Coatings World - August 2009

growth, measuring and managing it makes good sense. It is, however, unfortunate existing approaches miss the mark and fail to accurately account for the true measure of loyalty, therefore, leading to unsound results.

Conventional customer-satisfaction measures lack a consistently viable connection to actual customer behavior and growth. It is difficult to determine a strong correlation between high customer satisfaction scores and outstanding sales growth. In fact, in some cases, the reverse is true. K-Mart is an outstanding example of high satisfaction scores simultaneous with its’ sales revenue going into free-fall. The auto industry dealership surveys are replete with these same results.

If one buys into the concept that intense loyalty by a customer provides a supplier with extraordinary competitive advantages leading to greater profitable growth, then keeping it simple is the key rule of engagement in customer-satisfaction surveys. A guideline stating that “you must ask the right questions” in a customer-satisfaction-survey is understood. It just hasn’t been understood so well in the past.

F.F. Reichheld of Bain & Company ranked the top questions that provide the most accurate measure of loyalty. The top-ranked question was far and away the most effective across industries:

• How likely is it that you would recommend Company X to others?

Two questions were effective predictors in certain industries:

• How strongly do you agree that Company X deserves your loyalty?

• How likely is it that you will continue to purchase products/services from Company X?

Reichheld lists five additional questions that he describes as “other questions, while useful in a particular industry, had little general applicability.”2

“market” but instead, bring into play your company and especially, use the top executives as “market-facing” selling tools.

When contemplating customer-satisfaction surveys keep it simple. You might be better off employing only the three questions Reichheld depicts as the most important. All others may be unnecessary. CW