All Posts Tagged With: "customer satisfaction"
Does Your Company Create Real Value?
According to a recent survey of 50,000 consumers in 14 countries including the US, 70% of the brands we interact with could disappear entirely and we wouldn’t notice it.
The survey also found that 20% of the brands we interact with have a positive impact on our lives.
Which list would your company make? (You can see two Top 10 brand lists at the end of this article.)
Umair Haque, director of the Havas Media Labs, explains the difference: “Did this brand make you fitter, wiser, smarter, closer? Did it improve your personal outcomes? Did it improve your community outcomes? Did it pollute the environment? We’re trying to get beyond ‘did this company make a slightly better product’ to the more resonant, meaningful question: Did this brand actually impact your life in a tangible, lasting, and positive way?”
I’ve written before about corporate social responsibility and how companies are embracing it to gain a competitive advantage (here and here), which is one part of the conclusions drawn by the Meaningful Brands survey and Haque. The other part is that companies are creating enduring brands by creating value for their customers, making them “fitter, wiser, smarter, closer,” to use Haque’s description.
This is where integrating the Baldrige model can help. The Baldrige Criteria ask key questions about understanding who your key customer groups and market segments are, what each requires, and how you meet and exceed those requirements. The Criteria ask how you build and manage relationships to acquire new customers, build market share, retain customers, and exceed…
10Nov2011 | Steve George | 0 comments | ContinuedBaldrige Model: How do you engage customers to serve their needs and build relationships?
Item 3.2 in the Baldrige Criteria asks key questions about how you support your customers and build relationships with them. The following processes, best practices, and problem areas look at critical issues in this part of the Baldrige model.
Your organization needs processes for:
- Identifying customer and market requirements
- Identifying and innovating products and services to enter new markets, attract new customers, and expand relationships with existing customers
- Enabling customers to seek information and customer support, conduct business with you, and provide feedback
- Determining and deploying the key support requirements for each customer group
- Determining which market customers and markets to pursue
- Using customer, market, and product/service information to improve marketing, build a more customer-focused culture, and innovate
- Build customer relationships and market share
- Manage customer complaints to resolve them promptly and address the causes of the complaints
Best practices to consider:
- Since people in the organization deal with customers daily, they assume that they know what customers require but have never validated their assumptions, which is a critical first step to improving customer satisfaction and loyalty.
- New product and service development processes involve customers in evaluating ideas and features.
- The organization also involves customers in identifying support requirements, which are then deployed to all employees who interact with customers, with measures of performance on those requirements in place and reviewed.
- Determining which customer groups and markets to pursue and which products and services to provide is an ongoing, strategic process that builds on core competencies and innovation.
- Understanding that very satisfied customers are much more loyal than satisfied customers, the organization identifies exactly how…
K&N Management’s Baldrige Journey
K&N Management was named a recipient of the 2010 Baldrige Award, the second food services company to win the Award—and it learned many of its best practices from the first food services company to win the Award. You can read about K&N Management at its Web site here.
The company owns four Rudy’s Country Store & Bar-B-Q stores and three Mighty Fine Burgers, Fries and Shakes, all in or around the city of Austin, Texas. Co-owners Brian Nolen and Ken Schiller started the company in 1993 after a successful partnership in the insurance industry. They went into the restaurant business because they liked the idea of a business where you could distinguish yourself from your competitors—which they have certainly done:
- Gross profit exceeds the industry standard
- Overall guest satisfaction ratings of 4.7 exceed the best competitor’s rating of 4.0
- Order accuracy rate of nearly 100% compared to the industry average of 87%
- A 92% record of passing health department inspections compared to 86% for competitors
- Food costs as a percent of sales 3% below those of similar restaurants
- Turnover rates better than the industry averages
- Absentee rate slightly more than 1% exceeds the 3.5% of benchmarked organizations
K&N Management’s search for excellence led them to Pal’s Sudden Service, which won the Baldrige Award in 2001. To help share the secrets of its success—a requirement of Baldrige Award winners—Pal’s established Pal’s Business Excellence Institute (BEI), which provides training and consulting. You can learn more about the Institute here.
K&N Management brings its entire management team to Kingsport, Tennessee, the home of…
4Jan2011 | Steve George | 0 comments | ContinuedBest Practice in Measuring Customer Satisfaction
This is a best practice in the measurement of customer satisfaction courtesy of CDW, one of America’s largest private companies with technology sales of more than eight billion dollars in its most recent fiscal year.
CDW had been using Net Promoter to measure customer satisfaction and brand health. You get a Net Promoter Score by asking one question of your customers—How likely is it that you would recommend your company to a friend or colleague?—and then grouping the responses by promoters (those who answer the question with a 9 or 10), passives (7-8), and detractors (0-6). You subtract the percentage of detractors from the percentage of promoters to get your Net Promoter score.
