Collecting customer feedback and measuring customer satisfaction has become more common in recent years as customer demands rise and competition intensifies in various industries. Almost without exception, successful companies take some form of customer satisfaction measurements and strive to develop their services to better meet the needs of their customers.
Though this does not mean that the collection of customer feedback and the measurement of customer satisfaction are necessarily yet automated at any level, or that the processes would be well documented. Despite this, surveys are conducted, often at least by hand. It could be said that, in general, the business community is at a stage where the importance of feedback and customer satisfaction has been understood, but there is still room for improvement in the implementation of the collection itself.
At Trustmary, we have developed an easy and effective way to measure customer satisfaction and gather feedback on the need mentioned above, but to be honest, this was not our original idea. And one could even say that while our customers can use Trustmary to solve their challenges of measuring customer feedback and measuring customer satisfaction, we don’t believe that the feedback or measured satisfaction our customers receive should be the primary added value that Trustmary or some other similar tool seeks to provide.
In principle, all companies are trying to make a profit, and the primary goal of customer feedback processes is ultimately to support that. Often, however, companies seem to forget why customer feedback is collected and the actual end results is lackluster.
Customer centricity at the heart of it all
Companies that measure customer satisfaction and collect feedback often have one unifying factor, they are at least to some extent customer-centric. Customer feedback is considered important and customer satisfaction is seen as an important measure of a company’s long-term success.
However, companies that swear by customer centricity can approaching the issue in two different ways, and their perspectives on how customer data and customer relationships should be utilized in growth may even be quite the opposite. This is why customer centricity is such a challenging term. Indeed, how a particular piece of information is utilized is much more important for a good outcome than the collection of the information itself.
In summary, it could be said that the differences between the different approaches become clearer in the approach to business development in general. Some focus on developing the customer experience by improving the service, others on developing the customer experience by focusing on the right customers.
Those who focus primarily on ether approach largely agree that customer satisfaction is a measure of relevant information from which conclusions can be drawn about a company’s future prospects. Thus, it can be said that it is worth measuring customer satisfaction and collecting feedback on the reasons for customer satisfaction.
However, companies that rely on different approaches do not agree on whether all customers should strive to be served well. At first glance, it may seem obvious that yes, customer-centric companies want to serve all customers well, but the fact is that business needs to make choices about the ideal customer profile. To whom is our service designed for and who do we strive to serve well? If we try to serve everyone, we will likely serve everyone mediocre. But if we choose to want to serve a very specific target group really well, we must at the same time choose that we cannot serve those who are outside that target group well.
The essential difference between the approaches will be the diagnosis of the root causes of the poor customer experience. Is the root cause more likely to be in the focus of customer acquisition, or in the processes themselves?
Or perhaps it would be better said that the key difference between the different approaches is the way in which the customer experience is believed to be develop most effectively. By focusing on customer acquisition or developing a customer experience?
Whether you experience the benefits of the data collected most concretely in the development of processes or customer acquisition, we believe the easiest wins can be achieved by leveraging your satisfied customers in your company’s customer acquisition. This does not rule out the possibility that the feedback data itself would otherwise be valuable, but you will certainly get faster results by leveraging your satisfied customers.
Customer driven growth
When it comes to measuring customer satisfaction and collecting feedback and really making the most of it, the process is often divided by us into three stages. These three steps ensure that customer satisfaction is actually translated into sales growth.
Step 1: Find satisfied customers
In the first phase, the measurement of customer satisfaction and the collection of feedback are always put in order. We often like to use NPS (Net Promoter Score), as the primary quantitative measure. In its simplicity, NPS is the following question, which is answered on a scale of 0-10:
”How likely are you to recommend us to a friend or colleague?”
We like NPS for three reasons:
- It tells the potential found in satisfied customers in a concrete way
- It is comparable and there is quite a bit of data to compare to
- It is a fairly studied measure in academic literature
Perhaps the most important reason from these is the first, the discovery of potential. The process we are defining here does not work for companies that do not have satisfied customers. Or it works on the assumption that in this first step, bottlenecks will be fixed first and there will be satisfied customers after that.
