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Measuring Customer Satisfaction: The Effectiveness Speedometer Of Organisations

First step in measurement is to understand customer expectations clearly- and then determine how the organization stacks against the same (as perceived by the customer or user), besides seeking specific feedback to improve.

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If we evaluate, the more successful, consistently growing and valuable organizations in the world, we will usually find a high correlation, with their ability to deliver superior customer/ user experience vis-à-vis their peers.

Independent research, done by various think tanks &research, validates this intuitive rationale.

So shouldn’t all organizations across sectors, private, public or government measure and work to continuously improve user / customer satisfaction?

Yes. This is why mission statements of many organizations emphasize customer satisfaction.

However despite management encouraging their teams on delivering superior customer service and enhancing customer experience, actual delivery on ground, across various touch points and stages of customer lifecycle is often erratic – as it’s easier said than done.

Delivering a superior customer experience consistently, requires tremendous operating rigor in integrating people, process and technology with product& service channels, into a well-oiled smooth operation without less challenges, which not just delivers a good customer experience consistently, and simultaneously welcomes, solicits and leverages customer feedback & even complaints, to drive product and process improvements& innovation continuously.

First step in measurement is to understand customer expectations clearly- and then determine how the organization stacks against the same (as perceived by the customer or user), besides seeking specific feedback to improve.

Organizations thus should not just measure customer satisfaction, but recognize the same to be as important as sales or top/bottom line performance. After all while sales/profits indicate, what has already been done in the last year/quarter (i.e. is a lag indicator), customer satisfaction measures &scores can be an important lead indicator of future (i.e. if customers are satisfied – there is high probability that sales will be good in future, and converse is also likely. Besides below par satisfaction measures can be an opportunity for management to intervene, before things get worse and sales deteriorate).

There are three key stake holders, for which most organizations exist.

1. shareholders

2. employees

3. customers & users

As per classical management thinking – a private company exists to primarily serve the shareholders, with the other two categories being important, but stacked in the order of importance as above.

However given the increasing recognition of importance of the customer – perhaps the pecking order needs to be reversed with customers& users at #1.

If customers, and users are not looked after – the needs of the other two stakeholders (i.e. employees and shareholders) is unlikely to be met. There is increasing imperial evidence that thanks to internet, mobile & vastly easier access to information, a “power shift” has taken place with customers, users & citizens having become more powerful and we are now living in the age of customer/user experience.

Therefore, in the performance dashboard of the organization – customer satisfaction be recognized as the #1 effectiveness measure – as all other measures are lag indicators

But how many organizations truly & objectively measure customer satisfaction? And while they do bench mark themselves (with peers),on traditional metrics like sales &market share, profitability, shouldn’t they first benchmark on customer/ user satisfaction?

Any why not publish these scores openly & transparently–just like market share& profitability data? This can improve corporate and organizational performance& also serve needs of other important stakeholders in society like stock analysts, consumers, regulators.

So who should do this? If peer comparison is to be done and published – then it must obviously be done independently & institutionally – so the customer survey process &data analysis, scoring & benchmarking is fair & objective and relevant for all stakeholders.

Is this being done anywhere? Yes, is being done for several years in many countries like Singapore, US, UK, Sweden, Canada.

Customer satisfaction, Is now an established body of measurement science and there are a few citizen satisfaction measurement & benchmarking methodologies in use.

- Amongst a few others one respected methodology is the American Customer Satisfaction Index (ACSI), a globally respected Customer Satisfaction measurement & benchmarking Index, with presence in more than dozen countries around the world. ACSI was developed by the National Quality research Centre (NQRC) at the University of Michigan, US.

- As per this well established methodology, feedback obtained directly from customers (sampled randomly from random citizen group ) is used to statistically evaluate & analyse customer experiences, to obtain distilled views of customers and quantitative indexed scores on the outputs (service) received and benchmark the same with their peers & across sectors/nations.

Imagine, how transformational it will be, if we can measure (objectively & independently) and publish the same openly & frequently (say every year or more frequently), end customer/user satisfaction scores of all organizations (private, & public across all sectors). And not just publish the satisfaction scores for their dashboards, to drive competitiveness, but also provide diagnostics on what specifically to improve, to enhance/sustain their scores.

Believe this will go a long way to improve organizations’ across sectors and India’s global competitiveness.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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Bawa Grover

Manager Partner, Hexagon Consulting, Grover is an entrepreneurial leader with deep subject matter expertise in areas of Customer Service Excellence & customer Experience management, innovation & technology, Organizational due diligence, development & risk and compliance management, outsourcing/off shoring to name a few

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