Importance of Customer Feedback - Coursework Example

Importance of Customer Feedback Name Course Date Introduction Feedback from customers and how it is managed is very important for businesses that are committed to establishing and pursuing long-term relationships with their customers. A word of mouth from a customer can have powerful impact on the reputation of an organization and should therefore be well managed. Customer feedback helps the management of an organization to develop a sense of direction since the ultimate goal of an organization is at satisfy customers. This report looks at details regarding customer feedback including why it is important, its benefits and how it can be collected. Definition and types of Customer Feedback Customer feedback refers to any information given back by the customer regarding their satisfaction or dissatisfaction with certain product or service received. The information can be obtained through conducting surveys, filling online forms, emails or other means of delivering the message to the organization. Customer feedbacks are used by the organization in improving and addressing the needs raised by customers1. There are two types of customer feedback; positive feedback and negative feedback. Positive feedback refers to affirming comments from satisfied customers. It focuses on events that were successful and is a confirmation that the organization is doing well. It is important in motivating the staff since it informs that the events were successful and should be continued. Negative feedback refers to information from dissatisfied customers. It focuses on events that were not successful which should not be repeated. Negative feedback is an important indicator about the things that an organization needs to do so attract and maintain customers. Negative feedback is usually obtained through complaints from customers2. Methods of gathering customer feedback Modern technology has made it possible to use a variety of methods to gather customer feedback. These methods include: Customer surveys Surveys can be used to obtain feedback from a wide range of customers. They are used to uncover even the small things that an organization might be overlooking. Customer survey may be conducted by use of questionnaires that are well designed to capture adequate details. The questionnaires should contain short, few and precise questions3. Surveys can be done in three different ways: Behavioral insight surveys: these are personalized surveys that help an organization to understand the needs of their customers on an individual level. It is aimed at understanding the unique needs of each customer. The survey is conducted by listening to customers form their own environment. Telephone surveys: these are personalized customer surveys conducted via the phone, mostly used on specific customers. Such customers can be identified through other means and then phone calls can be used to obtain more detailed information that can make better customer feedback. Phone call surveys can enable better control of that standard of information obtained as well as those to be interviewed. Mobile surveys: this involves obtaining customer feedback through text messages after an event. The organization can also send online links to customers via text messages where they can complete the survey. This method can also be to obtain information from busy customers4. Feedback forms These can be in hard copy or online forms posted on the company’s website. They should have a few questions most of which should be closed-ended. Online feedback forms can be an easy was for exchanging information between the customers and the organization. Questions used in feedback forms should have a rating scale which can help to track changes in customer satisfaction over time. The forms should have a clear purpose as to why the organization is asking for customer feedback which should aim at improving its service delivery. The organization should also make a follow up with customers who give low rating to be able to understand the reasons for their dissatisfaction. Focus groups This is a method that involves asking a group of people about their opinions, believes, attitudes and perception towards a certain product, service or the organization. This method is most effective for a new product, or when a company is introducing a new concept. The method enables the organization to know who their target customers are and also where there is a good market for their product. One of the benefits of focus group is that the feedback is obtained in a real-world environment enabling the researcher to learn what the customers think when they are answering the questions. Focus groups are usually conducted in an informal and unstructured way where the researcher are also able to experience whet the customers feel5. Social networks Social network sites can be used to obtain plenty of customer feedback. These are sites such as Facebook, Twitter, and Linkedln among others. However, it is a challenge for organizations to effectively monitor the feedback from social network sites and use it meaningfully. Flexibility of social media makes it a useful channel for gathering high quality customer feedback. Organizations can use social media to portray a friendly face making it accessible to more customers. Social networks offer the benefit of providing an easy way for the organization to respond to feedback from customers and this is an advantage to the organization. The presence of an organization in the social networks makes the customers to feel in touch with the company and make it able to strengthen their relationship. When customers are familiar with the