In 97% of cases, companies’ customer satisfaction and feedback processes stop there. Or well, feedback is collected and satisfaction is measured at different contact points, which makes a lot of sense, but in other respects the data is just analyzed and the process doesn’t materialize into added value in the business in any way.
However, we see opportunities here. Now that we know who your customers are happy with, it’s time to leverage customers as part of your growth story.
Step 2: Satisfied customers to testimonials and reviews
In the second phase, we set out with our customers to seek testimonials from satisfied customers. On a practical level, the end customer does not see any gap between steps one and two, due to which testimonials are usually obtained with quite high conversion rate when the process is carried out correctly.
The term “review” shown in the image above is one specific form of content you can get from satisfied customers, but what is essential at this stage, instead of the form, is that satisfied customers can be refined into a useful resource for marketing use. No matter the form. It might be short reviews, bigger testimonials, case studies or leads from new potential customers.
The key is to offer satisfied customers the opportunity to give back and also help new customers like him find your business so they can get as much added value as he or she does.
You might think that well no customer is recommending us or no one wants company to really help our company. Well, if your company’s customers are dissatisfied this might be the case, then our process is definitely not right for you. But if you have satisfied customers, we can almost certainly say that you also have customers who are ready to help you.
This phenomenon is often referred to as reciprocity, and for most this phenomenon has probably become more familiar, at least in theory, from Robert Cialdini’s classic work Influence: Science and Practice. Many often think of this psychological phenomenon through things that happen before the purchase decision, but the phenomenon is even stronger after the purchase decision, if the customer is happy with their purchase decision at the time the reciprocity is asked for.
Step 3: Using content got from satisfied customers to increase conversion rates
The final step in our process is the part which is usually almost completely forgotten by our customers before they start using Trustmary. Even if feedback is collected and some sort of resource for marketing is created from satisfied customers, it is often forgotten to leverage that resource created.
When for example testimonials are received from satisfied customers, it is also worth it to leverage them in both sales and marketing. At its simplest, this means adding testimonials on a website, in sales, and in various marketing channels. In our experience, the most important of these is the website. When testimonials are effectively brought out there, they usually flow naturally into sales and other marketing channels, almost without effort.
Well what then, do those testimonials actually do our business any good?
This is, in fact, a question that is rarely asked. The benefits of the testimonials or other forms of social proof are already so obvious to many that they are forgotten to be questioned in an appropriate way. Not that people’s intuition about the significance of the testimonials and other forms of social proof would be incorrect, but we believe it would be useful to understand why things work and why they do not work.
Like reciprocity, the theoretical framework around testimonials and more broadly about social proof, have been brought to attention of most people by Cialdini. Cialdini summed up the phenomenon like this: when people make a decision, they assume that the decisions made by others are the right ones. And if the decisions of others are likely to be right, it is, of course, natural to look at what others have done and act the same way they do.
Regarding the effectiveness of social proof, Cialdini also described that the effect of social proof is dependant on the uncertainty the customer feels. Thus, you can make sales without social proof. But if the customer is unsure of their decision social proof will increase conversion rate.
And if one wonders whether Cialdini invented this theory on his own or whether this has been researched also by other people, it should be stated that the effect of social proof has been studied and documented since the 1950s. Perhaps the best known single study on the subject is a study conducted by Solomon Asch in 1951 in which he sought to test his theory that people adapt to the majority, even if the majority is wrong. We have written more comprehensively about it on our blog: What is social proof and how to use it.
As a summary of the impact of the testimonials and social proof more generally on the website, as well as more broadly in sales and marketing, it could be said that the impact is reasonably well documented in the research data and based on our tests we can conclude that the research translates relatively well into practice.
Of course, we can’t say that in every case, testimonials will increase your website’s conversion rate by 15%. Sometimes it is impossible to measure effectiveness, sometimes the effectiveness is 30%, sometimes 5%. There are also cases where the testimonials do not seem to have a positive effect on the purchase decision for one reason or another.
The impact on a particular business can only be found by testing, but if 10 businesses are taken and the impact is tested in each, then overall the data is in line with the research literature and the impact is clearly positive.