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Articles > #120 How to Link Customer Feedback To Profitability

Why is it important to get customer feedback? How do you go about collecting this data in a way that is consistent and that provides impactful information?

A recent McGill Institute for Health and Social Policy study published by the Harvard Business Review determined that 90% of company profits are the result of your front line employees. 

How does your company look at customer complaints? Are they considered an opportunity, or are they hidden, cast aside, and quickly forgotten?

If you don’t think getting customer feedback is important please pick up Fred Reichheld’s The Ultimate Question. It’s packed full of stories and examples of companies who have made dramatic leaps forward in growth and profitability by focusing on customer satisfaction. Reichheld’s evidence shows that companies providing superior customer satisfaction grow at 2.6 times their competition. 

Great customer service anticipates the needs of the customer. Customer service cannot be an individual performance or it will not be enduring. We’ve all had an experience with a great employee at a business we frequent only to come back another time and discover that this was just one person who knew how to treat people. 

Customer service starts at the top. Leadership must recognize the value of keeping their customers happy. 

The way to make this an enduring part of your business is to incorporate customer feedback into your weekly meeting rhythms. It’s another reason why Strategic Discipline needs to be an indispensable part of your company’s culture. Each weekly meeting should have a portion of the meeting dedicated to employee and customer feedback. Customer feedback is essential to begin to discover how your operation is functioning, and how customers are being treated. 

Each leadership team executive should be required to contact at least one customer every week. Top companies like IBM has its top 200 managers talk to 5 customers and employees every week and review the information every Friday. We recommend asking four short questions to discover how the customer feels your service is performing.

If you’re serious about your customer satisfaction effort and wish to compare it to how great companies perform, then you’ll want to start using the scale Reichheld provides with the Net Promoter Score. Here you can begin to measure yourself against the businesses that have the top customer satisfaction scores in the industry.

I recommend visiting their site; particularly the pages that offer who the leading customer satisfaction companies are by industry and who rank highest in customer satisfaction. The names might not surprise you, but their scores might. Industries that don’t score well certainly won’t surprise you. Some of the lowest scoring industries are cable and internet, health and life insurance, and credit card companies. The highest are grocery and supermarkets and online shopping. 

How do you arrive at the Net Promoter Score? You can find out more at the net promoter website.

Is it valuable? One of my clients established the net promoter score as their basis for customer satisfaction. They quickly realized store-to-store profitability increased as their net promoter score elevated. Their goal each quarter is to exceed a 65% NPS [an outstanding score] to ensure each location is extremely profitable. 

Contact me to find out how this can tie into your overall strategy.

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