(How) do you measure customer satisfaction?


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Dear Readers,

I will be writing an article on how to measure customer satisfaction in B2B software. To prepare for that article I would like to hear your experiences or read articles that you find useful.

If you have a useful article on the topic, or personal experience measuring customer satisfaction, I would love to hear from you. Please email me directly at customersat@eigenworks.com

Here are some focusing questions:

Do you measure customer satisfaction?

  • Simple question: do you measure it?

What to measure

  • what are your “leading indicators” of customer satisfaction?
  • is customer satisfaction the right thing to measure? what about customer success?
  • how do you measure for referenceability?
  • how do you measure for customer’s liklihood of re-purchasing?

How do you take the measurements?

  • Do you use quantitative measurements? If so, how do you administer these? Direct calls? Web surveys?
  • What kind of response rates do you get to your web surveys? To your phone calls?
  • Have you ever used an external agency? If so, which one(s)?

Have you read any good articles or books on this topic?

Thank you. I appreciate your responses.

– Alan

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18 responses to “(How) do you measure customer satisfaction?

  1. davidwlocke

    Customer loyalty coorelates to repurchase.

    Customer satisfaction coorelates to nothing at all. Have fun measuring it, but you should measure customer loyalty instead.

  2. I have to agree that Customer satisfaction (CSI) measurements are not particularly useful for anything other than comparison with other, competing products.

    There is a saying that you cannot improve what you cannot measure, therefore I would suggest you to figure out what specific areas of your product you would want to improve and than how to measure it.

    If you want to measure how your customers interact with your software, there are some very good analytical tools which would allow a very detail analysis of that.

    • Thanks for your response. There’s an interesting question about whether we should measure *user* satisfaction or *buyer* satisfaction. “Areas of the product” or “how users interact” relate more to users than buyers. In enterprise software, the users are rarely the buyers … so, as always, it will be important to know why you are measuring before figuring out what to measure. 🙂

  3. David, I agree with you. Loyalty, referenceability and repurchase is really the measurement I will be talking about.

    Having said that, the focusing questions I outlined above still apply. What is your take on those?

    thanks,
    Alan

  4. Jim Holland

    Alan –

    This should be a great article and research for product management leadership at large. The prior comments focused on Customer Loyalty and I concur, however, we’ll talk Customer Satisfaction too.

    In my past, Loyalty has been measured by:

    – Client retention
    – % of Support renewal contracts
    – % of Annual subscribers renewals (SaaS)
    – $$ of new licenses purchase from the same company
    – Purchase of services to compliment implementation/etc.
    – Rate of billable services for each client year-over-year

    – Referrals: add-ons sales for new divisions, subsidiaries or groups of the same entity

    – As fun one: the number of times a customer has hired some of your best talent.

  5. Aruna Balasubramanian

    In my opinion these differ when you talk about measuring customer satisfaction for consumer versus enterprise product. In both cases customer retention is a good measure but the ways in which you would go about measuring those and the success you might expect from it widely differ.

  6. I’m a fan of Net Promoter Score. It’s not perfect but in my experience it does the job better than the super-complex but deeply flawed surveys I’ve used in the past. “The Ultimate Question” from Fred Reichheld is worth a read. Note that there is a group of people (academics) that have issues with how”scientific” it is, but frankly I don’t believe the criticisms stand up against the practicality of creating and administering a “statistically significant” customer sat survey.
    April

  7. I concur to all that was said, and would only add another strategic question:

    do you want to measure the customer’s satisfaction regarding the product and/or the service?

    Also it’s allways more telling to measure both the importance AND the performance of each item. So you first ask for the whole list of item “How important is this for you?”, then going through the list again “How does company X perform in this regard?”

    That means of course that your list of item shouldn’t be too long!

    Back to the loyalty, I’ve used a survey that would plot both the loyalty and the satisfaction on a graph, therefore giving you 4 types of customers : Evangelists, Hostages, Mercenaries and Terrorists

  8. Passionate PM

    I agree with April on the Net Promoter Score. It helps determine customer satisfaction and customer loyalty.

    Customers would recommend a product to their friend(s), only when they are satisfied and loyal to the product.

    Cheers!
    Passionate PM

  9. Engagement is another helpful metric. NPS and similar scores focus on transactions, but there is typically something deeper, something connected to one’s values, that keep customers coming back, despite a bad experience now and then.

    my company at http://allegiance.com, collects the transactional NPS and such, but also helps track engagement of your customers and your employees.

  10. I agree with April on NPS. Will the customer puts his name/reputation on the line by recommending your product to another friend or colleague?

    This also captures referencability and is applicable to any product. A dissatisfied customer will not.

  11. Passionate PM

    Including my email for notifications on follow-up comments via email.

  12. Whenever anyone asks me how to measure customer satisfaction, I usually ask them why they want satisfied customers. Repeat purchases, recommendations, and upselling are the most three frequent answers but each require a different measurement system.
    http://alignment.wordpress.com/2006/12/11/measuring-customer-satisfaction/

    Furthermore, satisfied customers are not necessarily loyal customers or profitable customers.
    http://alignment.wordpress.com/2007/10/06/satisfaction-vs-loyalty/

  13. Hi. Did you ever write your article as I would be interested in your thoguhts. Allison