Market Research Consulting: Upgrading Customer Satisfaction Market Research in a Web 2.0 World

Ever heard the old saying in marketing circles that for every disgruntled, dissatisfied customer who lets you know of their unhappiness with your product or service, that there are nine or ten other customers who are upset but don’t bother to express it? Moreover, these discontented customers would tell five or so other people. On the other hand, happy customers do not necessary tell anyone unless that are particularly happy or if they are asked directly about the business they are patrons of.

Common wisdom has it that several, if not most, of the unsatisfied customers would vote with their feet, that is, they would move their business to one of the competitors and unless the company in question is conducting attrition surveys, the organization would never know why they left. (Or worse, it might not even notice.)

Much of the above is supported by research conducted in the 1980s. But is it still valid today?

Probably not.

Yesterday, a consumer had to be ardent to express a complaint. The consumer would have to physically visit a location, or be willing to make multiple phone calls to find someone, anyone, who would listen, or write, address and mail letters. Moreover, an unhappy customer had little recourse if their complaint was not answered. They had little or no market power to express their discontent in a public forum.

Ah, how the worm has turned!

Today, a disgruntled customer has but to turn to the Internet to potentially create a firestorm of adverse publicity for the company that is the (alleged) source of their pain. A consumer can post a negative review of a product (or vendor) on a shopping site (Amazon?), or make a video to post on YouTube and a hundred other sites, or express their anger on a blog, or even put up a website dedicated to “I hate [such and such a company].” Maybe, with some cleverness and a little bit of luck, their Internet efforts will go viral and thousands, hundreds of thousands or even millions of people in the online community would view their missives. Examples are rife.

I have yet to see any definitive research to indicate either the continuing validity or the abrogation of prior market research findings that for every customer with a problem another nine or ten have the same problem but are silent and that an unhappy customer will tell five other people while a happy customer is generally quiet.

But let’s speculate a little.

First, we might ask if consumers or customers are more unhappy than in yesterday. Customer satisfaction research suggests that consumers are generally getting happier with products and services as quality controls, technological advancements, and more rapid distribution networks have evolved.

But there is a lingering cloud of discontent that is consistently measured in customer satisfaction. For companies using one to five scales, very dissatisfied to very satisfied, many continue to see the very dissatisfied percentage of customers remaining stubbornly in the two or three percent range, with the somewhat dissatisfied range slightly higher, typically three to four percent.

What is going on here? If customers are that dissatisfied, why don’t they vote with their feet? (Or are they, and then are simply being replaced with equally dissatisfied customers.)

A few years ago, your observer ran a customer satisfaction measurement process for a major company. The client was the Quality Assurance group. The director of the group (a Board level position) and I would often speculate on what was so upsetting these very dissatisfied customers. He was pushing hard to continually up the bar.

This organization was one of the pioneers of driving a portion of employee bonus pay (all employees) based on the customer satisfaction results. The director wanted the employees to constantly work toward improving their performance and a logical way to measure their improvement was to look at increasing satisfaction scores (or decreasing dissatisfaction scores).

He and I had some interesting debates on this topic. My observation, then as now, is that it is a Sisyphean task to set a compensation-based goal of continually increasing customer satisfaction scores by reducing the percentage in the very dissatisfied category. Now, that might seem odd coming from a strong believer that businesses must measure and act on customer satisfaction market research to up their game and continue to be successful.

My issue with focusing on turning very dissatisfied customers into satisfied one is this: psychology tells us, and qualitative (and I would argue quantitative) market research confirms that there are some people, some small percentage of the customer/consumer base, that simply is never going to be satisfied. No matter what you do for them, they are never going to be happy with you. The damage is done.

Now I am not a psychologist (I do however play one on tv, ……er, no!). But as an experienced focus group moderator, I have observed over the course of thousands of groups that there are people who are simply unhappy. Why? It is not for me to say or speculate. But they are. You have probably observed this as well if you have sat in enough focus groups or in-depth interviews.

This small group (the two to three percent) walk around with thunderclouds over their heads perpetually……and it’s raining!

