What is Customer Satisfaction?
Customer satisfaction is defined as a measurement that determines how happy customers are with a company’s products, services, and capabilities. Customer satisfaction information, including surveys and ratings, can help a company determine how to best improve or changes its products and services.
An organization’s main focus must be to satisfy its customers. This applies to industrial firms, retail and wholesale businesses, government bodies, service companies, nonprofit organizations, and every subgroup within an organization.
There are two important questions to ask when establishing customer satisfaction:
- Who are the customers?
- What does it take to satisfy them?
Who Are the Customers?
Customers include anyone the organization supplies with products or services. The table below illustrates some supplier-customer relationships.
Note: that many organizations are both customers and suppliers.
|Supplier-customer relationship examples|
|Supplier||Customer||Product or Service|
|Automobile manufacturer||Individual customers||Cars|
|Automobile manufacturer||Car dealer||Sales literature|
|Bank||Checking account holders||Secure check handling|
|High school||Students and parents||Education|
|Hospital||Insurance company||Data on patients|
|Insurance company||Hospital||Payment for services|
|Steel cutting department||Punch press department||Steel sheets|
|Punch press department||Spot weld department||Shaped parts|
|All departments||Payroll department||Data on hours worked|
What Does it take to satisfy the Customer?
Organizations should not assume they know what the customer wants. Instead, it is important to understand the voice of the customer, using tools such as customer surveys, focus groups, and polling. Using these tools, organizations can gain detailed insights as to what their customers want and better tailor their services or products to meet or exceed customer expectations.
Customer Satisfaction resources
R. L. Polk & Co.: Making Every Issue the Only Issue (PDF) Annual customer surveys for R. L. Polk & Co. identified opportunities for improvement in customer contact and issue resolution. By following the same steps for every issue and performing full root cause analysis for 100% of issues, Polk increased operational excellence and improved customer satisfaction.
Move from Product to Customer Centric (Quality Progress) "Customer centricity" is about listening to your customers, with a focus on collecting, understanding, and acting on customer feedback and providing tools for easy access to this information.
Don’t Measure Customer Satisfaction (PDF) Customer perceived value is a better alternative to traditional customer satisfaction measurements.
Linking Customer Satisfaction to Product Design: A Key to Success for Volvo (PDF) A framework for bridging the quality satisfaction gap at Volvo integrates quality function deployment and customer-satisfaction modeling.