Table of Contents:
Satisfaction: Client Satisfaction and Loyalty
Satisfaction, the fourth element of the Client Management Model™, explains:
• the importance of monitoring and measuring Client satisfaction to gain insights;
• identifying gaps in performance targets and metrics;
• how to organise focus and reward in the firm around Client satisfaction;
• satisfaction parallels with the hierarchy of needs;
• the causes and remedies of service failure;
• dealing with the loss of a major Client;
• how to establish a Client Satisfaction Programme;
• the use of Client panels to keep in touch with your markets;
• the value of the Net Promoter Score in tracking Client loyalty;
• how to estimate the economic value of the most loyal Clients;
• rewarding excellence in Client satisfaction.
• What is Client satisfaction?
• How do you measure Client satisfaction?
• What evidence do you have on Client loyalty?
• What is the value of your referral business?
Why is the Net Promoter Score such an important metric?
Client Satisfaction Yields Insights
Client satisfaction is the extent to which a firm's services meet or exceed Client expectations. It is well-known that a small increase in Client satisfaction can yield considerable additional net profit, so it pays to constantly strive for increased Client satisfaction and loyalty through continuous monitoring and improvement of the Client experience. It is vital to check regularly how satisfied Clients are with your services. The more Client-oriented firms are more likely to be doing this as a matter of everyday business. This is usually effected through various types of survey, often conducted by a third party or someone in the firm unconnected to the Client in order to remove any bias.
Monitoring Client satisfaction can often uncover new opportunities for your firm; the swift handling of any concerns revealed during a satisfaction survey can also recover a Client from the possibility of defection. It is well-known that satisfied Clients tell many others, but unsatisfied ones tell between seven and 10 people.
Those firms conducting Client satisfaction surveys use a variety of methodologies. Some manage and implement the process internally; others use a mix of internal and external approaches. Clients are grouped by the type of survey they will receive, by agreement with the relationship partners involved. The most common and cost-effective method is post-transaction, being by telephone, using a well-briefed third party. Face-to-face interviews with the most strategically important Clients are usually carried out by board-level and senior management who are not directly involved with the Client assignment or matter being reviewed. Some firms outsource this research activity for complete independence. This level of investment is an initial hurdle for some firms to overcome, but current practice suggests that it is increasing.
Other surveys are also carried out independent of any current transaction. These reveal how the firm is treating its Clients during periods of lower work activity. Where possible, interviews are recorded with permission. Listening to these can reveal issues and concerns that may not surface elsewhere; such activity can also be a great source for case studies and referrals. Verbatim comments are very powerful to those hearing them in this new context. The recent Client Care Survey of professional services firms has shown that not all firms consider the importance or benefits of Client satisfaction and showed that the voice of the Client is rarely represented in the boardroom.
Table 4.1 Client Satisfaction Benchmarking Methods
Source: Client Care Survey 2013.
There are many benchmarking surveys available that enable firms to have a clearer picture of their relative performance in Client satisfaction. Yet the Client Care Survey shows that less than half of professional services firms surveyed carry out any form of competitor comparisons of Client satisfaction. Table 4.1 shows that only one in eight firms survey their peers and only one third review syndicated research.
So, what is the nature of Client satisfaction and what does it really involve? The mantra of Client satisfaction is a very simple one: 'Do the right things, right first time.' Yet few firms, if any, ever fully succeed in this aim. We all have experiences of different levels and qualities of Client/Customer service. When we receive bad service, we usually tell our friends and family; nowadays we can even vent our annoyance on the supplier's website! Of one thing we can be fairly certain: your Clients will tell their colleagues if your service is poor. Of course, we also talk about excellent service.
To address the issue of understanding the needs of your Clients, it is best to conduct detailed market research. Ideally, it should also provide clear insights into how and why Clients are judging the firm's current performance with that of their competitors in the way they service Clients. The more quantitative the answers obtained, the more useful is the data. This greatly assists in the subsequent process of determining and monitoring internal actions.