Why client satisfaction is so important? (even for internal clients)

I recently conducted a survey about the challenges of software development outsourcing and the “poor/slow provider’s response to client’s needs” ranked 2nd (the first was “communication/culture issues”), showing that, even in the “customer is always right” era, companies are still struggling (or unwilling) to deliver an outstanding service to keep their clients satisfied. 

From the perspective of the supplier, the market rules, therefore, matching their products with the market needs is paramount; it’s not casual that startups (literally) die trying to reach the holy grail of product-market fit. And this is an endless iterative process because the context is constantly changing and you need an excellent feedback mechanism to continue to evolve and improve your product to keep it aligned with client needs. The acquisition cost for new customers is usually high, but losing existing ones is even more costly. In addition, if you want to grow, you must retain customers along with acquiring new ones.

From a client perspective, you obviously want a great product, but excellent customer service is also very important, because an inadequate or slow response from your suppliers can produce several problems and delays for your own customers and hidden costs for you.

Should the IT department measure client satisfaction internally?

The IT department, like any other department in the organization, must be aware of the quality of its supplier's products and customer satisfaction performance to ensure that the supplier provides high-quality products and services and will respond promptly to any issues or new requirements, avoiding internal difficulties and delays.

But should the IT department measure the satisfaction of its internal clients? I think the answer is: definitely yes. I know this seems like a “little to gain and much to lose” situation, you have many budget restrictions, a small team and a lot of requirements from all the other departments in the organization. Yet, knowing what the other’s opinion is, where to improve, is crucial to continuous improvement. Building an efficient feedback mechanism between your team and the internal clients will put your department on the right track to success. Additionally, collecting this feedback information will improve the internal image of the department,facilitate the request for more resources, prevent future problems, help mitigate risks and avoid user reluctance to adopt new apps or processes.

How to measure it?

There are several metrics to measure client satisfaction:

• Net Promoter Score (NPS)

NPS is widely used and implemented by most Fortune 1000 companies, and you were probably asked at least a couple of times: “How likely are you to recommend ………… to a friend or colleague?”. The survey consists of this single question (although it can be repeated for different products/services/situations) using a 11-value scale from “0 - not at all likely” to “10 - very likely”. Then the results are reported in a -100 to +100 score, a higher score is better.

• Customer Satisfaction Score (CSAT)

CSAT is often a “transactional” metric, which means that you should try to get a CSAT score immediately after the client interacts with a product or service. Just ask how satisfied (using 1-5,  1-10 or any other scale) the client is with the product/service he/she just used.

• Customer Effort Score (CES)

CES tries to gauge the ease of the user experience. It still measures satisfaction, but focuses on how much effort the experience required.

• Customer Retention Rate (CRR)

The CRR is the percentage of your customers who stay with you (and keep buying your services) during a period of time.

• First Response Time (FRT)

This KPI is represented by the time (measured in minutes, hours or days) that a customer has to wait after an interaction with your company (submit a support ticket, send a question, request new services, etc.). This is very important because several surveys show that the speed of response is often more important than the ability to resolve the issue quickly. People value a quick response even when that response does not represent the solution to their problem.

Considerations

More is not always better, smaller scales are best suited to deal with cultural differences, for instance, an American is more likely to rate a service using extremes like “awesome” or “terrible” than a German or a Japanese.

Another good advice when dealing with multicultural audiences is to label only the extremes because “Excellent” and “Good” may not be at the same conceptual distance in the US as “Excelente” y “Bueno” in Spain.

Can there be something like too much customer satisfaction?

According to some experts, customers are more willing to punish bad service (an airline that loses your bags, a call to a support technician that keeps you on hold forever, a fly on your soup) than to reward an amazing service. They say that exceeding customer expectations does little to increase loyalty, is expensive and provides little return on that investment.

The NPS creators have a different opinion, they cite several examples, companies like Charles Schwab that tripled its stock price since the adoption of the Net Promoter System, Rackspace growing rapidly because of their “fanatical support” and American Express improving efficiency, service margins and lowering employee attrition.

I personally think that companies exist because of their clients, nothing is more important than making them happy to buy again.

How do we rank?

Because we believe that taking care of our clients is the most vital task, our vision is to be the global software development company with the highest customer satisfaction scores.

Read more about our client satisfaction KPIs and what we do: https://venon.solutions/en/about/