Beware of customer satisfaction. By itself, it doesn't always win. Years ago, it was good enough to provide customers with an acceptable product, on time, at a competitive price. Today, that's the least that's expected. In most cases, the product has become a commodity, perceived by the buying community as available from several resources.
The subject of competitive differentiation, the vehicle for providing the perceived value that can overcome the price issue, will be addressed in a future column. This column's message: the danger of misinterpreting expressions and signals of customer satisfaction.
First, don't believe that all is well simply because there are no active problems or complaints. It's interesting to note that most of the companies cited as paragons of customer service leadership in Tom Peters' book, In Search Of Excellence, are out of business or have compromised their reputations. A satisfied customer and a delighted customer are two different things.
Many distributors and manufacturers are lulled into complacency by customer feedback. This is especially true of customer surveys. It's a fundamental error to ask customers about your organization's performance. Instead, respondents should be asked about your organization's performance compared to other suppliers they've used. The latter is about the buying decision. In an environment in which your products are likely to be seen as commodities, customers may assign superior ratings of specific performance factors to each of their suppliers.
In their landmark Harvard Business Review article, "Why Satisfied Customers Defect," David Jones and W. Earl Sasser point out that about two-thirds of customers that defect are satisfied. They defect because another resource provides a unique perceived benefit.
Research is valuable, but beware of interpreting feedback from face-to-face or telephone interviews. The level of candor tends to be lower than feedback from mail surveys. A recent survey of print buyers indicated that about half didn't share the reasons they changed suppliers. With a belief that there's a plethora of good suppliers, many buyers find it easy to defect and see little need to run the risk of creating an unpleasant discussion with the previous supplier.
When surveying customers, bear in mind that the respondents all are favorably disposed toward your organization. That's the reason they're your customers. Don't generalize the feedback to the marketplace in general.
There's one area of feedback that, unfortunately, is seldom solicited. Certainly, few salespeople generate as much new business as they would like, but they're selling to new customers. You can learn from successes as well as failures, so it's helpful to interview accounts three or four months after they place their first orders. Ask why the new customer opted to drop an existing supplier to do business with you. What did you do or say to cause the decision? What has been the customer's experience since becoming your customer? This feedback can be critical in developing other new accounts.
Beware of the word "satisfied." Try to ensure that there's a prominent reason for doing business with you. An absence of dissatisfaction isn't a good reason when the product or service is seen as a commodity.
Contributing Editor Dick Gorelick is an award-winning authority on sales, marketing and business strategies for the printing industry. As president of the Graphic Arts Sales Foundation in West Chester, Pa., he travels extensively, consulting, writing and speaking on sales training.
