Help! Customer Satisfaction is High But Sales are Down!

Customer satisfaction measurement has been of great interest to service organizations for some years now. Nearly every industry that is both highly competitive and heavily customer-facing – like restaurants, hotels, and banks – know that a poor customer experience can result in lost future sales to the competition. As a result, these service-oriented businesses make every effort to keep their ear open to the voice of the customer. Indeed, customer satisfaction surveys proliferate – I once received five in a single week – as company after company strives to hear that customer voice.

And the effort may be futile. This isn’t to say that measuring customer satisfaction isn’t important – most certainly it is. But many companies may be overdoing it. In fact, some companies are seeing negative correlations between customer satisfaction and repeat business! Is this happening to you?

Reasons Why Satisfaction Scores and Sales Don’t Sync

If your customers are praising you in satisfaction surveys but you’re seeing no improvement in sales and repeat business, it could be for one or more of the following reasons:

You’re not Asking the Question Right

Often, a disparity between survey results and actual business results can be attributed to the two measuring different things. If you simply ask, “Overall, how satisfied were you with your stay at XYZ Hotel,” it only tells you about their current experience. If 80 percent of your respondents indicate “Satisfied” or “Very Satisfied,” you only get information about their attitudes. Then you compare satisfaction scores to either total sales or repeat sales from quarter to quarter. And you find either no correlation or a negative correlation. Why? Because the survey question measured only their perceived satisfaction, while the business results measured sales.

On the other hand, if you were to ask the question: “How likely are you to return to XYZ Hotel,” or “How likely are you to recommend XYZ Hotel to a friend or relative,” you might get a better match between responses and business outcomes.

Only Your Happiest Customers Are Responding

Another reason satisfaction scores may be high while sales are declining is because only your most loyal customers are taking the time to complete your survey. Your most loyal customers might have been trained to complete these surveys because they have been spoiled with special incentives because of their frequent patronage, and hence get better treatment than most customers.

Another, more dangerous, reason your happiest customers may be the only respondents is because the distribution of the survey is “managed,” being sent only to the people most likely to give high scores. There is a great risk of this bias in organizations where top executives’ compensation is tied to customer satisfaction scores.

Respondents Aren’t Telling the Truth

As much as we hate to admit, we’re not as honest as we claim to be. This is especially true in surveys. Entire books could be written on respondent honesty (or lack thereof). There are several reasons respondents don’t give truthful answers about their satisfaction. One obvious reason is courtesy; some just don’t like to give negative feedback. Still, even with the promise of confidentiality, respondents worry that if they give a poor rating, they’ll receive a phone call from the business’ representative, which they aren’t comfortable taking.

Survey incentives – if not carefully structured – can also lead to untruthful respondents. If you offer respondents a chance to win a drawing in exchange for completing your customer satisfaction survey, they may lie and say positive things about their experience, in the hopes that it would increase their odds of winning the prize.

You’re Hearing Your Customer but Not Really Listening

In many cases, your customers might say one thing, but really mean another. The customer could be quite satisfied on the whole, but there might be one or two smaller things, that if unchecked, can reduce the customer’s likelihood of repeat business. For example, if you sell clothing online, but not shoes, and your customer doesn’t find out until after loading everything else into the online shopping cart, assuming he/she doesn’t abandon the cart, the customer completes the order for the clothes he or she wants. When the customer gets the survey, he or she might indicate being very satisfied with the order he/she executed. But deep down, that same customer might not have liked that your online store doesn’t sell shoes. Whether or not the customer indicates the issue about the shoes, the next time he/she wants to buy clothes online, the customer may remember that you don’t sell shoes and choose to place the entire order with a competitor who does.

How Can We Remedy This Disparity?

There are a few ways we can remedy these situations. First, make sure the questions you ask reflect your business goals. If you want satisfied customers to return, be sure to ask how likely they are to return. Then measure the scores against actual repeat business. If you want satisfied customers to recommend your business to a friend, make sure you ask how likely they are to do so and then measure that against referrals. Compare apples to apples.

Second, reduce incentives for bias. Ideally, no executive’s compensation should be tied to survey ratings. Instead, tie compensation to actual results. If compensation must be tied to survey results, then by all means make sure the survey is administered by employees with no vested interest in the outcome of the survey. Also, make sure that your entire list of people to survey comes from similarly disinterested employees of the organization.

Third, encourage non-loyal customers to participate. You might create a separate survey for your most loyal customers. For the non-loyal customers, make sure you have ways to encourage them to respond. Whether it’s through an appropriate incentive (say a coupon for a future visit), or through friendly requests, let your non-loyal customers know you still care about their feedback.

Fourth, place reliability checks in your survey. Ask the same question in two ways (positive and negative) or phrase it slightly differently and compare the results. In the former example, you would expect the answers to be on opposite ends of the rating scale. In the latter, you would expect consistency of responses on the same end of the scale. This helps you determine whether respondents are being truthful.

Finally, be proactive. In the example of your online clothing store, you might have the foresight to realize that your decision not to sell shoes may impact satisfaction and future business. So you might be upfront about it, but at the same time, offer a link to a cooperating online retailer who does sell shoes, and allow the customer to order shoes from that retailer using the same shopping cart. That may keep the customer’s satisfaction high and increase his/her likelihood of future business.


 

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One Response to “Help! Customer Satisfaction is High But Sales are Down!”

  1. Nick Says:

    One other thing – respondent indifference, which is obvious after reading your first paragraph. After getting survey after survey, respondents simply don’t care and put down an automatic response to just be done.

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