Limitations of measuring customer satisfaction

Generally in Organizations, a CUSTOMER SATISFACTION (CSAT) survey and an ENGAGEMENT LEVEL FEEDBACK (ELF) are used to measure the customer satisfaction and the customer engagement levels, which is quite good an indicator to some extent. But the real problem or the question that one needs to ask is:

“Will a satisfied customer necessarily be a loyal customer?”

Sales and Marketing people would testify that this problem becomes more evident when any organization seeks references of existing customers to create new customers. Generally, the components of the CSAT and the ELF are as follows:

A feedback is obtained for every engagement based on a logical phase or milestone of a project. This feedback is analysed and improvement action items are taken up. A CSAT survey is conducted by an external or internal agent. The CSAT questionnaire is of different types meant for CXO, Senior management and Middle management. Based on the CSAT experience index, customers are categorised into Core, Moderate or Breakaway. Further analysis is conducted and action plan is formulated at Unit Level, Product level and account level to improve the CSAT score.

The ELF respondents are not necessarily CSAT respondents too. But many a times, the ELF can serve or at least perceived as leading indicators for the upcoming CSAT.

However the limitations that surface are:

• No mechanism is present to measure the relationships with different customers quantitatively, only measurement of customer satisfaction and engagement is done.
• No mechanism to differentiate between a satisfied customer and a loyal customer. The current model is only indicative of the loyalty parameters as part of CSAT feedback, but does not reflect the period of relationship, loyalty etc. The feedback on satisfaction is temporary and specific to the project whereas the Relationship cuts across the unit and organisation and expected to improve over the period of relationship.
• The rational and behavioural aspects of a relationship are not taken into account.
• The Models don’t take into consideration the cultural ethos and demography of the customer. For example, some of the private sector customers in India are traditionally very conservative in their rating as compared to their colleagues in PSUs. The current methods of capturing customer escalations prove to be ineffective due to lack of tracking mechanism and different customer touch points and through different medium.
• Although the CSAT is aimed at CXO-level respondents along with Middle Management and the CSAT questionnaire is accordingly placed. The level of respondent is not used as a parameter to rationalise the CSAT score and ELF Scores.  Sometimes, the project level ELF doesn’t really reflect the mood of the customer at large.
• No provision to track the risk status of the project and link it directly with the relationships. There is a need to improve the correlation between the Risk level of the project with the customer complaints and escalations. Pro-active tracking of risks and keeping that as a parameter.

Also sometimes the system tools lack placeholders to capture certain important data. Since there is no approved methodology/process to measure customer relationships quantitatively, it becomes increasingly difficult to contain escalations, to assess pro-actively the areas of improvement at customer end.  Focusing on quantifying the customer loyalty would help the sales and marketing teams to work on dissatisfied/satisfied customers and arrive at an action plan to move them to the category of Loyal Customers.