Implementing a Customer Satisfaction Metric

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y Gangadhar Bhardwaj

Organizations evaluate themselves by measuring customer satisfaction with their products or services. As organizations evolve, the measurement of customer satisfaction across the entire organization becomes imperative. The first step is for an organization to implement a metric for tracking customer satisfaction.

To develop a metric, an organization should explore these questions:

• Who are its customers?
• What type of survey should be administered to them?
• How will satisfaction be measured across the organization?

The answers to these issues, along with an understanding of the Servqual survey framework and a voice-of-the-customer (VOC) matrix, will aid in the implementation of a customer-satisfaction metric.

Understanding the Customer

A rule for implementing a satisfaction metric is that customer satisfaction must be measured for every function and every service of an organization. There are usually many interlinks among the services and products within an organization. For instance, a typical information technology (IT) company provides a variety of different products in the market and, in addition, a number of services for those products, such as help-desk or desk-side support, IT infrastructure, and network security.

In such a complex IT organization, the services get classified into functions, such as sales and operations. Thus, the first step is to identify the customers, both internal and external, for each of the functions throughout the organization.

For example, for the application development team, customers would include the application users, along with some internal people to whom services are catered.

Dimensions of Customer Satisfaction

The next step is to determine the strategy for collecting the VOC. The challenge is to develop survey questionnaires to measure customer satisfaction with the various aspects of a product or service, such as the actual product, the processes followed (for instance, for a warranty), and the quality of service.

There are different theories for understanding customer needs and arriving at specific factors for measuring customer satisfaction. One widely used framework for measuring customer satisfaction is Servqual, developed in the 1980s by Valarie A. Zeithaml, A. Parasuraman and Leonard L. Berry. The method is also known as the RATER model, because it prescribes measuring satisfaction in these five dimensions:

• Reliability – A company’s ability to perform the promised service dependably and accurately
• Assurance – The knowledge, competence and courtesy of employees and their ability to convey trust and confidence
• Tangibles – Physical facilities, equipment and appearances that impress the customer
• Empathy – The level of caring, individualized attention, access, communication and understanding that the customer perceives
• Responsiveness – The willingness displayed to help clients and provide prompt service

The Servqual dimensions can be used as the high-level survey categories in a questionnaire. Other guidelines to follow when developing a questionnaire:

• Use a Likert-scale rating (a respondent’s level of agreement with a statement) for customer responses for all questions.
• Assign an importance weight to each dimension of the survey. The importance weight, combined with the customer rating, helps an organization identify areas for improvement. Because the questions and the assigned weights might differ for each survey, it may not be possible to aggregate the total score at the dimension level. In such a case, assign function-level and organization-level weights to the dimensions in order to prioritize the dimensions to be focused on (Table 1). 

Table 1: Sample Importance Weights at Function and Organization Levels
Dimensions (Based on SERVQUAL Framework)	Organization-Level Weights	Function-Level Weights
Reliability	3	5	3	1	3	5	4
Responsiveness	5	3	2	1	5	4	4
Assurance	5	4	4	4	5	3	5
Empathy	5	4	4	5	5	5	5
Tangibles	5	2	5	1	3	5	1

• Include an overall satisfaction question. This can be aggregated at every level – functional as well as organizational – in every survey.

The customer satisfaction level should be measured for every function of a business using surveys designed with these guidelines. Each team within the function should develop its survey questionnaire in the same fashion to ensure consistency. This way measurement is consistent across the organization.

Developing the VOC Matrix

One of the tools used for customer-satisfaction assessment across an organization is the VOC matrix shown in Figure 1. This analysis tool helps in evaluating the relative customer value of the service provided, determining the key performance drivers for meeting customer requirements and deciding the potential focus areas for improvements.

Figure 1: Voice of the Customer Matrix

The prioritization matrix examines the relationship of various service areas or process steps with prioritized customer requirements. The purpose of this tool is to determine which processes have the strongest correlation to the requirements. It uses inputs from the customers on not only their requirements but also the relative priority ranking for each area. The steps for developing a VOC prioritization matrix are:

1. List the company’s service areas across the column headings
2. List the dimensions and the survey questions in the rows
3. Put the customer’s ranking of relative importance for each survey question after each question
4. Put the total score as the last column in the grid
5. Determine the total score for each question by multiplying the rating for each function by its importance weight and adding the products together
6. Repeat building this matrix at all levels or business functions

Figure 2: Sample VOC Matrix for the Business Function Customer Support

Analyzing the VOC Matrix

Using the Servqual survey mechanism and the resulting matrix, it is possible to calculate metrics to be implemented organization-wide. The metrics are:

• Satisfaction rating – This can be aggregated by question or dimension. Table 2 shows a satisfaction rating gathered within a single question; Table 3 shows a satisfaction rating aggregated from responses to all questions within a single dimension.

Table 2: Sample Satisfaction Rating at the Survey Question Level
Please Rate How Well the Product Met Your Requirements
Response options (1 = Poor, 5 = Excellent)	1	2	3	4	5
Number of responses	5	0	8	23	22
Percent of responses	8.6	0	13.8	39.7	37.9

Table 3: Sample Satisfaction Rating at the Dimension Level
Reliability
Response options (1 = Poor, 5 = Excellent)	1	2	3	4	5
Number of responses	12	7	11	25	45
Percent of responses	20.7	12.1	19	43.1	77.6

• Satisfaction score – This is the efficiency score (rating x weight) for each question. It is used to determine the focus area for potential improvement. The highest-ranked service areas indicate the strongest performance in meeting customer requirements; the lowest indicate areas that do not meet customer requirements.
• Composite satisfaction index – The composite score is derived by calculating an efficiency score (rating x weight) for each function, based on the mean of ratings from the questionnaire and the weights given to each dimension at the function or organization level (Figure 3).

Figure 3: Sample Composite Satisfaction Index

Dimensions with high scores are satisfactory or need to be further strengthened; low-scored areas with high weight are dissatisfactory and should be further analyzed for root causes and to develop an action plan for improvement.

Tools that support this root cause analysis are correlation analysis, logistic regression, ANOVA or chi-square, or design of experiments. The VOC results are also necessary inputs for developing a control plan or FMEA (failure mode and effects analysis).

Successful Implementation

Implementing the customer satisfaction metric across an organization requires a well planned execution. In order to produce meaningful results, importance must be placed on areas related to completeness and accuracy of data during the survey process. Techniques such as Servqual are ideal for building effective survey systems; however, these need to be supplemented with tools such as the VOC matrix to capture the quality and importance of a service from the customer’s perspective.

The life cycle for these initiatives starts and ends at the customer. Even though a variety of tools and techniques are available, success truly depends on consistency and accuracy in measurement across an organization.

About the Author: Gangadhar Bhardwaj is a certified Black Belt working for Tata Consultancy Services in Mumbai, India. He can be reached at g.bhardwaj@tcs.com.

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