I heard alarm bells ring inside my head when I read a recent article by J.D. Power and Associates that stated customer satisfaction with property claims increased in 2011 to 833 on a 1,000-point scale. That is roughly 8.3 on a 10-point scale. The photo that accompanied the article showed a woman with a big happy smile. I am assuming this is viewed as good news.
That’s my concern. 60% to 80% of us switch to a competitor even though we are “Very” or “Highly” satisfied with the current company. Satisfaction has no glue.
Based on work I did for AT&T during the time it was breaking into the Baby Bells, they conducted a customer satisfaction study (scale was 1 = Poor, 5 = Excellent). The results showed that 94% of their customers gave the telephone company a rating of 3, 4, or 5, yet the company was losing market share.
We were asked to track individual customers for approximately three years. What we discovered was shocking. Of the customers that gave a rating of 3, 50% stayed and 50% left. So satisfaction alone is needed to be in the game, but it has no staying power. Of those who gave a rating of 4, 85% stayed and 15% left. Of the customers who gave the company a rating of 5, 94% stayed and 6% left.
Subsequent to this study, we discovered that when a Client gave a satisfaction score of 4.7 or higher (which was calculated based on their response to four different questions), the Client was six times more likely to stay, six times more likely to refer, and six times more likely to cross-buy. Those Wow!, delight, superb, “over the top” satisfaction levels are something to cheer about because Clients who give these ratings become your unpaid sales force. Isn’t that what you really want?
For some companies, this is not their strategy, or it seems too high, or they say, “We could never reach that level.” Well, it is possible, it is being done, and it works. It depends on your making a choice to become a truly outstanding company. It is a simple decision and focus – and with that, magic can happen.