Each month, The Salary Sage features a performance measure from Incentive Plan Builder. These measures are intended to offer you on a wide range of options suitable for including in your company's incentive plan programs.
This month, we are featuring Customer Satisfaction. Every business has customers, and how satisfied they are with your products and services determines the success of the business. Here are some guidelines on how to make Customer Service a successful incentive plan measure.
The likelihood that customers will return to purchase additional products/services and/or recommend these products and services to others.
Customer Satisfaction can be measured directly (by calling the customer, conducting surveys and/or focus groups) or indirectly (by tracking referrals and/or positive references to other customers/prospects. If you use a formal survey, once you establish a performance baseline, it is possible to set goals based on measurable improvements against this baseline.
WHEN TO USE THIS MEASURE
For a company that already has a Customer Satisfaction survey and a baseline of historical performance, all that is required is to set goals to improve this performance. For companies that have not yet developed a survey (or have not administered it long enough to have a reliable baseline) this must be done first. But that doesn't mean you can't set goals to get these things done. In fact, many companies in this situation develop a 3-year plan:
- In the first year they set goals to develop the survey.
- In the second year they set goals to establish the baseline.
- In the third year (and beyond) the set goals to improve performance against the baseline.
HOW TO USE THIS MEASURE
There are ten commonly accepted elements of Customer Satisfaction:
- Ease of Access
- Service Behaviors
- Commitment to the Customer,
Measuring Customer Satisfaction usually involve a survey where the customer ranks the company's performance on a number of these elements using a scale (i.e., from 1 to 5).
WHO IS THIS MEASURE BEST SUITED FOR?
This measure is equally useful for employees directly involved in customer service. Many companies use this measure for executives and senior managers in order to ensure they never lose sight of the importance of keeping customers happy.