I propose that businesses should adopt an approach of publicly reporting on customer delight/satisfaction in the same way that financial performance is reported today. In turn businesses that perform well on customer delight should expect to be rewarded with a loyal customer base and more profitable future outlook.

Problem

While it is reasonably easy for anyone to find the latest financial performance data for a major corporation it is next to impossible to find any metrics on customer satisfaction. I believe the absence of customer satisfaction data on company websites, yearly appraisals, and end of year financial reports is sending all of the wrong signals to employees, customers, and even investors.

Solution

My hack relates to measurement. In my experience what gets measured gets focus. It’s a hackneyed cliché but like most clichés it rings true because there is truth in it. Most businesses measure financial performance. Those measurements drive behaviours. There may be other measurements that look at customer satisfaction, brand affinity, and so on but these are mostly used for internal consumption and are rarely seen by customers. In my experience this sort of information usually goes no further the sales and service teams.

Reporting on customer satisfaction to an external audience has a purpose. I argue this because I believe that for many businesses the points of differentiation are few and that the future battle ground for success will be customer loyalty. I draw a direct connection between the delighted consumer and the loyal customer.

My argument is to treat customer satisfaction in a similar fashion to external financial performance. I suggest that focusing on financial performance alone may deliver short term financial gain but does nothing to address the issue of customer delight or loyalty and as such does little to address the future potential areas of success and opportunity for the enterprise.

But I am under no illusion. To make such a significant change requires support from a number of stakeholders. Not least the employees of the organisation and the chief executive. Though bottom up change is very much in vogue I believe a change as radical as this requires an inspired leader. In order for this change to be believable to both internal and external audiences it should come from the top. Most, if not all, CEO’s are rewarded exclusively on the basis of financial results. Until remuneration policy changes at the top it is unlikely that changes further down the chain are likely to stick.

Practical Impact

Improved customer satisfaction

Delighted employees leading the way to becoming a high performing organisation

Future prosperity

A customer inspired innovation roadmap (as you begin to address product deficiencies to drive up delight)

First Steps

Assess and understand the satisfaction metrics available to you today

Document the gap between what you already know about customer delight and what you would like to learn

Review the output of voice of the customer programmes where they exist

Review your innovation and product development roadmap and compare that with dissatisfaction drivers

Begin the dialogue internally

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February 28, 2011 at 6:44am

Filipe Morais

Rudi,

A very interesting idea in a time where there is plenty of empirical evidence that finantial metrics are not enough to measure business performance and its long-term sustainability leading to uneffective executive compensation.

Customer delight is indeed a key driver (if not the most important) of future (finantial) performance.

Agree with you that -like most change programmes - it needs inspirational leadership.

The key challenge I see is the measurement issues and its credibility - somebody suggested here a 3rd party evaluation akin to what happens elsewhere - which I think is a key issue.

Congratulations.

Filipe

February 28, 2011 at 6:54am

Rudi Sellers

Thanks Felipe, though the congratulations may be a bit premature, It's 20 days to go before the first round closes.

I agree measurement is key but I would also argue that a degree of patience will be required as getting to the right metric that meets the needs of most, if not all, of the stakeholder groups.

December 3, 2010 at 1:16pm

Todd Ortman

I am totally on board with customer delight being the best LEADING metric. Financial results are a lagging metric. My experience has been that if you have your customers' loyalty, you will prosper. I'm not sure we are ready for posting our scores externally, but believe that everyone within our organization should know how we are doing.

December 2, 2010 at 10:10am

Michelle Delebet

Hi Rudi
Gary referred us to your hack in today's webinar. Great ideas and gets to the heart of business, doesn't it? the Customer. Business gets so internally focussed and it just bleeds the passion from everyone involved, including customers.

You might be interested in checking out Stephen Denning's new book 'The leader's guide to radical management' as one of his principles is Delighting Clients.

Cheers
Michelle

December 2, 2010 at 1:28pm

Rudi Sellers

Thanks Michelle, the call left me with lots of food for thought.

November 19, 2010 at 4:04am

Selen Toplu

Hi Rudi,

A very novel idea that needs to be digested!

I'm actually coming at it firstly from a PR and customer point of view. I agree that from a marketing manager perspective it would be very useful to see these measurements and at that point I'm assuming they would be publicly shared as well just as year end results do. My worry is that the reputation of a company which perhaps has not got as high scores as others will be at risk of losing customers. Similarly, if I am loyal to a brand and see that they've scored low, then I would question my relationship with the brand and probably start exploring other options.

So, essentially, yes it would make companies work harder to satisfy customers & get these results, but in the process, focus on all industries may heavily shift towards investing in more operational customer touch points whether they are call centres/websites etc that have a big impact on brand perception. Innovation/marketing budgets may become lower.

I think overall an integration of customer delight into financial results may be the way forward as otherwise customer delight without profit would not be able to sustain brands.And in the long run customer delight hence couldn't be sustained either.

