Customer satisfaction is one of the most important drivers for business success. According to PWC’s 2023 Annual Global CEO Survey, the number one concern among CEOs with regards to profitability over the next ten years has to do with changing customer preferences. Research shows that high customer satisfaction leads to greater customer retention, higher lifetime value, and a stronger brand reputation.
PWC also found that around the globe, 30% of customers will give up on a company after one bad customer experience. In the U.S., 59% of customers will stop interacting with “a brand they love” after three consecutive bad experiences.
Knowing the importance and value of customer satisfaction means that it should be a priority. With resources rarely budgeted toward customer satisfaction initiatives, how can organizations improve their relationship with customers? Whether a company already has high customer loyalty or struggles with customer complaints, a data-driven approach can garner insights and quickly boost customer satisfaction.
Two Cost-Effective Methods to Improve Customer Satisfaction
There are two main approaches to improve customer satisfaction: proactive and reactive. To help you gain a better understanding of both methods, let’s dive into a brief overview and examples.
Method 1: Proactive
Your customers are satisfied, but you want them to become brand advocates. When it comes to a proactive way to improve your customer satisfaction, the easiest tactic is to send a survey. Surveys give organizations a quick pulse on what excites, motivates, and frustrates their customers. Let’s look at an example.
Example: Using Predictive Analytics in the Airline Industry
Minitab Solution: Predictive Analytics
The most important metric for airlines is passenger satisfaction. It’s good to know that passengers are satisfied with their experience with an airline, but it’s even more valuable to understand why they had a great experience. By leveraging predictive analytics, organizations can quickly identify the key drivers of customer satisfaction.
In this example, we are using survey results from a customer satisfaction study to categorize customers into two groups, whether they are satisfied or not satisfied with an airline service. Here, we’ll use CART Classification in Minitab Statistical Software. The main idea behind CART is that we partition the predictor variables into different regions so that the dependent variable (also known as the target variable, or satisfaction in this case), can be predicted more accurately. Minitab Statistical Software will automatically find the best decision tree and provide model statistics, so you can understand if the model is useful.
CART trees are beneficial when you want to understand the important variables. By looking at the tree below, airlines are able to learn that customers want a good inflight entertainment and a comfortable seat.
The red and blue indicator bar, (shown above and in each node of the tree), makes results easy to see with blue being satisfied and red being not satisfied. This also helps you notice that when customers rated the inflight entertainment less than 3.5, they tended to be more satisfied if the seat is near the window or aisle, but much less satisfied if they have a middle seat (follow the path on the left side of the tree).
By analyzing the tree, we can see that when inflight entertainment was rated greater than 3.5, approximately 81% of customers rate their experience as satisfied.
Next, let’s cover our second method.
Method 2: Reactive
You want to address and resolve customer complaints quickly. Where do you start? By applying a reactive approach, you can directly manage and resolve customer complaints. One of the most efficient ways to do that is by implementing 8D, a popular problem-solving methodology.
8D is known as the Eight Disciplines of problem-solving. It consists of eight steps to solve difficult, recurring, or critical problems within an organization. This methodology is ideal for organizations that need to resolve an urgent problem quickly, so a customer complaint is a perfect use case.
Example: Managing Customer Complaints with 8D
Minitab Solution: Continuous Improvement
Kyocera AVX, a leading global manufacturer of advanced electronic components, wanted to improve their customer complaint system. Each plant has its own teams and quality management systems, and they wanted a single standardized template to accomplish the overall goal for their CI program.
By implementing 8D, Kyocera wanted to accomplish the following:
• provide management with visibility into projects to help with decision-making improvement opportunities.
• globalize their systems to effectively manage customer complaints.
By standardizing the 8D form with the help of Minitab Engage, Kyocera AVX was able to achieve a more streamlined process for managing customer complaints, while having a full view of customer cases across their entire organization.
Minitab can improve customer experience by helping your organization:
• proactively measure customer satisfaction
• develop projects and strategies to address customer complaints
• improve the overall customer experience
These are just two of many strategies that your organization can implement to improve customer satisfaction. Insights from your data can help you gain a better understanding of your customers’ motivations and pain points, so that you can reach customer loyalty, and even brand advocacy.
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