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Customer Satisfaction Measurement – How to Use it in the Shop

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In our last installment, we asked- somewhat tongue-in-cheek- Does Customer Satisfaction Exist? The premise being, how do we define “customer” today when HD owners, fleet managers, OE’s and insurance companies can all be important influencers in the repair process? Undeterred, we pressed on with the “why’s” of measurement, including components of successful measurement (The Six C’s of CSAT Measurement).  You can reference the last installment here

This month, we are going to explore more specific uses for customer satisfaction measurement to demonstrate the value of such programs. Since there are a variety of uses, we will separate them into two main categories: Internal and External.

Internal uses are those that are more operational in nature, that owners and managers use to run their business and help their staff.  External uses are defined as those applications that are more sales and marketing oriented, or those that involve communication or contact with those outside the organization.

Internal Uses

      1. As an Essential Part of Core Strategy, Management Philosophy

Buy-in from the top owners, executives, and managers is crucial to the success of your Customer Satisfaction Program. The Program should transcend reports, numbers, and information so that it is an underlying philosophy of business operations. In that way, it becomes integrated into your entire system of managing the company. 

It serves us well to recall that we use the term “customer” with the understanding that in the HD repair environment, there are many people and organizations that impact successful service delivery- not only vehicle owners, but also fleet managers, insurance companies, and others. As such, we construct our program with all those people and organizations in mind.

Most companies have a Strategic Plan that guides the direction of the organization. Some common components of a Strategic Plan may include a mission statement, budgets, sales, marketing and operational plans; IT and HR plans, and the like. Best practice would dictate consistent meetings to review the Plan, confirm you are on course, and make adjustments as necessary. The Customer Satisfaction Program should be part of the Strategic Plan.  Inclusion in the Strategic Plan sets the foundation for integration into company culture.

Some of the following initiatives and ideas will demonstrate to your staff why you included the Customer Satisfaction Program in the Strategic Plan. 

2. As an Integral Part of Compensation Plans

Your Customer Satisfaction Program should measure performance by employee. This information can be incorporated into compensation or incentive plans. The example below shows a report Estimator. Other staff can be rated on overall satisfaction scores or other metrics provided by the program. 

Usually, plans are devised to operate on a month-over-month basis. This is a great way to keep the Customer Satisfaction Program at the forefront of the minds of the employees.

 A word of caution: as with any program that impacts compensation, keep an eye out for attempts to inappropriately influence outcomes and results. 

3. A Way to Help Attract and Retain Talent

One of the biggest challenges for owners and managers in today’s environment is attracting and retaining good employees. Demonstrating a commitment to customer satisfaction also demonstrates a commitment to employee satisfaction as the two are closely related (more on this in a future installment). Compensation programs can be mentioned in the interview process and, once an offer is tendered, be an important part of the on-boarding process. It can also be included in the Employee Handbook. 

      4. As a Conduit for Cross Functional Management

Sometimes, strategic initiatives remain in company silos. For example, maybe the owner or President does the financials. The IT Manager updates the management systems. The Marketing Manager deals with the web site. Technicians and administrative employees focus on daily tasks. Depending on the size of the company, collaboration can be difficult as the day-to-day tasks need to be completed. The Customer Satisfaction Program however, is a reason to bring all functions together as it impacts all functions. 

Consistent meetings should be held to review results- as, ultimately, all silos and functions depend on the customer for the company to succeed. In the meetings, accolades can be bestowed on employees’ positive results, and challenges can be discussed too. Best practices can be shared, while go-forward initiatives and goals can be established. 

      5. Operational Measurements for ROI

Your Customer Satisfaction Program should provide opportunity to monetize some of your results, which may be of particular interest to owners and managers. For example, surveys often include some type of a “return” question, such as: 

After your repair was completed, was it necessary for you to return to the shop for additional work? 

Results could be displayed in a graphic like the one below:

The donut graph demonstrates that over the past 90 repairs, about 82% of them have not returned for supplemental work, but that about 18% of them (or 16) have. “Comebacks,” as they are often called, throw a wrench into the efficient workings of a repair facility, since there are administrative, scheduling, operational, and workflow interruptions that often accompany a comeback. Therefore, there is a cost associated with every comeback.

The average cost will vary with the type of work the HD repair facility does, but based on previous studies done by TenPoint Complete, it is estimated to be at least $400 per unit and could be much higher. The first step to reducing your comeback rate, is to actually track your comeback rate. 

You can then dig into root causes (potentially in the aforementioned cross-functional meetings) and set about lowering your comeback rate. This provides real ROI- but it also provides a platform for collaboration, and when improvements are implemented successfully, improves employee morale. 