November 16, 2010 at 8:44pm

Luis Garcia Tello

I think we must manage simultaneously Customer satisfaction and financial performance, that is one key to success, and if we are so committed with this concept and decide to make our results public, that will give us consistency

November 15, 2010 at 1:31pm

Heidi Cupec

I am a believer that customer satisfaction makes or breaks a business. If it is possible to incorporate customer views into business’s financial KPIs that would great. I think this would put businesses into a new position of dealing with the world’s changing environment through digital and social networking channels. I also feel that would move companies into a new position of building their reputation in the market place along with building loyalty and trust with existing and new customers.

Good luck!

November 12, 2010 at 8:53am

Richard Khan

Transparency is the future and it will happen more and more as social media grows and customers demand to know more... 'the customer is king' has never been more true than it is today!

Make it happen Rudi!!! Good luck

November 11, 2010 at 10:09am

Adrian Pryce

An interesting idea which like the balanced scorecard approach needs to be more widely applied.

I am a great believer that we have to complemenet short term quarterly earnings data with other non-financial KPIs for things like CSR as well as core drivers of success such as customer satisfaction. as Rudi says once we emasure something we usually can manage it better - and most non- financial KPIs can usually be converted back to a financial parameter.

November 9, 2010 at 12:44am

Duncan Smith

The CSAT metrics would need to be able to stand up to scrutiny when reviewed therefore you would probably need to have a 3rd party (or a number of 3rd parties) who would measure customer satisfaction rather like the way that JD Power do this in a number of industries. without having this independant 3rd party I don't believe the measure would be trusted.

Where an organisation has consistently achieved high CSAT scores this provides a really strong message to communicate to prospects, you can see this with the likes of First Direct who run campaigns based on the strength of their CSAT scores.

November 3, 2010 at 9:37am

Imran Ali

A very interesting way of thinking; during the past 10-15 years organisations with any credibility have been striving to implement this strategy with little success. Customer loyalty is far from guaranteed, with competition coming in from all over the world; national boundaries are no longer the norm of business models. One organisation that comes to mind is the John Lewis Partnership, with its unique business model, implementing strategy for (customer satisfaction) is much simpler and straight forward, as the ground work has been in place from its beginning. Winning customer loyalty and implementing decisions that would require a cultural change internally are very big ‘changers’ for any organisation. Building your product range and market require extensive budgets and leadership, I believe it’s imperative to have a formula in place for when you have the results from customers and what actions to take that will bring that kind of loyalty. It’s very innovative you’re thinking and it has so much potential, managed perfectly it will reap great rewards for many years to come.

November 2, 2010 at 4:28am

cheryl kennedy

I challenge the correlation between customer delight/satisfaction and company prosperity, therefore the value of publicly reporting this.

I think it has some benefits internally as a strategic vision statement for providing unified focus in an organisation (especially if it provides political and public perception advantages and helps generate positive PR and brand perception). However even having this hook to hang your hat on has issues which need to be addressed fro example are your most loyal/profitable customers the most satisfied and who are your target customers (both within B2C and B2B) are and if you truly want to delight them all what is the ROI in doing this. Are you able to ensure that this is acurately measured and how do you report on it (the roll up on CSAT can render the metric useless), and how do you make it comparable to other sectors?

November 2, 2010 at 3:39am

Daniel Wyllie

Really interesting idea! With the recent press coverage around customer satisfaction within high street banks I think there is definitely scope for greater emphasis on measured and reported levels of satisfaction.

I wonder if there would be scope for forward thinking organizations to take a leading role in driving this approach, rather than look to form a committee to drive out standards. Those companies that lead the way could blaze an interesting trail and gain some valuable competitive advantage while the rest of their market catch-up…

Although I do appreciate that there is potentially a big barrier in making a move like that. While we can all agree that satisfactions breeds loyalty and will ultimately drive financial rewards it is not guaranteed. At a time where belts are being tightened in all areas of the consumer market there is a high risk that shifting the balance away from purely financial results could hit the bottom line before ultimately yielding rewards.

If a move was to be made I think it could only be successful with full commitment right from the top, as you mention, ensuring that the compensation package of senior executives is tied to satisfaction results at an equal weighting with financial results.

October 28, 2010 at 6:41am

Linda Lee-Davies

Excellent idea which also has the potential to expand to internal customer satisfaction and staff retention.

October 28, 2010 at 4:42am

Mike Grant

Very Original Hack and brings some possibilities to Customer Satisfaction:

I think the difficulty would not necessarily be setting this up within an organisation but ensuring that there was common ground across companies to ensure fairness of result and provide an honest rating for the end customer to use as determining 'The Best Customer Orientated Business' based on customer comments.

This would then lend itself to abuse as shareholders realise they have another means to promote 'their company' without any financial involvement. e.g. leave a positive commont rather than open a new bank account.

Also on a customer level - does the owner of say a multiple account holding (MAH), organisation that generates huge incomes to an organisation and a single customer have the same voice? The MAH is commenting across his organisation the single customer across his holding - how is a weighting worked out?

So there would need to be an independant body set up to monitor, measure and cotrol 'the comments' as well as ensuring there was not widespread abuse. I cannot see this being run inhouse without an external controlling body?

So, an original idea if Customer Satisfaction was at the heart of organisations but it isn't - its financial results and there is no appetite for organisations to 'air their laundry' in public!