Linking Customer Satisfaction Measurement to Financial Performance

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One of the main benefits of Customer Satisfaction research is provided through the capability to observe trends on indicators that are directly tied to financial performance.  Companies can use ongoing measurement as an early warning system to monitor and detect drops in performance and to determine how to take corrective action.  When performance is stable or trending upward, market position may be considered and calculated risks may be contemplated with respect to the competitive environment.

Under the best circumstances, increased performance in service delivery should be celebrated.

As there are many external factors affecting a company’s financial performance, the capability to observe ongoing performance allows a perspective into the customer viewpoint that can be used to increase awareness regarding overall financial performance.  A key benefit is reduced risk.  While planning matters require a stable environment, the measurement can provides an additional perspective and increased confidence to determine if the time for change is right or wrong.  Customer satisfaction is sensitive to changes in the market place and can warn of a competitive threats and pressures.

In addition to a perspective into key service indicators, a view into the basic health of customer relationships is provided through customer retention and loyalty measures.  These are the early warning measures that are important to track.  Valuable insights pointing to the cause and effect of altering these measures often indicate market shifts or other economic impacts which can be anticipated.

The key is to know when and how to react.  Of course, the business climate is also important.

Science – First, there needs to be recognition of the fact that Customer Satisfaction research relies on scientific methodology.  The research methodology requires reliability to predict the degree of sample representation compared to the total population measured.  Statistical reliability and confidence levels are the key components of research findings when significant differences are reported between distinct populations.  From a practical standpoint, the overall reliability of the data collected is fully dependent upon specific procedures to ensure validity.

 

Benefits – Remember that the outcome of a successful program is more than just a measure of Customer satisfaction.  The results can also be tied to Brand Equity and an assessment of standing within the competitive environment.  It is also recommended to be sure to evaluate findings against competitive benchmark data for a comparative viewpoint.

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