Customer Satisfaction Approaches: One Size Does Not Fit All
Books on business success can lead you to believe that a successful singular approach exists for satisfying customers, but in reality, it does not. Why not? Because customers are individuals and individuals have different needs and motives. Robert MacGregor and Debora Bunker, in an article published in the Journal of Real Estate Practice and Education, discuss the importance of identifying client’s needs. In a qualitative study conducted by the authors, they found that identifying the needs of the customers was critical for business growth. How can you meet someone’s needs if you don’t know what they are?
Psychologists define need as a psychological feature that arouses an organism to action toward a goal, giving purpose and direction to behavior. Needs range from those that are basic, physiological in nature, and required for survival (food, air, water, etc.) to those that are focused on growth, such as the need to become all that we can be. Motives are related to needs. Motivation refers to the reasons a person engages in a particular behavior. Sometimes these reasons are related to needs, while at other times they are related to desires or other reasons such as altruism. Motivation can be described in terms of its initiation, intensity, and persistence.
Initiation refers to the start of a particular behavior. As an example, a woman who is in real estate recently received a telephone call from a couple who said they wanted to purchase a home and they were interested in working with her. Since they had not mentioned that they had been referred by someone, the agent asked “What made you decide to call me?” What this real estate agent actually wanted to know was how their behavior of working with her was initiated. There are thousands of agents to choose from in the large metropolitan area where she works so how did they pick her?
Intensity refers to the amount of effort we put forth in pursuing a particular course of action. The woman in real estate witnesses various levels of intensity with her clients. Some are very eager to commit to doing business with her right away. They have no qualms about signing an agreement and eagerly accompany her to look at houses or quickly list their houses for sale. Other clients seem only mildly interested in selling or buying. They are reluctant to sign an agreement and do not make a lot of effort toward finding a buyer for their home or locating a home to purchase.
Persistence refers to the length of time an individual pursues a behavior. For example, some clients who are trying to find a home give up if they do not find their dream home within the first week. Others are willing to continue searching for the house of their dreams for a year or more, refusing to settle on something less than perfect and refusing to give up.
We all want consumers to choose our products and services (initiation). We also want them to pursue doing business with us with intensity; in other words, we don’t want them to vacillate back and forth between our product/service and someone else’s. Finally, we want a high level of persistence. We want to keep our customers satisfied and coming back to us, rather than dissatisfied and leaving (lack of persistence) to do business with the competition.
Q: How do we ensure initiation, intensity, and persistence of customers? A: Know what the customers want. Q: How do we find out what our customers want? A: Ask them. Knowledge is power. If you gain knowledge of what your customers want and what will keep them returning to your business, you are on your way to a “custom fit” approach to customer satisfaction. In an article titled “Service quality, customer satisfaction, and customer value: A holistic perspective,” published in the journal Hospitality Management, author Haemoon Oh describes research that indicated ignoring customer values and satisfaction results in reduced repeat business. Professor Oh also stated that when conducting customer surveys, it is essential to measure perceptions of service quality, the customer’s perceived value of the service, and overall satisfaction because this data will have high predictive value in terms of customer behavior.
Customer research has been usefully applied in the real estate industry, both with the customers of agents and with the agents themselves, as customers of realtor associations. Pratibha Dabholkar and Jeffrey Overby conducted an investigation of the service provided by real estate agents. Their study, published in the International Journal of Service Industry Management, indicated that customer surveys can provide information that can lead to increases in customer satisfaction and can also help companies identify where to invest their resources for maximum effect; information particularly helpful during tough economic times. While we need to invest in our customers to increase satisfaction and intent to return, we want to make sure this investment is well spent. Rather than simply guessing at what drives our customer’s behaviors, customer research can identify drivers that customers themselves may not even be aware of since much of our motivation is unconscious.
Next, let’s look at a specific example of how customer research can provide vital information for getting a “custom fit” for customer satisfaction. Recently, the National Business Research Institute (NBRI) conducted a customer survey for a realtor association. NBRI received survey responses from almost 20% of the association’s customers and was able to statistically achieve a 95% confidence level with a 5% sampling error at the total population level. This gave the association confidence that the results of their survey were valid and representative of the customer population.
The customer survey provided the following information for the realtor association:
- overall performance score: this score is obtained by benchmarking the responses of this company’s customers with those of over 250,000 other customers from the same industry. This overall performance score lets the association know how they rank when compared to other companies in their industry. Categories are determined by percentile ranking: a Strength includes any ranking from the 75th to 100th percentile, with any score at the 90th percentile or above indicating a Best-in-Class ranking. Opportunities are scores falling from the 50th to the 74th percentile; Weaknesses include the 25th to the 49th percentiles; and Threats fall from the 1st to the 24th percentile. The 50th percentile represents the national average. The realtor association had an overall performance score at the 68th percentile, 18 percentiles above the national average.
- topic analysis: the benchmarking information now becomes more detailed by indicating how the realtor association ranks when compared to other similar companies on each topic included in their survey. For example, in the area of Employee Behavior, the association ranked at the 79th percentile. This was the only topic that scored in the Strengths category and no topics scored in the Best-in-Class category. Seven topics ranked in the Opportunities category and no topics fell in the Weaknesses or Threats categories.
- item analysis: this analysis provides benchmarking information for each item on the survey. The association had eight items in the Strengths category, but none reaching Best in Class. Sixteen items fell in the Opportunities range, three in the Weaknesses category, and no items fell in the Threats category.
- root cause analysis: while all of the previous analyses provide valuable information, the root cause analysis is the most valuable of all. This analysis identifies the drivers of overall satisfaction and intent to return. Thus, the association was able to learn the few items that are really driving the behavior of their customers. Three different root causes were identified for overall satisfaction. They included:
- My membership in the association is of value to me.
- The association provides me with accurate information.
- The association helps me maintain my license.
Three root causes were also identified for intent to return:
- The association’s staff is friendly.
- The annual membership dues are reasonable.
- The association’s website is a good source for the latest news and events.
Armed with this information, the association now has the power to make changes that will enhance the perceptions their customers have of their business. By making the necessary changes to enhance these perceptions the association can obtain a “custom fit” for customer satisfaction. Although the association’s overall performance score was above average, they still only rank in the Opportunity category. Would you be excited to learn that your company, when compared to the competition, is slightly above average? I am sure that just like the executives in this association, you would prefer to be in the Strengths category or, better yet, Best in Class. This realtor association now has the knowledge and the power to make that change happen.
If you would like to learn more about how NBRI can help your company obtain a “custom fit” for customer satisfaction, call us today at 800-756-6168.