Comebacks affect the overall efficiency of shop operations in the form of workflow and scheduling updates. There is an administrative expense that impacts everyone from the front office to the technicians. Potentially, parts need to be ordered and/or returned. The actual labor put into the return make be the greatest expense if gratis or at a reduced rate. And, everything hour you incur on a less profitable or non-profitable job takes that same hour away from a more profitable one. 

Instead of an expense, shop owners and managers should look at Customer Satisfaction Program data as information that can help improve financial results. 

External Uses 

      1. Marketing and Advertising 

Without even looking it up, I know that GEICO has a 97.1 customer satisfaction rating, because they have made it a priority to incorporate that number into their messaging. Few companies have the advertising spend of GEICO, but there are still plenty of opportunities available to communicate your commitment to customer satisfaction.

Positive customer satisfaction results should be incorporated into your marketing strategy. This can include your website, advertising (print, radio, billboards, etc.) in your customer waiting area, press releases, most public relations activities, hiring events, and other customer facing activities. 

You may be able to incorporate a message in communications with customers, current and former, as well as prospects. Examples may be e-mail campaigns, direct mail, newsletters- whatever your methodology. 

Consider incorporating the premise of customer satisfaction into your brand promise- which could include your tagline or slogan, that is used on company documentation from RO sheets to business cards.

      2. Insurance Companies and OE’s

Insurance companies play an important role in many HD repair and are very much concerned with policyholder loyalty. They understand that it costs them a lot more money to recruit new customers than it does to keep current policyholders. The amount of churn they have, or policyholder turnover, is meticulously tracked.

Insurance companies in the automotive repair space have put CSI programs in place, often in conjunction with their Direct Repair Programs (DRP’s). In the HD space, we are beginning to see the emergence of some managed programs that have some similarities to DRP’s. 

HD shops can solidify and expand their relationships with their insurance partners by being proactive with regards to a Customer Satisfaction Program. They can also use the information the program generates to attract additional work from insurance companies. 

OE’s can be another important source of referral business. Make it a point to have a professional presentation on hand for conversations with your OE and insurance business partners. It could be a hard copy binder, a PowerPoint, or a PDF for e-mail. Make your Customer Satisfaction Program an important component of this marketing piece. Other components would be items such as your mission/vision statement, facility capabilities and equipment, certifications, recognition and awards, community involvement, etc. 

      3. Service Recovery

Service Recovery is one of the most important components of your Customer Satisfaction Program. How many times have you gone to the trouble to reply to a survey or give feedback on an experience only to be ignored? It is vital that you recognize and respond to low scores and negative feedback in a constructive manner that turns a negative into a positive, or at least neutralizes the negative!

There are entire courses designed around service recovery (too much to get into here), but whether in person, over the phone, via-e-mail or social media, make sure only skilled employees are dealing in service recovery. Use surveys as a way to determine the satisfaction level of customers, and then follow up accordingly. 

On a 0-10 scale, we can generally divide responders into three categories: Promoters, Passives, and Detractors. Promoters are rating you a 9 or 10, and are your biggest fans. Passives are rating you a 7 or 8 and are just lukewarm about your service. Detractors are rating you between 0-6 and likely have some serious issues with your company. A basic goal is to move the Detractors up into the Passive category so they are not actively involved in harming your brand, and to move the Passives up to Promoters, so they are actively involved in positive word of mouth, or social media advertising. 

      4, Performance Groups and Best Practices

Many shops are involved with performance groups that promote best practices between non-competing repair facilities. Sharing customer satisfaction results with peers is a great way to build on victories and learn how others have successfully navigated dealing with the most complex and angry customers and situations. 

Performance Groups often have veteran and skilled leaders that have vast experience throughout the country. Often, paint company, insurance company, OE or other executives are invited to speak and share their experiences. This is often an excellent way to discover solutions to specific problems, relative to customer challenges and issues: from peers and industry experts. 

Next Steps

Previously, customer satisfaction has sometimes been difficult to quantify. The “I know my customers” strategy that has proven at least partially effective in the past, will not be considered as appropriate or sufficient moving forward. While personal relationships remain the foundation for many if not most business activities, measurements, data and information are becoming increasingly important to assist in the development and sustainability of those relationships. 

What we have presented here are some use cases for using a Customer Satisfaction Program both internally and externally, that can prove valuable to shop owners and all their “customers”: employees, HD owners, fleets managers, insurance companies, OE’s and strategic partners. 

TenPoint Complete has been helping clients design and measure their customer journey for over 20 years. John Webb is a company Partner and a Net Promoter Score (NPS) Certified Associate. He can be reached at jwebb@tenpointcomplete.com 

 

Customer Satisfaction Measurements Should Be a Priority

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Does customer satisfaction exist? No. Not in the HD repair industry, anyway.

There are too many players, too many constituents, too many people that are not “customers” that influence the process and the outcome of an HD repair. We are not selling T-shirts online. Some days, we probably wish we were. This is a more complex business. There are nuances to be considered in every unique repair.

