Friday, December 01, 2006

How "satisfied" can idiots be?

Walking past Shibuya Station yesterday, I was greeted by building-size posters celebrating KDDI Au's discovery of "customer satisfaction". Interestingly, it was matched by a poster 90 degrees to its left offering Softbank Vodaphone's (Yoda-phone?) version of mobile telephony. Time for a rant!

I can't get why companies can't get no satisfaction. I have never come across a more useless metric and indicator than "satisfaction", and most attempts to link this to behavior flounder around the notion of predictability. Here's why it's useless:
  • Satisfaction measures a customer's response to a past intervention or service. For that reason, it's time bound and thus historical rather than predictive.
  • Satisfaction can not be tied to loyalty, unless the initial reason for responding to the intervention or consuming the product/service is made explicit and included in the measurement.
  • Satisfaction is transitory in nature, and can not often be shown to make transactional contributions to brand loyalty or engagement.
  • Satisfaction needs to be framed inside a construct that handles propensity to switch.
  • In a contemporary environment where technology and connectivity offer the customer significant voice and active brand participation, satisfaction is considered the norm by customers. Therefore, only negative satisfaction (dissatisfaction? No, that's different...) is tractable in the model.

While many people talk about brand loyalty, the only effective metric that matters and can be shown to postively impact RFM (in my humble view) is customer engagement. As a function of how likely a customer is to recommend a brand or experience (remember that word...) and a number of secondary variables, engagement can be represented as a vector - meaning for the idiots that we can give it both a value and a directional component. That in turn means we can make decisions about interventions that will impact future engagement scores. In other words, while satisfaction numbers tell us we screwed something up, engagement numbers give us the opportunity to impact the emotional relationship with customers. I'd rather know how many customers I can gain than how many I lost.

Engagement, just like dating and mating, is the result of an experience that is shared between the provider and the consumer. We dance, get to know one another, realize that we have some things in common, and establish a relationship with mutual value. We reproduce ourselves (tell other people about the brand).

That's why, boys and girls, customer experience is the important component of both strategy and execution and satisfaction focuses only on execution. That's why transformation practice demands a detailed understanding of the customer experience, whereas satisfaction can only drive kaizen, or continuous improvement. And it's why customer experience lets us grow a business, while satisfaction only lets us defend an existing market position.

Or am I an idiot?

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