social network sites, they are able to provide honest and accurate feedback which is helpful to the organization. Social media is a necessity for businesses that want to make use of customer feedback for their growth6. The benefits of collecting Customer Satisfaction information Customer satisfaction information is an indication of company’s ability to produce goods and services that are meeting the demands of its customers. It is very important for companies to what satisfies their customers so that they come up with better services and goods tailored towards the desires of their customers. The general principle underlying obtaining customer satisfaction information is for organizations to assess the performance of their goods and services based on how they are perceived by customers. Whether the perceptions are valid or not, they still matter to an organization since they enable the organization to critically understand future customer behavior. Firms that are focusing on achieving long-term success must monitor customer satisfaction signals regarding certain products or services, as well as their relationship with the organization. Measuring customer satisfaction makes an organization to have an insight of theirs customers before and after they are offered certain goods and services. This approach helps an organization to understand the desires of the customers make improvements and also come up with better services for them7. Measuring customer satisfaction is directly linked to the quality of goods and services that a company provides. This is because companies are able to identify areas that need improvement and also identify future business opportunities according to the varying desires of the customers8. Customer satisfaction information helps companies to build competitive advantage over other companies since they are able to change and adapt faster. Due to the increasingly competitive markets, it is important for companies to focus on making their customer base happy and to avoid disappointing them. This however requires a company to have a systematic process that will enable faster acquisition of customer satisfaction information for faster corrective actions. In the current economic times where goods and services are becoming globally standardized, companies wishing to gain competitive advantage through innovativeness need to better target their customers and this can be achieved by understanding what satisfies them9. Customer satisfaction information can be used by organizations to monitor their performance over a period of time, and also measure the impact of any initiative towards service improvement. This is because customer satisfaction enables organizations to understand factors that satisfy, or dissatisfy customers. They are therefore able to properly allocate resources bearing in mind what the customers want. Customers satisfaction information enables organizations to understand other factors that may be influencing customer satisfaction and to what extent. These include factors that are out of control of the organization such as the media. The organization will also be able to determine the exact things that drive customer satisfaction during service delivery. That is, it enables an organization to understand the drivers that it can control and those that it cannot10. Generally, measuring customer satisfactions enables organizations to: know whether the business process is working well, know which areas need changes or improvements, to know the changes that resulted in improvements and also to know the perception and attitude of the customer towards the organization. Concerns associated with Customer Satisfaction data One of the challenges experienced in measurement of customer satisfaction is converting customer satisfaction into measurable factors which can be easily understood and manipulated. Concern regarding customer satisfaction data arises on areas such as: Deciding on the questions to be asked Customers may make their own interpretations of questions asked in survey or feedback forms different from what the organization wanted to investigate. This often results in inconsistent answers that do not give well defined characteristics of customer satisfaction. An organization should ensure that questions asked during the survey allow the customer to state the reasons as to why they are more or less satisfied. To ensure that questions test measurable parameters, those carrying out the research should ensure that the questions are concise, lack ambiguity and reflect one idea. Concise questions are short and easy to read. Long questions are hard to read and can make the survey to appear difficult to the customer. Ambiguous questions leads to ambiguous answers that can be difficult to draw conclusion from. Questions should be direct such that the customer understands what the researcher wants to know. Questions should reflect one idea such that one question tests one aspect and not two or many. This is to avoid frustrating customers; questions should be broken down to test one thing each11. Selecting the format for the answers The answering format provided for determines how the customers would answer the questions. For example, in testing the extent of satisfaction, Likert format can be used so that customers can indicate where more or less improvements are required. Poor answer format can deny the customers an opportunity to completely express themselves. Selecting the items to be contained in the feedback forms Since satisfaction results from different aspects of the goods and services, the questions should focus of various items that measure satisfaction. Few questions focus on few items