Strategic Planning: Measure Customer Satisfaction
Measurements and metrics abound in companies today, and they are helpful when you are trying to develop strategic plans. Customer-focused metrics are a quick way to determine customer satisfaction. You can benchmark these metrics off industry standards, but more than likely, you know what you want these numbers to be for your company. Are you hitting or missing the mark? Which metrics are the most important to your customers?
Customer-focused metrics are numbers about activities that are important to your customers. You can measure a lot of different parts of your business; some data is meaningful and some is garbage. But if you want to see your business through your customers’ eyes, track the items that they care about. Customer-focused metrics are very company-specific. Ask yourself what your customers find most important. Make sure that you’re measuring it.
Here are some ideas to get your wheels turning:
Volume by customer or client: Track customer sales by dollars or units per month and see whether your customers are starting to order less frequently.
Growth by customers or clients: Customers may be growing significantly, but you also need to watch whether the number of orders from them is increasing. If it isn’t, you may be missing a valuable growth opportunity.
Referral rate: This number is the most important for the growth of your company. If your customers are referring you, they’re happy. If they aren’t, you have a problem.
Time to respond to customer questions and inquiries: How long does it take you to respond to a customer request? Studies show that the longer the inquiry remains unanswered, the cooler the lead gets by 1 percent each day. Slow response time is a big indicator of indifference.
System-up time: This factor measures the percentage of time a company’s equipment or technology systems are up and running to serve your customers. If the product or service is unreliable, it reduces the value in the customers’ eyes.
On-time delivery: If your product doesn’t get to the customer when he expects it, the value of your product is diminished.
Error rate: How many mistakes are made when entering customer orders or delivering completed projects? Tracking your error rate is a good indicator of customer satisfaction. If your error rate goes up, your customer satisfaction likely goes down. Clearly you don’t want that to happen.
Returns/rejects/do-overs: This indicator focuses on how many products or projects come back to you. If you have to fix a problem project or a defective product, it costs your company time and money. And you probably have an unhappy customer.
Overall satisfaction: If you collect customer satisfaction data, make sure to monitor it regularly.
Look how you’re doing in each of these areas compared with where you want to be. This difference gives you a glimpse of your company’s strengths and weaknesses. Determine which customer-focused key indicators you want your business to measure and quantify, establish a baseline of current performance, and then set goals to increase performance in these critical areas.
You can obtain your measures through your internal data sources, such as customer surveys, CRM systems, fulfillment systems, and so on. If you don’t have a source for a metric you want to track, ask an employee to track it for you until you can set up a system to automate it.
Most organizations know what performance they want to achieve for specific metrics. However, if you’re looking for outside validation, check out your industry association. Such associations usually have industry benchmarks.