It’s one of the most basic laws of marketing: Your best source of additional business is your existing customers. But how do you keep them coming back? The key is customer satisfaction.

Marketers have always recognized the importance of customer satisfaction, but in the past it was a fuzzy concept, hard to measure and analyze. Fortunately, retail marketing software and analytics have made satisfaction metrics widely available to businesses large and small.
What marketers are finding is not surprising: There is a direct correlation between customer satisfaction and repeat business. In addition, satisfied customers come back more often and a more likely to move up to more expensive product offerings.

Measuring Satisfaction
The first step in measuring customer satisfaction is to create a survey. Drawing on your business knowledge and business analytics, develop a list of questions that address customer concerns. Customer satisfaction surveys typically use Likert-scale questions. Responses to a Likert-scale question typically range from “strongly disagree” to “strongly agree”. For example, customers might be asked how strongly they agree or disagree with a statement like this: “The restrooms at Bob’s Burgers are well-maintained.”

Once you have surveyed a significant number of customers, you need to decide what do with your data. Survey responses will tell you what customers think about a range of specific issues, but how can you get a broader sense of what customer satisfaction means for you? A statistical tool called factor analysis can help you see the big picture.

Basically, factor analysis reveals relationships between survey questions, so that instead of considering thirty different specific issues, you can focus on four or five common themes. By grouping questions, factor analysis lets you see how specific issues come together to form a pattern. For example, factor analysis might group five questions that are all related to your facilities. If most people strongly disagree that you have adequate parking and they strongly disagree that your facilities are convenient, then you can get a sense of how you can improve customer satisfaction — expand your parking lot. This is an oversimplified example. A real factor analysis can give you a valuable picture of your strengths and weaknesses in terms of customer satisfaction.

The Big Picture
One widely used template for grouping responses to customer satisfaction surveys is the RATER model, which includes the following factors:

You have conducted a well-designed customer satisfaction survey, and you’ve collected mountains of data. Now what? You’re not just going to let the results sit on a shelf in your office, but do you have a comprehensive plan to get the most value out of your investment? Here are a few suggestions about the next steps to take with the results of your survey.

Respond Quickly to Urgent Customer Problems
Often a customer satisfaction survey will include a few questions meant to identify issues that need to be addressed immediately. For example, a hotel chain might ask how long it took a customer to reach a representative on its toll free reservations line. If this is a crucial issue for the company (and it should be), then this question will be flagged for immediate analysis and action.

Other factors that might call for a quick response are very low overall ratings or the use of key words (such as “dirty” or “rude”) in written answers on the survey. If the survey was not anonymous, it may be worthwhile to contact people who responded very negatively to gain a better understanding of what went wrong. This will also show dissatisfied customers that you take their concerns seriously and you want to do something about them.

Make Someone Responsible
One way to sort responses to a customer service questionnaire is by area of responsibility in your organization. For example, certain questions may point out problems with accounting or sales or billing. By making individuals responsible for dealing with specific issues that come up in a survey, you are much more likely to get the issues resolved. If everyone is responsible for solving a problem, then no one is.

Assigning responsibility for specific issues also addresses a common problem with customer satisfaction surveys: the results don’t filter down to people who can do something about them. Too often managers circulate summaries of survey results or key findings without giving front-line staff the information they need to improve customer service.

Implement Customer-Focused Changes
Any response to customer feedback should be developed with the customer in mind. This includes setting goals for improving customer satisfaction. For example, if a customer purchase survey identifies shipping delays as a problem for your online store, you need to do more than just revamp your shipping procedures. You need to set specific goals for shipping a certain percent of orders within a day or two.

When you make customer-focused changes, let customers know about them — especially those customers who took the time and trouble to respond to your survey. To keep your message positive, present the changes as an improvement in service rather than a response to a problem.
Keep Track and Keep Asking
It’s easy to think of customer satisfaction as something you check on with a survey once a quarter or twice a year. But to get the most of out of surveys, you need to constantly keep track of how well your organization is responding to the issues customers raise. You also need to keep thinking about how to refine your survey process so that you can continue to get the information you need to keep your customers satisfied.

Whether you’re selling hot dogs or homeowners insurance, keeping your customers satisfied is essential to the survival and success of your business. Fortunately, the latest online survey software simplifies the task of collecting and analyzing data on customer satisfaction. These are powerful tools, but to use them most effectively you need to be careful not to define customer satisfaction too narrowly. Let’s take a broad look at this topic and then consider some specific aspects of customer satisfaction that you should probably be measuring.

Online surveys have transformed the field of market research. Retailers in particular are discovering how the latest internet survey software can provide valuable insights into how customers make decisions.

Going Beyond Sales Data
Traditionally retailers have relied mainly on sales data to determine their customers’ preferences. While this approach certainly has merit, it leaves many questions unanswered. Would customers prefer different brands if you offered them? Would they visit your stores more often if their shopping experience was more pleasant? Would they come more often if stores were open longer hours? These are the kinds of questions that online surveys can address.

A simple “Where would you go to buy…?” survey can give you a good idea of how customers think of your stores. In this type of survey you give customers four or five options — your store and three or four of your competitors. Then you ask a series of questions. If you operated a department store, you might ask: