The age of instant gratification has presented businesses with mounting pressure to deliver top quality goods and services to meet the ever-changing demands of customers. Businesses only have a few opportunities to meet customer expectations, or surpass them, to win a chance for continued business.
This challenge starts with operations, and it culminates in customer satisfaction.
Defining Satisfaction
Customer satisfaction is an important measure of company success, understood as the sum of customer sentiment towards the brand. This measure identifies whether the company’s products, services, and overall capabilities have met their expectations.
This aspect of the customer experience is quite nuanced, representing thousands of opinions. So, companies determine their customer satisfaction levels through a mix of both qualitative and quantitative data. Since this metric is usually understood as a Key Performance Indicator (KPI), it draws on ratings and scales like the Customer Satisfaction Score (CSAT) and the Net Promoter Score (NPS) which can be easily conducted on a large scale and analyzed. Third parties also conduct these analyses for different brands, such as the American Customer Satisfaction Index (ASCI). The emerging patterns are then supplemented with qualitative context from the anecdotes and feedback provided by surveys. There also exists a range of frameworks that help companies determine how various aspects of expectations and brand imagery influence one another to form satisfaction, such as the Taiwan Customer Satisfaction Index (TSCI) model.
From this comprehensive network of data points and references, companies can better understand their customers and develop new action plans to continue meeting expectations.
Attaining a high level of customer satisfaction delivers a host of benefits for companies that are able to achieve it. The more satisfied the customers are, the more likely they are to continue engaging with your business, which provides more opportunities for the company to build brand trust and loyalty. In turn, the company’s reputation and appeal can improve, garnering more attention. The consumers themselves effectively become brand ambassadors through word-of-mouth. With more attention and more customers, the company’s financial performance, growth, and development are elevated.
However, low customer satisfaction can adversely harm your company’s reputation. Negative experiences diminish brand loyalty and customer retention. Unfortunately, such negative experiences occur due to companies diverting focus from quality in favor of quantity. As they hop on the latest trends by offering rushed products and services, they often put quality assurance and customer service on the wayside.
To be proactive in emphasizing customer satisfaction, companies should look at how their operations affect product and service quality, thus the customer experience.
The Role of Operations
Business operations refer to the day-to-day processes and activities necessary in increasing the company’s value and income.
The specific arrangement of operational divisions can differ between industries and even companies, but the Corporate Finance Institute (CFI) lists a few examples that can be used as reference. For industries with physical products, like retail, their operations usually involve materials acquisition, research and development, manufacturing, sales and marketing, and customer service. For the service industries, there are two main operational divisions: the front end, which consists of the workforce, their service delivery, and customer relations; and the back end, inclusive of mailroom, recruitment and human resources.
The relationship between operations and customer satisfaction is straightforward. When businesses focus on efficient and excellent operations, they can accurately respond to the shifting needs of their consumers, thereby emphasizing their quality of work and elevating customer satisfaction.
This is the objective of operations management, or the discipline concerned with operational optimization, efficiency, and excellence. While it manifests in distinct types, such as supply chain management and inventory management, operations management involves the effective use of resources, at minimal cost and risk. As companies grow and scale up, so will the importance of this discipline.
Different Operational Approaches
There are a range of techniques and tools that can be employed to tackle individual operational concerns like CRM protocols or supply chain blocks, but departmental or organization-wide approaches are better recommended. These concerns do not exist in a vacuum, as they affect and are affected by the systems that surround them. Individual actions should be implemented in the service of overall improvement and go beyond minor, isolated changes. In fact, fostering reliable and dependable operations supports not just satisfaction but long-term customer loyalty.
In this case study, an agritech (agricultural technology) firm saw declining customer satisfaction and increasing service issues as it scaled operations. While a shift in technology use or workflow changes may have met some of the emerging gaps, these measures would have had a limited effect. The company enacted a five-phase plan based on the Customer Service Excellence methodology which carefully examined current service operations, analyzed the customers’ experiences, and allowed for the development of appropriate training and integration measures, as well as a plan for continuous improvement. In the end, this firm saw its CSAT increase by 15% in the first year after implementation, a 5% increase in customer retention, and a 10 to 15% increase in revenue.
A telecommunications provider saw similar success after it implemented the Strategic Analysis and Execution Methodology, which approached process optimization with the lens of diagnostics and performance management. In the end, the company was able to reduce its average handling time by 20% and increased the first-call resolution rate by 15%, leading to a 10% increase in customer satisfaction scores.
The Shingo Institute of Utah State University suggests shaping business operations around a sustainable culture of organization excellence, or the approach that highlights continuous improvement of the entire enterprise through empowerment. Ten qualities are highlighted in the Shingo Guiding Principles. Altogether, the principles encourage managers and employees to approach operations with dignity, critical thinking, and active participation to create a workflow that is human-centric, efficient, and valued. By these standards, dozens of companies have transformed their operations across the world. They are recognized through the Shingo Prize, Silver and Bronze Medallions—respectively highlighting successful transformative journeys, companies in the middle of the process, and those in the initial stages.
Reaching a High Level of Customer Satisfaction
Elevating customer satisfaction through operations is a lengthy and challenging process since it requires an analysis of how the organization’s components affect each other in attempting to meet customer expectations. The plan of action may not necessarily have to involve the entire organization, it can be as small as a change in protocol, the integration of modern technology, or outsourcing non-core functions. But, the company must look out for how these changes affect the company, product and service quality, and the customers.
Those who understand their customers’ expectations and respond accordingly are set up to thrive. For more information on how DBSA employs outsourcing and technology to enhance your business operations, visit our website today.
