Editor’s note: Stacey Sacks is a principal at Applied Marketing Science, Inc., a Waltham, Mass., research firm.

Customer satisfaction measurement is a multi-billion dollar business in the U.S. We all know that keeping customers satisfied is a vital component for success in the marketplace, no matter what product or service is being sold. We also all know that in order to manage customer satisfaction, we must measure it. This is most commonly done through customer satisfaction surveys, focus groups, customer complaint data, call center statistics, as well as other methods. All of this activity may produce terrific data, but is it really generating actionable information and, thus, more satisfied customers?

If the ratings on your customer satisfaction survey change, do you know what actions to take or which internal “knobs” to turn? Do those actions reliably produce the desired effects on your ratings? If the answer is yes, congratulations — you are on the right track! Your customer satisfaction measurement system is probably securely linked to internal metrics that drive product and process changes. But, as with many companies, if the answer is no, it may be time to take a close look at your data collection process and customer satisfaction measurement system as a whole.

To determine if your system is working for you, here are a few key questions to answer:

  • Are we asking the right questions? Do you truly understand which needs customers are satisfying through the use of your product or service? How are your product’s features meeting those needs? A customer satisfaction survey should collect data at a sufficiently detailed level to support decisions about product feature changes and upgrades, while leaving the door open for new and creative product innovations.
  • Are we asking the right people? A convenient sample may not always give you the most accurate information. Companies need to include unhappy customers as well as happy ones, former customers as well as current, and hard-to-find customers as well as those you know how to reach.
  • Is the frequency of data collection appropriate? Surveys related to an event, such as an interaction with customer service, a re-purchase or a product upgrade, may be important to get the true pulse of the customer base shortly after an experience with your company. But be careful - over-surveying is also a danger.
  • Does the analysis and reporting of the data present an accurate picture of what customers are telling you? Small sample sizes and frequent surveying can paint a misleading picture if not analyzed appropriately. Make sure any necessary caveats are presented with data and that only real changes are highlighted. Also, be sure your reporting includes information on relevant events in the marketplace that may be affecting your ratings.
  • Can data collection be improved or streamlined? If you think you are spending a lot of time and money on your customer satisfaction data collection, there may be opportunities to streamline. Changing the frequency of the surveys, the sample sizes, or the methodology may provide opportunities to save time and money. The Internet has become a fast and inexpensive way of gathering data and is appropriate for many customer groups.

How is it being used?

Equally important to the data collection process is how customer satisfaction data is ultimately used within your company. In many organizations, the collection of customer data is completely disconnected from processes that take advantage of such rich information. To determine if your organization is making appropriate use of customer data, ask yourself the following questions:

  • Is customer data fed into your internal processes for product development and process improvement? Many product development teams are so focused on technology that they are unable to respond to customer needs that may be difficult to quantify or measure. In some situations, product and process managers are willing to use customer data, but have simply been denied access for political reasons.
  • Are there new opportunities for the use of customer data? If customer information is not being used systematically for product and process development, then there are opportunities! Managers responsible for collecting customer information know how valuable this information is to an organization and it is often their responsibility to sell it within the company. There are many tools, such as quality function deployment (QFD), which can help to facilitate the linkage between customer needs and the development of product features and specifications. By creating and nurturing such a linkage in one business or division, you can then use that area as a model for an integrated, common system across the organization.

Periodic look

Measuring customer satisfaction is an important first step and most organizations already have some sort of a system in place. But taking a periodic look at how that system evolved and how the data are being used internally is critical. The keys to managing customer satisfaction successfully are gathering accurate and timely information from the right people, and using this information in a systematic way to drive product development and process improvement.