Monday, 17 December 2007 22:25
Listening Customers More, Earning More
According to the researches, 80% of total sales volume is usually made to %20 of customers by the companies. The companies aiming to increase their revenues are trying to focus on those top-customer category and increase the volume of the sales to be made this customer category. However, the companies focusing on top customer category overlook the customers who can not use their purchase potential due to their displeasure regarding service quality. According to the study performed in 2006 by Prof.Claes Furnell and his colleagues in University of Michigan, companies with high customer satisfaction get higher turnover than S&P 500 Companies. In other words, the value and yield of companies, which are able to increase customer satisfaction, increased more than other companies.
Similar studies were made and results were shared with public. For this reason, most of the executives say “Customer satisfaction is the most crucial matter for me”. However, most of the executives usually focus on actual matters in order to get profit in short-term although they tell that they care about customer satisfaction, and, they do not attach priority on customer satisfaction.
Similar studies were made and results were shared with public. For this reason, most of the executives say “Customer satisfaction is the most crucial matter for me”. However, most of the executives usually focus on actual matters in order to get profit in short-term although they tell that they care about customer satisfaction, and, they do not attach priority on customer satisfaction.
A company is founded not to make customers happy but get profit. In addition, the duty of an executive is make his company profitable and increase its market value. On the other hand, an increase in customer satisfaction can not be achieved in one night. Every member and component of the company should work hard for long time on complicated value chains in order to rise customer satisfaction level.
J.D.Power, found out that the companies with improved customer satisfaction have higher company value in his research made between the years of 1999-2004. According to the results of aforementioned research, shareholder value of companies, which improved customer satisfaction, have risen up around 52%, whereas shareholder value of companies, which declined customer satisfaction, have reduced around 28%.
On the other hand, J.D.Power has proved and clarified the close relationship between customer satisfaction and profitability within his another research made between 1998-2003. Sales volume of companies, which are not able to satisfy their customers, have declined 4% whereas sales volume of companies, which are able to satisfy their customers, have risen 44%.
The correlation between customer satisfaction and sales is also positive. According to a research made among Nissan dealers in North America, sales closure rate of dealers, which can not satisfy their customers, is around 56% whereas the it is around 79% for the companies who can satisfy their customers.
It is not possible to say that companies, which has high customer satisfaction ranking, have been doing everything perfectly, but, companies who apply close and friendly approaches to their customers, can fix their mistakes without offending their customers. The customer, who confronts such mistakes, focuses on the solution rather than the mistake itself and gives positive marks for friendly approaches.
The correlation between customer satisfaction and sales is also positive. According to a research made among Nissan dealers in North America, sales closure rate of dealers, which can not satisfy their customers, is around 56% whereas the it is around 79% for the companies who can satisfy their customers.
It is not possible to say that companies, which has high customer satisfaction ranking, have been doing everything perfectly, but, companies who apply close and friendly approaches to their customers, can fix their mistakes without offending their customers. The customer, who confronts such mistakes, focuses on the solution rather than the mistake itself and gives positive marks for friendly approaches.
As a conclusion, customer satisfaction is a very important factor to increase values, profitability and sales volumes of companies. Executives, who add customer satisfaction into their long-term targets, ensure customer satisfaction to be followed and monitored in every level of company, also, follow customer satisfaction outcomes and profit results in the same page. Executives, who do not follow customer satisfaction in a serious and strict manner, push their companies into jeopardy.
M.Ayhan Dayoğlu
17 December 2007
References:
Satisfaction/Chris Denove & James D.Power IV
Beating The Market with Customer Satisfaction/Christopher W.Hart
Driving Customer Satisfaction/Andy Taylor
