In other words, satisfying your customers’ requirements might not be enough to maintain your competitive edge.
However, there is also research that shows that how willing a customer is to recommend you is a good indicator of future loyalty. If your customer is willing to put their own reputation on the line to recommend your product or service, chances are they’re going to be loyal.
Tracking your customers’ willingness to recommend can help you predict which customers are most committed to your organization, but it takes a combination of key questions to get to the drivers of what makes your customers loyal.
Kano’s Analysis: How it Works
Using a method first introduced by Noriaki Kano, regression is used to show which parts of the customer experience are most critical to increase their future buying behavior. A simplified example is shown below:
Step One: Measure customer satisfaction for key performance factors
Step Two: Measure how important each factor is to your customers
Step Three: Measure customers’ willingness to recommend you to a colleague
Step Four: Determine the strength of correlation between the following:
Independent variables (ratings of key factors)
Dependent variable (willingness to recommend)
This analysis will give you a plot of your key performance factors based on a customer’s stated importance (what the customer says is important) and derived importance (what the customer’s behaviors show to be important through the strength of the correlation).
By looking at the relationship between stated and derived importance, each area of performance can be categorized as follows:
No matter how satisfied your customers are with your performance, there are bound to be opportunities for your organization to improve. But not all efforts to please your customers will have equal impact. Using the methods shown above, you can decipher what really drives customer loyalty and allocate your scarce resources – people, capital, time, energy, and creativity – toward efforts that will have the highest potential payoff.