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96% Satisfaction == 40% LOSS!

Posted on February 17, 2010 , by Steve Bernstein
CATEGORIES: Loyalty Research

Everyone seems to be talking about “Customer Satisfaction” in one form or another. The most common is the claim that goes something like, “We can prove that our customers love us — we have a 96% Customer Satisfaction rate!” Why do they do this — does anyone care?
Let’s assume they are telling truth, that 96% of the people that responded to their survey were “Satisfied” or “Very Satisfied.” Here are a few questions:
• Satisfied with what? A recent service experience? The product? The company?
• Who responded to this survey anyway? Did they send the survey invitations to all their customers, or just a sample? How did they choose who got the survey, and how did they encourage customers to respond?
• What about the people that didn’t respond to their survey…don’t we care about what they think? Did those people not respond because they are less happy, or because they don’t care (i.e. they have no relationship with that company)? Neither case seems particularly good.
And here’s the REAL news: A 96% satisfaction rate means that 4% of respondents were DIS-satisfied. Now assume every unhappy customer tells 2 people and every happy customer tells 1 person. And assume it takes 5 positive reviews to overcome one negative review (I don’t think I’m the only one who reads those product reviews on Amazon).
Now imagine you are at a cocktail party and look at the results: The 4 people in 100 that are dissatisfied could easily be destroying the goodwill of 40 happy customers! All of the sudden that 96% customer satisfaction rate is nothing to brag about.
So which do would you rather have:
1. Quietly accruing more and more customers as your customers become an extension of your workforce (real growth that organically boosts company valuation / money for you)
2. Telling everyone how satisfied your customers are and plodding along at an industry average rate?