can result in narrow information that may not give the accurate conclusion on whether the customers were really satisfied or not. The researcher can base the selection of items on best human judgment where attention should be paid on similar items. Since there lacks methodological standardized way of measuring customer satisfaction, the measuring scales may lack sufficient number of items that allow customers to make clear distinction between what satisfies them and what does not12. The time of measuring customer satisfaction There is usually difference in level of satisfaction observed when customers satisfaction is measure immediately after purchasing and thereafter. Customer satisfaction decreases as time passes. It is therefore important or the researcher to find out what are the other factors that may be influencing satisfaction that make it decrease as time passes by. How the airline may improve its collection of customer feedback For an organization to benefit from customer feedback data, it must come-up with better methods of collecting the information. Some of the things that need to be done to improve collection of customer feedback include: Guaranteeing customers of speedy response Some customers fail to give their feedback because they do not get feedback from the organization and they therefore feel as if their feedback was not acted upon. It is therefore important for organizations to responds in a timely manner to customer feedback so that they can feel that their feedback is valued. This will encourage them to keep giving feedback which will be of ultimate help to the organization. Studies on customer feedback collection have indicated that some customers do not complain or do not leave any feedback because they feel that the business owners do not really care. For an organization to get honest feedback from an organization, it must also show commitment. For example, after receiving feedback though email, it is important to respond by simply saying “we will get back to you as fast as possible”13. Engaging the customers personally Engaging customers through personal emails instead of social networks can help in obtaining honest feedback. It can also allow for further conversation with the customer and be able to obtain more information. Direct outreach through exploratory interviews Directly talking to clients can help the researcher to understand them well and also help overcome the challenges associated with unreturned feedback forms. However, when conducting the exploratory interviews, it is important or the researcher to consider the following: Focusing on the attitude of the attitude of the client: this requires he researcher to take note of how the customers are thinking about the products and services as well as the impressions they make when answering the questions. Make use of critical incident method: this is where the researcher asks the customers to give detail of incidences where they faced difficulties while making use of the organization’s services, and particular incidences where things worked well. In an airline company, the client can mention particular incidences related to customer care, delayed bookings or any other frustrating moment the customer has ever experienced when dealing with the company. Companies should ensure they have ways of having one-one-one chats with the customers regardless of the distance. They should make use of online platforms such as Skype so that distance does not become a stumbling block14. Conclusion Customer feedback is very crucial for any business that is focusing on long-term growth. This is because it informs the firm’s decision making and also influencers the roadmap the firm takes on its products. Measuring satisfaction of current customers helps the firm to know how their products are viewed by the customers as well as the attitude of customers towards the organization. However, the organization should come up with proper methods for gathering community feedback so that the information obtained is honest and helpful to the organization. Organizations should also show commitment to customer’s feedback by responding to complaints in a timely manner. Bibliography Hayes, Bob. Measuring Customer Satisfaction and Loyalty; Survey Design, Use and Statistical Analysis Methods. Milwaukee, Wisconsin: ASQ Quality Press, 2008. Hill, Nigel.& Alexander, Jim. The Handbook of Customer Satisfaction and Loyalty Measurement, 3 rd edition, Gower Publishing Limited, 2006. Bell, Simon & Luddington, James. “Coping with customer complaints”. Journal of Service Research 8, No. 3 (2006) : 221-233. Gustaffsson Anders, Johnson Michael, & Roos Ingers. “The effects of customer satisfaction, relationship commitment dimensions, and triggers on customer retention”. Journal of Marketing, 69 No. 4(2006), 210-218. Lucian Isac, Sergiu Rucu & Silviu Cureteanu. “Problems in measuring customer satisfaction”. Economy Series, Issue 4 (2012). Hill Nigel, Roche Greg, & Allen Rachel. Customer Satisfaction: The Customer Experience through the Customer's Eyes. Hampshire, Gower Publishing Limited, 2007. Gillin, Paul. “Five tips for reliable online survey results”. Business to Business Magazine, 91 No.6 (2006), 19. Heerwegh, Dirk. Effects of personal salutations in email invitations to participate in a web survey. Opinion Quarterly 69 (2005), 588-598. HM Government. How to measure customer satisfaction; a tool to improve the experience of customers. Accessed on 8th December, 2015. http://www.ccas.min- financas.pt/documentacao/how-to-measure-customer-satisfaction Bielski, Lauren. Guided by Feedback: Measuring Customer Engagement. ABA Banking Journal, 100, Issue No. 8 (2008), p44. Read More