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Many Ways to Track Customer Satisfaction

Executive Rountable

Business Owners, Company Presidents and CEOs Share Advice

June 24, 2001

TEC Worldwide is an international organization of more than 7,000 business owners, company presidents and chief executives. TEC members meet in small peer groups to share their business experiences and help one another solve problems. The following questions and answers are based on discussions at recent TEC meetings in Southern California.

Q: I believe in tracking customer satisfaction. We conduct customer surveys twice a year, but I think we can do more in this area. What else should we be tracking and/or measuring?

A: In today's highly competitive markets, smart companies make every effort to stay in touch with their customers.

When properly designed and implemented, customer surveys offer a simple and cost-effective method for keeping in tune with what your customers are thinking about your company and your product or service.

They don't tell the whole story, however. Howard Hyden, president of the Center for Customer Focus in Colorado Springs, Colo., recommends that in addition to surveys, companies monitor a handful of operational indicators that correlate with customer satisfaction levels.

These include:

* Time-to-answer inquiry. When a customer calls to request information or place an order, how long does it take your company to respond?

* On-time delivery. What percentage of your products show up at the customer's door when you say they will (or sooner)?

* Volume by customer. Track each customer's sales by dollars or units per month to determine whether key customers are ordering more, less or about the same. A decline in orders by your top customers could indicate growing levels of product or service dissatisfaction.

* Customer turnover rate. How much repeat business do you get from current customers? How many customers place one or two orders and never come back?

* Error rate. How many mistakes do you make each month when processing, delivering and invoicing orders? A high error rate may translate into customer dissatisfaction.

* Returns and rejects. What percentage of sales are rejected or returned by customers?

* Referral rate. What percentage of your new business comes from referrals by existing customers?

* Customer complaints. How many complaints per 100 orders do you receive? Is the number growing or declining?

In addition to serving as quantifiable measurements of customer satisfaction, these indicators also provide an excellent tool for managing the business.

Moving the needle in a positive direction in these areas will not only enhance customer satisfaction levels, they also will improve important operational efficiencies.

If you find that most of these areas need a major overhaul, don't try to accomplish too much at once. Instead, select three to five key indicators, establish a baseline of current performance and set goals to improve performance in these critical areas.

Once you have achieved a certain measure of success, begin branching out into other areas.

Remember that employees pay attention to what you pay attention to. By monitoring and measuring these key areas and rewarding for improvements, you can build a culture in which paying attention to the customer becomes standard operating procedure.

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Q: I have no problem setting goals for my small manufacturing company, but when it comes to my personal life, I never seem to get the results I want. Like most people, I start out with good intentions but I always seem to lose momentum and end up back where I started. What can I do to achieve better results?

A: According to Rick Houcek of the Atlanta-based consulting firm, Soar With Eagles, most people fail to achieve their personal goals for three main reasons: lack of passion (pursuing someone else's goal), lack of precision (fuzzy goals produce fuzzy results) and setting goals at cross-purposes with your self-image (unconsciously you don't believe you deserve to attain them).

To overcome these obstacles, he recommends the following process:

Start by separating your goals into distinct categories, such as health, family, personal development, spiritual or social.

Then set SMART (specific, measurable, achievable, reviewable and time-dated) goals in the areas you wish to improve.

Break large goals into bite-size pieces so they become more manageable. Instead of aiming to become the perfect specimen of health, for example, set a couple of focused, realistic goals, such as losing 10 pounds and lowering your blood pressure a certain number of points.

Once you attain those, choose a different set of goals that will improve your overall health. Set a target date to achieve each goal.

When committing your goals to paper, write that day's date and the target date for achieving the goal. Track your progress toward the goal and write the date you reach it.

Keep in mind that a goal without a target date is merely a dream. List the benefits of achieving the goal, including how good it will feel when you check the goal off your list. If no significant benefits come to mind, you may need to identify a more worthwhile goal.

Identify potential obstacles and their solutions. Anticipate as many problems as possible so when they occur you have a strategy for dealing with them.

Use positive affirmations--written, verbal or visual declarations of something you believe or expect to become true--to overcome any negative self-talk. State your affirmations in the present tense, as if you already have achieved the goal, and review them three times a day.

Finally, consider this process a written contract with yourself. Document every step and sign your name at the bottom. Enlist a support group of spouse, friends and business associates to cheer you on, and be sure to celebrate every time you achieve a goal.

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If there is a business issue you would like addressed in this column, contact TEC at (800) 274-2367, Ext. 3177. To learn more about TEC, visit http://www.teconline.com.

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