Customer Satisfaction: turn customer data into company profits.

Customer feedback: It's how you use it that impacts your bottom line

How much is your average customer worth to you? Whether you operate a tire store or a multimedia company, you ought to be able to answer this all-important question.

"If you don't know what your customers are worth, then how can you decide how much it will cost to keep them happy?" asks John Goodman, president of Arlington, Virginia-based TARP (Technical Assistance Research Program) Inc. Once you have the answer, you can determine if your clients are having problems you don't know about, and how many referrals or how much additional revenue you would generate if you resolved these matters.

Over the past 10 years, TARP has studied more than 600 customer-service systems. A recent survey of 22 customer-driven companies revealed that while they spent an average of $1 million each year gathering customer feedback, they had little to show for their efforts. "The problem," Goodman points out, "was not how the data was collected, but how it was used or not used."

In many companies, management orders that customers' problems be fixed, but fails to do any follow-up to determine if they were resolved. Or companies will collect data through surveys or a customer service department, but by the time the complaint or data is processed, it's too late.

Sandra Steen, president of Sandra Steen & Associates Inc., in San Antonio, Texas, says employee training can help you make better use of your customer-satisfaction data. Steen, whose clients include AT&T, Sony and Ameritech, helps companies increase revenues by turning customers' needs into sales opportunities.

"We do surveys and focus groups with front-line employees and managers who are most in contact with customers," she says. "Once we gather the customer comments and complaints, we do strict observations of employees interacting with customers in their everyday environment, which includes monitoring phone calls and listening to customer complaints. At that point, we make recommendations and devise a training program," she adds. For example, telephone representatives may be given a script to follow.

Information must be distributed throughout the company, from your office down to every employee. "You don't want employees to think that this is a flavor-of-the-month situation," Steen says. "They have to feel that you're going to take the data and do something with it." It's critical to have face-to-face meetings either weekly or monthly, and to include customer feedback in management decisions.

There also has to be a plan for integrating customer data in a timely fashion. You'll need a system for sorting and coding information received from front-line employees and other sources (e.g., comment cards, telephone surveys, direct-mail surveys and focus groups).

Here are some tips to help improve customer feedback and the way you use it:

* Develop a plan for collecting and analyzing customer feedback.

* Integrate ail of the information and weigh it in terms of how it impacts your bottom line.

* Conduct follow-up telephone calls or mail letters to ascertain if problems have been resolved to your customers' satisfaction.

* Offer companywide employee incentives to support the process.

Because smaller companies are closer to their clients, they can respond faster to customer comments, Goodman and Steen note. By identifying your clients' needs and expectations, you'll maximize customer loyalty--and your company's profits.

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