Most of us have bad days where something happens and we are upset. We may snarl at the dog or get upset that the checker at the grocery counter is not enforcing the ten item rule (that guy has got eleven items!!!). But we get over it.

I suspect that the two to three percent do not.

That may be one reason why the dissatisfaction level in customer satisfaction surveys is so relentlessly stubborn.

But then what about the issue of motivating the organization to higher levels of achievement?

Many companies who have a solid customer satisfaction measurement (and improvement) system  report satisfaction as top 2 box and bottom 2 box (assuming a five or seven point scale).

Much management attention can focus on that bottom 2 box. How can we move these dissatisfied customers at least to neutral or even satisfy them? Maybe it is time to revisit this line of thinking.

Rather than focus on eliminating the “1”’s (very dissatisfied) and “2”’s (somewhat dissatisfied), a more  productive path might be to focus on implementing change that will make the satisfied even more so.

“Well,” I have heard, “they are satisfied and they are staying as customers. Why spend money to make them more satisfied?”

Good question.

Here is why: companies need to build positive satisfaction bank accounts, so to speak, with customers. With a positive account, a customer will be more likely to forgive (but not forget) the next time they encounter a curt customer service rep, or have to wait twenty minutes to talk to one (while listening to a recording telling me there is heavy call volume and they really value my business [wouldn’t valuing my business really translate into putting more resource into answering my call more rapidly?]).

Here’s a personal story to this effect. I was a customer of one of the satellite television providers. I was reasonably satisfied with them. If they had ever asked, I would have given them a four on the one to five scale.

But, their standing with me was constantly based on the next encounter. They had flunked the installation test at the beginning of our relationship by both failing to show up as promised (they did not show at all) and then I had to call them to complain and reschedule.

The service had been okay. The few times I had technical problems, their reps were helpful.

Then I received a flyer from them in the mail, pitching me an introductory offer to start service (I am already a customer!) at less than half the price I was paying after being subscribed for more than five years. That certainly made me feel warm and fuzzy toward them. Moreover, they would not make the same offer to the existing customers.

My conclusion: they valued a new customer more than they valued me, a long-standing customer. My satisfaction is decreasing……………………………..

The kicker came when I was moving. I called to transfer the service from myself to my significant other who did not have an account and was not on my account.

So I made a phone call to their customer service center. The rep I spoke with confrontational, rude, and insistent that I would have to pay to cancel my contract (which had expired after two years of service; I was on month to month).

What did I do? I called their competitor and established service with them. They were more than happy to help, as you might imagine (and are continuing to provide good service three months later—right now, I would say they are a five).

The first provider had no reservoir of good will with me.  And I left when the opportunity (and timing) presented itself.

What could they have done? In the case of the final straw, probably nothing short of free service for the grief they gave me. I am a realist: that was not going to (and did not) happen.

But if their management was less focused on shoveling new customers into the pipeline and more focused on retaining customers who had proved their value, the distasteful encounters I had with them might not have happened and I would still be their customer.

Even when companies screw up, moving swiftly and definitely to right the wrong often builds positive satisfaction equity with customers that allows the customers to dismiss future poor encounters as out of the norm for that company. That is what I mean by a positive satisfaction bank account.

Will such a strategy of continually increasing customer satisfaction work for the terminally dissatisfied? In short, no.

But can it work for the other 97% to 98% of the customers? Yes.

Now to loop back to our starting point. The Internet has given the 2% to 3% who are perpetually dissatisfied a worldwide forum in which to express their discontent. Now I am not arguing here that complaints and bad reviews on the Web should be dismissed as being simply from cranky customers. Far from it.

Businesses must have a strategy to handle complaints on the Web and to respond when events escalate. This is common business sense.

But just as focusing on the very dissatisfied and somewhat dissatisfied customers in customer satisfaction results is not a formula for success (unless your results are so bad that a significant percentage of your customers are in these categories, in which case you have bigger problems that I am musing on here), focusing on the vocal minority that can be so prominent on the Internet is equally not a formula either.

A business must pay attention to its brand and reputation on the Web. But in so doing, it ignores the rest (and a huge majority) of its customers to its peril.

That’s one of the reasons why customer satisfaction market research is more critical in the Web 2.0 era than ever before.