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Increasing Customer Satisfaction

Increasing Customer Satisfaction

The October 2012 Harvard Business Review has an article called The True Measures of Success. In it there is a section called The Perils of Intuition where the author says, in effect, you have to understand the causes and effects of what you do to customers in order to know what the data describing your results mean. “If you don’t understand the sources of customer satisfaction, for example, you can’t identify the metrics that will help you improve it.”

In my experience, most business owner simply look at the data about customer satisfaction and make ‘educated’ guesses about what they can do to improve it (and sales). They don’t actually have a model of what they do that creates customer satisfaction or rejection. They are trusutng their intuition. I had a CEO of a billion dollar retailer say to me, “This is a simple business. All I have to do is walk around our stores to see what we must do to satisfy our customers.” This was at the same time that they were losing market share every year. I had been brought in to help them turn around. Two years later, despite my best efforts trying to get the management of this company to change their way of thinking, they went out of business.

The point is, really understanding what you do to attract and satisfy customers — beyond your ‘gut feel’ — is crucial to success for businesses of all sizes. The author of the HBR article says, “People‚Äôs deep confidence in their judgments and abilities is often at odds with reality.” Having a valid theory about why people will be attracted to what you are selling is more than being intuitive or a good guesser. Many small businesses make a good initial guess about a segment of customers they can serve and begin to do that. They never ‘validate’ whether their initial guess will sustain the growth they need to succeed. That is a key contributor to why so many small businesses fail.