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Improve profitabilty, reduce the high cost of customer churn

Posted: 01 Sep 2007

Customer satisfaction matters, how do we improve it?

As satisfied customers spend more, say positive things about the supplier and demonstrate higher levels of loyalty there is a tacit belief in a correlation between customer satisfaction and business growth. The well established research by Reichheld and Sasser1 provides further insight into the relationship between customer loyalty and profitability.

Intuition and experience indicates that satisfied customers result from satisfied and enabled employees and that the converse is also true. The assertion is that we can indirectly influence revenue growth and profitability by improving employee satisfaction. But as employee satisfaction itself is dependent on a number of situational factors how do we go about understanding and measuring employee satisfaction and then improving it over time?

Over the years we have worked with and assessed a number of tools and techniques for improving team and business performance and have found the Team Climate Survey (TCS©) to be both pragmatic and effective.
The TCS© asks each member of a team to respond to 27 questions covering the following five key business performance areas:

• Goals – the clarity of the team’s goals, direction and focus
• Roles – the clarity of individual roles, contributions and leadership effectiveness
• Processes – the effectiveness of performance management, decision making, conflict management, communications and planning
• Culture – the impact of management style and operating culture on accountability, trust recognition and drive for results
• Connection – the team’s morale, self-belief and resilience

Each of the 27 questions requires three responses:

1. Where do you think the team is now?
2. Where do you believe the team ought to be?
3. Where do you believe the business unit is as a whole?

One company that has used the TCS© for a number of years plotted their TCS© index alongside customer satisfaction scores and found a strong positive correlation between the two indices.

The TCS© is quick to complete and has a low deployment cost per head. As TCS© is an on-line survey it is also quick to deploy. The TCS© provides straightforward reporting enabling prioritisation of improvement activities and the measurement of progress over time.

“TCS has been invaluable in enabling us to focus and improve our performance over the last 3 years” Martin Yates, Customer Service Director, Reuters.

We would be delighted to discuss the TCS© with you in more detail and if this is of interest please contact PI Consulting using one of the means below:

Telephone: 0044 (0) 1763 226244

E-mail: information@piconsulting.org.uk

(1) Zero Defections: Quality Comes to Services, Frederick F. Reichheld and W Earl Sasser, Jr., HBR September – October 1990.

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