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Customer Satisfaction Consulting .com
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Listening to the Voice of the Customer
What enables companies to translate customer feedback into positive change? Simple,
they listen to the voice of their customers. In 1994, the Cadillac division of
GM developed the Standards for Excellence process as a way of identifying deficiencies
in service and to gather feedback from their customers. However, the survey process that Cadillac created is unique for it captures data
specific to each dealership, enabling the dealerships to address ways of meeting
specific customer requirements and expectations. After over ten years, Cadillac's
Standards for Excellence is still working. Today, Cadillac has one of the best
customer satisfaction ratings according to J.D. Power. Listening to the consumer is more than just taking surveys, or handing out questionnaires.
It's understanding what the customers wants before the company starts making changes.
It is ensuring that the proper individuals are the ones in charge of making the
correct changes. Listening involves ensuring that the right business elements and
procedures are the ones that are being changed. Listening is the bases of any customer-driven
action. Listening to the customer is a fairly simple process to do and can be accomplished
through surveys. This way companies can measure customer satisfaction and dissatisfaction
to identify main areas of concern for improvement. The next step companies must
take is to look at these areas and implement effective methods of correcting these
problems. Once the new methods are in place, the company then needs to collect
new data to ensure that their course of action is indeed effective and that the
customers are satisfied. Once companies receive high marks for customer service,
they should not then abandon this method. As advanced in technology continue to
improve, and as people change their shopping and spending habits, companies must
also be willing to change with the customer. Therefore, monitoring and managing
the customer experiences is an ongoing process that businesses must be willing to
do. How important is listening to your customers? According to Frederick F. Reicheld
and Thomas Teal, authors of: The Loyalty Effect: The Hidden Force Behind Growth,
Profits, and Lasting Value, published by Bain & Company, Inc. Harvard Business
School Press September 2001. Satisfied customers are 6 times more likely to defect than totally satisfied customers.
15% to 40% of satisfied customer will defect each year.
A 2% increase in customer retention is equivalent to a 10% reduction in operating
costs.
A 5% reduction in customer defection results in profit increases from 30% to 85%,
depending on the industry.
It costs 5 to 7 times more to find new customers than retain customers.
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