This has been a leading edge measure for many companies because it helps them identify opportunities to improve customer satisfaction. CDW decided that Net Promoter was too one-dimensional so, with the help of the person who developed Net Promoter, it went to a three-question approach that, according to Calvin Vass, CDW’s senior manager of research, looks at “different dimensions of the relationship; what the customer plans to purchase with us, if they are committed, and what they would do if we went away.” Vass is quoted in “Is Net Promoter Really the Ultimate Question?” by Drew Neisser (Fast Company, October 20, 2010).
CDW segments its market into two groups, Active Customers and Less Active Customers. It surveys the first group quarterly, receiving more than 100,000 surveys per year. It surveys the second group monthly with more than 800,000 inquiries annually. “We…
21Oct2010 | Steve George | 0 comments | ContinuedSeeking Very Satisfied Customers
According to a recent survey by American Express, most Americans are willing to spend an average of 9% more with companies that provide excellent service. The American Express Global Customer Service Barometer survey suggests that not many companies are taking advantage of this opportunity: Nearly half of the respondents said companies are helpful but don’t do anything extra for them, while 21% believe that their business is taken for granted. A little over a third think that companies have increased their focus on providing quality service in the current economy, which is higher than I would have expected considering all of the layoffs and the added pressure that puts on the people who remain.
One of the adages about customer service is that people are much more likely to talk about a bad experience than a good one. The survey contradicts that notion, finding that consumers will talk about a good experience 75% of the time but complain about a bad one 59% of the time. If that’s the case, companies should be investing more in delighting their customers rather than just avoiding a bad experience.
When it comes to your online image, the survey found that consumers put more stock in negative reviews on blogs and social networking sites (57%) than in positive ones (48%), but the percentages are close enough that positive and negative reviews are both important.
The Baldrige Criteria ask several questions about how you build customer relationships including how “you create an organizational culture that ensures a consistently positive…
28Sep2010 | Steve George | 0 comments | ContinuedPlaying to Win Customers
It’s an old question—“What will help us attract and retain customers?”—with a very new answer: gaming. In “Play to win: The game-based economy” (Fortune, September 3, 2010), JP Mangalindan describes companies that “study and identify natural human tendencies and employ game-like mechanisms to give customers a sense that they’re having fun while working towards a rewards-based goal.” Companies don’t do this because they want their customers to have fun; they do it because it helps them attract and retain customers, which increases their revenues.
If you’re wondering how “gamification” might apply to your company, consider Mangalindan’s examples:
- Mint.com made personal finance a game. You can set a financial goal online and track your performance toward achieving it. You can check out your total financial score, which encourages financially responsible behavior. You can even compete with other members who have similar goals. If you think that sounds lame, think again: Mint.com claims more than 1.5 million active users.
- Nike sells a pedometer (Nike +) that you put in your sneakers. It monitors distance, pace, and calories burned and transmits the data to your iPod. The Nike software on your iPod “rewards” you if you reach a milestone. For example, if you run and you best your 5-mile distance time, Lance Armstrong congratulates you via audio clip. Nike has sold more than 1.3 million Nike + units.
- Foursquare is a mobile social network that “rewards” users with virtual badges. For example, check into a location the most and you become that spot’s “Mayor.” Foursquare has more than…
Trader Joe’s Secrets
Yes, they really are secrets. Trader Joe’s doesn’t divulge information about its management system or its strategies or its success. So Fortune spent two months talking to people who have worked for the company, competed against it, analyzed it, and supplied it (click here for article). This is what they found:
- Trader Joe’s is roughly the same size as Whole Foods. It is owned by Germany’s Albrecht family but still managed by its founder.
- The company is very selective about where it puts new stores. It’s only adding five locations this year. It looks at demographics to choose sites in places that fit its distribution infrastructure.
- Trader Joe’s offers a limited selection of products. Typical grocery stores carry 50,000 SKUs; Trader Joe’s sells about 4,000, about 80% of which bear the store brand. “With greater turnover on a smaller number of items,” Fortune writes, “Trader Joe’s can buy large quantities and secure deep discounts. And it makes the whole business—from stocking shelves to checking out customers—much simpler.”
- Trader Joe’s pays its suppliers on time without the extra charges for advertising, coupons, or slotting fees that other supermarkets charge.
- The company buys directly from manufacturers that ship straight to Trader Joe’s distribution centers, which ship daily to stores. The stores don’t carry much inventory so ordering must be precise.
- Store managers can make low six-figure incomes while full-time employees can start at half that, and Trader Joe’s annually contributes 15.4% of employee’s gross income to tax-deferred retirement accounts.
- Trader Joe’s is becoming more corporate. As a former employee observed, “You…