Still, we have an innate desire to do the right thing. To provide great service to the HD owners, fleet managers, insurance company representatives, TPA’s and OE’s; to work efficiently with paint companies, parts providers, and multiple other vendors.

To help keep ourselves on track and ensure we are doing things the right way, we rely heavily on measurements. We have financials that include P&L’s, balance sheets, income statements and breakouts of business units that tell us how much money is in the bank. We measure cycle time, and parts, and paint usage. We track how many hours our employees work and how much money we are spending on marketing as a percentage of sales. Measurements are everywhere.

But for many of us, measurements of customer satisfaction- commonly called CSAT- remain an afterthought. But-there are those words again– customer satisfaction. Although it is probably not an adequate descriptor, I may have to revert to using it in a very generic and holistic sense, since there is no word (that I can think of) that more accurately describes everyone and all the organizations that influence a repair in the HD industry.

The comparison of financial statements and customer satisfaction is an interesting exercise. And, if not an actual exercise, (likely due to inadequate CSAT data points), at least an interesting philosophical discussion. Where does CAST show up on the balance sheet? Well, it doesn’t. Assuming you are making money (let’s hope so!) how can you therefore determine if the numbers in financials represent good profit or bad profit? Is there such a thing as bad profit? Yes- but let’s just say not-so-good profit. What is not-so-good profit (NSGP)?

  • NSGP values policy over relationships, making it more likely that costs will be driven up in the future due to short-term gains in the present
  • NSGP allows customers to remain unsatisfied, causing future brand deterioration by negative word of mouth
  • NSGP allows customers to remain unsatisfied, driving up future service costs that you may not be able to get compensated for
  • NSGP measures cycle time, but not comeback percentage
  • NSGP gums up the works by tying up your resources with complaints or re-work, that as an additional side effect is also quite de-motivating, if prevalent enough

Interestingly, without customers, there would be no need for financial statements, paint, parts, or much of anything else for that matter. Yet, some owners and managers relay on the old “I know my customers”, “I know everything that is going on in my business” mantra. There are two major reason why, even if partially true, it is best practice to systematically verify your beliefs.

First, customers won’t tell you everything they will tell a computer screen or a live agent with whom they have no history or personal investment. And, with your best source of future work being a recommendation, it is vital to harvest this feedback. Even customers that are completely satisfied can provide valuable information for future operational improvements and future products and services.

In a study of thousands of customer satisfaction surveys, TenPoint Complete found that even those customers that rated the overall experience a 9 or a 10 on a ten-point scale, approximately 25% of them had some aspect of the experience they thought could have been improved.

That brings up a second point, which is that expectation levels are constantly changing. You are not only compared to your peers in the industry, but to other service providers, some of which are doing a very good job. Many, however, are still not exceeding expectations, or creating raving fans. This is actually good news, as you have the opportunity to step-up and position yourself in the mind of the customer (insurance company, fleet manager, OE, TPA etc.) as an exceptional provider.

A recent personal example of a service failure occurred when I ordered checks from my bank (yes, still need the paper kind on occasion). Long story short, it took over three weeks and several frustrating phone calls to accomplish this task. My feedback was straightforward: Providing check re-orders should be a core service competency. The expectation level today is not two or three weeks on a request of this nature- it is two or three days.

There are certainly many additional advantages to CSAT measurement. If this has at least provided some food for thought, I’ll wrap up with some best practices or characteristics of CSAT measurement.

The Six C’s of CSAT Measurement

Commitment From the top. The owners, executives, and managers that sponsor or initiate the programs must be fully invested in their implementation, or it will be very difficult to achieve the goals.

Customer Focused Strategy Sounds obvious, but the measurements need to create action. For example, customers need to be followed up with upon receipt of negative feedback. How many times have you given negative feedback and not been acknowledged? Not good!

Consistent Many companies produce an annual CSAT measurement. While this is better than nothing, it leaves a lot on the table, like the opportunity to impact corporate culture and the ability to use results as part of an overall management tool and philosophy.

Complex Not! Complex measurements and formulas are interesting to statisticians and people who work in the industry, but not many others! Survey questions, reports, and other tools should be straightforward, intuitive, and easily understood.

Comprehensive From a methodology standpoint, you may want to consider a company that utilizes omni-channel communication. For example, the ability to survey via SMS (text), E-mail, and live agent. Also, having the option of an invitation to social media may be of interest.

Credible Measurements need to be credible to influence your important stakeholders and constituents. Producing the measurements yourself or relying on a company that does not have a core focus in CSAT measurement may dilute your efforts.

In future installments, we will explore more specific uses for the measurements in the HD environment and some of the most widely used tools for this type of strategic initiative.