Every CEO loves numbers. So when you receive the results from your company’s latest customer satisfaction survey showing most of the performance ratings are at the top of the scale between seven and 10, you might start patting yourself on the back. What you don’t realise is that the glossy chart-riddled report on your desk has lured you into a false sense of security.
Customer satisfaction is now the major differentiator between competitors, so it is not surprising that improving customer experience is a top priority for businesses looking for a competitive advantage. Even better is when your company tops the chart in sector-wide independent research, such as the annual Which? consumer survey. However, the results do not actually reflect the true situation.
This is because most of the survey tools being used to measure customer happiness are simplistic numerical ratings that not only do not provide particularly valuable insights. They are also masking unhappy customers.
In fact, the surveys most commonly used by companies around the world, where customers are asked to rate a firm’s performance on a scale between zero and 10, are frequently mislabelling customers as ‘satisfied’ or ‘loyal’. Our research at the University of Cambridge has found that up to 42% of the supposedly satisfied customers who have given a rating between seven and 10 are unhappy with one or more aspects of the company’s products or services, and may already be considering changing their allegiance to the competition.
Net promoter score does not correspond to customer behavior or even correlate with changes in company revenue.
There are a number of single-question customer satisfaction metrics being used, such as the net promoter score (NPS), customer satisfaction (CSAT) and customer effort score (CES). NPS is one of the most popular and claims to measure a customer’s overall satisfaction with a company’s product or service and the customer’s loyalty to that brand. It simply asks customers a…