Customer satisfaction is tied directly to profitability. If your customers are happy they tend to be loyal. If they’re loyal they not only buy more, they refer other customers. Well-established research by Bain & Company found that, for many companies, an increase of 5% in customer retention can increase profits by 25% to 95%. The same study found that it costs six to seven times more to gain a new customer than to keep an existing one.
Moreover, one bad experience can outweigh a whole lot of good experiences. Because of e-mail and social media, that bad experience can quickly be broadcast to dozens, hundreds, or thousands of other customers, magnifying its impact. So if your business is doing something that frustrates customers, you need to know right away.
It is critical to give customers the opportunity to provide feedback about their overall satisfaction level and specific likes and dislikes. It is equally important to consistently measure and monitor that input. Without an effective customer satisfaction research program in place, your company will be losing business, missing opportunities, and putting itself at a competitive disadvantage.
Many companies wonder how frequently they should conduct customer satisfaction surveys. The answer depends on the size of the customer base and the purpose of the research. There are two key types of surveys, and they serve very different purposes:
– Transactional surveys solicit feedback directly from the product or service user about that particular encounter. They are conducted immediately after each customer transaction. For example, a survey may be administered after a call center experience.
– Relationship surveys collect input from people who have an ongoing relationship with the company and have had multiple transactions. They are regularly scheduled surveys, often quarterly. The respondents typically are responsible for deciding whether to continue the working relationship.
Transactional surveys are sent out at the discretion of whoever has contact with customers – but the data should be collected immediately after the interaction while the experience is still fresh in the customer’s mind.
Relationship surveys should be spread out over the course of a year. Here are a couple of points to keep in mind:
– If there is only one data point for each year, a single event could have a large impact on results
– For companies with a sufficiently large customer base – at least 10,000 – relationship surveys can be conducted on a continuous basis but reported on a monthly basis to address the effects of seasonality or single events
In many cases conducting both transactional and relationship surveys may be appropriate. For example, a company may conduct transactional research for customer service purposes and relationship research for routine checkups on the health of the business.
For pre-designed customer satisfaction survey templates visit the Zoomerang Customer Satisfaction Center. You can also find more online survey tips here at the Zoomerang blog to help you make your survey experience as successful as possible.