Measuring customer satisfaction is a cost-effective way to build brand loyalty, increase word-of-mouth marketing and differentiate your business from the competition.
While large MedTech companies are systematically measuring how they are perceived by their customers and identifying the factors shaping customer satisfaction, small and medium businesses are still picking up.
The benefits of customer satisfaction are enormous, and you should measure it regularly because it is one of the key elements to producing customer retention and loyalty. According to Philip Kotler, it has also been linked to better performance in the stock market. I’ll discuss more on this here.
Methodologies for measuring Customer Satisfaction
The concept of customer satisfaction and its assessment is complex. It encompasses many different factors, and you can expect it to be more complicated than measuring a physical quantity.
This post sheds some light on the best methodologies for measuring customer satisfaction in a small, medium size MedTech company. I’ll explain these strategies one after the other:
1. Customer satisfaction score
The customer satisfaction score, or CSAT, is a well-tested and proven metric. It is a survey that targets customers with various basic questions such as: “How would you rate your experience with our….?” or “How would you rate our….?”
The scale typically ranges from 1 to 5, meaning:
- very unsatisfactory
- unsatisfactory
- neutral
- satisfactory
- very satisfactory.
That way, customers can easily and quickly answer, especially with the help of emojis that simplify the scoring.
Another thing you should know is that CSAT has its advantages and disadvantages; let’s take a closer look and see which outweighs the other.
Advantages of Customer satisfaction score
The CSAT is versatile and easy to use. It has the advantage of a single customizable question to measure the dimension you want to monitor. Also, CSAT can be used at the aggregate level.
For instance, a medical device company might ask customers to rate their experience with its product’s performance, features, reliability, or support. In a more holistic sense, the company might ask customers about their overall satisfaction with the company.
The benefit of CSAT here is that it is immediate and helps the company get precise feedback relative to any specific element. The company can then use this information to track the impact of relevant changes and get customer approval or disapproval.
Disadvantages of Customer satisfaction score
One of the most significant limitations of using a CSAT survey is that the results can be biased.
Response bias is very common in surveys about satisfaction. And the root cause is related to the question: who responds to the survey?
Depending on the situation, some customers will tend to disregard the survey making the data only sometimes 100% representative. For example, in some cases, happy or satisfied customers tend to fail to complete the survey. Meanwhile, in other situations, disappointed customers do not feel the need to fill out the survey.
For this reason, the marketing department can find it more difficult than expected to identify the actual level of customer satisfaction. However, monitoring the data over time allows the company to discover trends and changes and collect early warnings of a decline in quality or service.
Another area for improvement of CSAT is the sample selection, which may distort customer satisfaction ratings. Since only active customers are usually surveyed for customer satisfaction, a company can see a rise in the ratings because unsatisfied customers may have moved to another supplier.
Moreso, when evaluating customer satisfaction on a global or international level, it is essential to consider that some nations may be more direct or prone to complain.
And while analyzing satisfaction data, marketers should use their judgment to interpret the differences across markets and review satisfaction data over time within the same market.
Since the definition of customer satisfaction implies meeting customers’ expectations, rating data may also fall over time simply because expectations have risen.
Keep in mind that CSAT will partially predict customer behavior and will not account for your company’s potential for growth. Despite its limitations, CSAT is a valuable metric, but it is not the only one you will need among the key performance indicators. Read on to learn about the next best methodology.
2. Net Promoter Score
The Net Promoter Score was introduced to account for the lack of predictive power of the CSAT regarding customer loyalty. In this case, customers are surveyed and asked (on a ten-point scale) how likely they are to recommend the company, brand, or product to a friend or colleague.
The typical question looks like this:
“On a scale of 1 to 10, how likely are you to recommend our ****** to a friend/colleague?”
Based on their answers to this simple single question, customers are divided into:
Promoters: Customers who are willing to recommend (ratings 9 or 10)
Passives: Satisfied but unenthusiastic customers (ratings 7 or 8)
Detractors: Customers who are unwilling to recommend (ratings 0 to 6)
After this segmentation, the company can calculate the NPS by subtracting the percentage of detractors from that of promoters.
High NPSs generally mean that a company is doing an excellent job of securing its customers’ loyalty. Low and negative Net Promoter Scores are crucial early warning signals for the company.
Advantages of Net Promoter Score
Because the NPS is simple to implement and easy to measure and understand, it provides a stable measure that companies can use to monitor their progress. It can also serve as a guide for engaging employees in customer-centricity programs.
It is important to note that the same NPS score can indicate different business circumstances.
For instance, zero NPS can indicate 50% promoters – 50% detractors, and 100% passives. Or 30% promoters – 30 detractors, 40% passives, and so on.
Therefore, the marketing department must deeply analyze the data to understand in detail the situation the company faces.
Disadvantages of Net Promoter Score
In specific circumstances, NPS can generate misleading results. For example, suppose a company with an NPS of zero with current customers divided into 25% promoters, 25% detractors, and 50% passives lose half of the detractors. In that case, the resulting NPS will show an improvement.
However, in the real sense, the defection of the most unsatisfied and competitor-sensitive customers increased the NPS. It’s the role of marketers to ensure they fully understand what happened so that improvements can be effected early enough.
Also, because the Net Promoter Score is calculated from survey data, it may suffer from the problems common to surveys. This is why the results should be interpreted in light of other available data, such as sales trends and CSAT.
Conclusions
Measuring customer satisfaction means considering multiple factors. You will need to be creative and use judgment to draw conclusions from the information collected through surveys.
Unfortunately, no metric is perfect, and the accurate measure of customer satisfaction lies at the intersection of multiple data collection and industry benchmarking.
Moving on, most small and medium-sized MedTech companies pay more attention to their sales and if data are available, to the market share evolution. Although market share and sales are fundamental, both are backwards-looking metrics.
A better solution will be to use customer satisfaction metrics such as CSAT and NPS, as they are forward-looking metrics. And if customer satisfaction starts falling, sales and market share will, sooner or later, follow.
Share with me; what methodology do you use in measuring customer satisfaction in your company?
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Thanks for reading.