How to Use Customer Satisfaction Scores to Improve Customer Satisfaction and Retention

It’s no secret that today’s most successful, forward-thinking companies keep a close tab on customer satisfaction—they realize how important it is to the success of their businesses, and they’re devoting huge amounts of resources to it. With every online or phone survey, customer comment card and focus group, these organizations’ databases bulge with even more knowledge of exactly how consumers feel about their products and services.

Anyone who’s ever completed a survey about his or her satisfaction with a business is familiar with the metrics of a typical questionnaire. For each element of customer satisfaction being measured—Price, Overall Value, Customer Service, for example—you might be asked to rate a company along of scale of 1–5, representing Excellent, Very Good, Average, Below Average or Poor. Whatever the topics or rating scale, it’s important that management’s strategic priorities are reflected in every survey item.

On the surface, it’s a simple system. Scores are tallied and aggregated with those of other respondents deep within company servers. From there, the data is compiled onto customer-satisfaction scorecards providing at-a-glance reviews of the organization’s overall performance.

Collecting Customer Satisfaction Data is the Easy Part

Having comprehensive data on customer opinions is valuable to any firm—but the information is only as powerful as what’s done with it. So, how do companies turn that information into action, with working initiatives to address customer-satisfaction weaknesses and build on corporate strengths? In the eyes of industry experts, this is where many companies fall short on following through.

According to Lynda Gratton, Associate Professor of Organisational Behaviour at London Business School and Dean of the full-time MBA Programme, “The attraction of balanced scorecards is to help translate strategy into the stories, business logic and tasks that grab people’s imaginations and so result in purposeful action. Yet, too often, it hasn’t worked that way.”

Customer-satisfaction scorecards and metrics are part of new approach to strategic management developed in the 1990s by Drs. David Norton and Robert Kaplan of Harvard Business School. The “Balanced Scorecard” is more than just a measurement system; it’s a new management system that helps companies translate vision and strategy into action. In addition to Customer Perspective ratings, it suggests that organizations be viewed from the Learning/Growth Perspective, The Business Process Perspective and the Financial Perspective.

Converting Information to Strategy is the Key

When deployed properly, the balanced scorecard breathes life into the essentially academic exercise of collecting customer data. It’s where companies can convert information into action.

Following are just a couple recent examples of how leading companies are putting customer satisfaction metrics and scorecard rankings to work.

Dell Computers—Driving Compensation through Customer Service Scores

Dell Computers is legendary for its customer satisfaction rankings. Historically, the computer maker’s customers expected lesser technical skills from Dell-badged and partner technicians. But, as customer expectations rose to match those of larger, more diverse support organizations, Dell was able to increase customer satisfaction levels at the same time.

How? Simple—by using customer satisfaction scores to directly drive bonuses paid out to Dell partners. Before, these organizations had been compensated solely on response time, regardless of the customer experience. In a vertical industry with paper-thin margins, the new, satisfaction-based bonuses are substantial enough to significantly influence partner performance.

Perhaps even more importantly, an important new metric has been added to Dell’s customer satisfaction scorecard: staying on-site until a customer’s challenge is resolved—and confirmed so by the customer. This initiative is more than just a checkbox on a questionnaire; it’s become an integral element of Dell’s customer-satisfaction culture. Today, it’s in the back of each technician’s mind during every service call.

ING Bank—Using Satisfaction Scorecards to Track Customer Retention

ING Bank in Amsterdam, Netherlands, decided to implement its new scorecarding application amid an internal reorganization, convinced that it was the best way to measure client retention and the performance of its entire the commercial process.

The bank currently uses balanced scorecards for strategic quantitative and qualitative measurement. A different scorecard application is used for remote users, using the same data as in-house managers, so both groups work from the same information. “We have more focus on the commercial effectiveness of managers, and it’s an integral part of the information management that higher-level employees see,” says Popko de Vlugt, ING Bank’s head of management accounting and an internal scorecard expert.

Adds de Vlugt: “We want to have scorecards as an integral part of the commercial process and the banking process. It shouldn’t be just a list.”

Tying it All Together to Improve Key Performance Metrics

One of the biggest challenges in implementing scorecards is to avoid “piecemeal” deployment, in which the applications are installed only in disparate parts of the organization first. As scorecards become more prevalent, explains Henry Morris, IDC VP of data warehousing and knowledge management, companies soon realize the need to tie the various applications together.

Doug Laney, vice president of application delivery strategies at Meta Group, says that scorecarding can help companies learn which aspects of their business need the most concentration.

“We found that the most important key performance measures were not related to profits—they were related to a company’s service levels and product offerings.”

Tools and Information You’ll Need for a Successful Implementation

Now that you know the value of a balanced scorecard strategy, where do you start? There’s no shortage of information on the Web about customer-satisfaction metrics, scorecards and the tools today’s companies are using to take advantage if increasingly detailed data.

Here are just a few areas for you to begin exploring (courtesy of Distributive.com’s informative Web site):

  • New scorecard technologies: New, improved application releases are extending companies’ performance management capabilities. One example is DataDrill 2.2, with a proprietary StrategyCenter that helps implement scorecard management throughout all organizational levels by aligning daily operations with strategic, results-oriented plans.
  • Free webinars and other training: A Web search for “scorecards” and “seminar’ or “webinar” will return valuable information on free training events, such as the calendar you’ll find at: http://www.distributive.com
  • Independent educational institutes: The Balanced Scorecard Institute provides training and guidance to help government agencies and companies implement best practices in balanced scorecard and performance measurement for strategic management and transformation. Learn more at: http://www.balancedscorecard.org

A survey/feedback solution can help you survey customers and employees, gather data, conduct powerful online analysis and implement change to improve satisfaction scores. It’s not an end unto itself—it’s part of the never-ending cycle of constant business improvement.

For more information including how you can put customer satisfaction metrics and scorecards to work for your business, contact us today!