Stage 3 of Managing Forward: A Template, as discussed in my book, Managing Forward, focuses on using customer satisfaction analytics the help you set priorities that will give your company the best return on investment.
Stage Three: Set Priorities Based on Customer Satisfaction ROI
Even among the best of the best, no company has unlimited resources. Understanding the needs and expectations of your customers helps your business prioritize the allocation of limited resources.
The key to winning in the ultra-competitive business landscape we all face is to focus our resources to the activities that maximize return on investment. Using a sound and proven methodology helps to determine the impact that different initiatives and improvements can make on customer satisfaction and makes prioritization much easier.
For example, a retail customer of ours planned to spend $200,000 to improve page download times. Deeper analysis determined that increased speed, while measurable and specific, ultimately made no difference to customers. The change would not generate a measurable impact on customer satisfaction or customer behavior. Our methodology, however, did show tweaking product descriptions would have the greatest impact on turning browsers into purchasers. Making those improvements was a much more effective allocation of resources.
Until you measure intelligently you can’t know the answers and cannot prioritize resources effectively. Distinctions can be subtle, though.
After analyzing the satisfaction of first-time and repeat customers, a large international media retailer found a gap in the perception of transaction costs. By testing customer price sensitivity to overall transaction costs, to product costs, and to shipping costs, they set different priorities for first-time customers and return customers and developed a pricing strategy that increased conversion rates and overall sales.
The lesson here is to make improvements based on applying science to the measurement of your customers. Improve your business by allocating resources to efforts that improve customer satisfaction, which is proven to drive conversion, loyalty, retention, retention…and financial success.
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