James D. Power III may be one of the bravest men in the business world. During the heyday of the domestic automakers, he told a group of General Motors Corp. executives that they were doomed unless they improved their products immediately.
The GM execs practically shouted him off the stage during his presentation, Power says in a new book, Satisfaction: How Every Great Company Listens to the Voice of the Customer. But Power never backed down from his assertion, which proved to be 100 percent accurate. The Detroit-based automaker’s market share quickly began to tank.
How did Power know on that wintry day in January 1980 that GM would suffer a downfall? Because Power understood the power and weight of something called customer satisfaction. And he knew GM was failing to provide that key element to an increasingly demanding car-buying audience.
Power created his company, J.D. Power & Associates , on a simple premise: When you listen to the people who buy your products, they tend to tell you the truth about what you are doing right and, more importantly, what you are doing wrong.
Over the past four decades, J.D. Power & Associates has become intimately linked with customer satisfaction. The company studies consumer tastes and opinions, and then shares them with companies and industry rivals. Whether the executives care to listen to those opinions tends to be another story.
J.D. Power IV (the founder’s oldest son) and Chris Denove penned “Satisfaction” to explain the significance of the company’s work customer loyalty. But don’t take their word for it, studies show that businesses with high satisfaction rates generally have lower operating costs, are able to charge more for their products or services and enjoy better return on investment than those who miss this all-important link.
In “Satisfaction,” readers learn everything they need to know about customer care and then some. The lessons come in the form of examples—Power and Denove take some of the nation’s best-known companies and explain point by point how they manage to impress and retain their clients.
For example, the billion-dollar office supplies giant Staples made major strides with its customer satisfaction scores when it changed the way it handled its call-center policies. Previously, the company allowed its center employees to talk for only a set amount of time to each customer, hoping to take more calls and thus limit its wait lists.
Staples decided to update its rules, telling its workers to stay on the line as long as needed to solve a customer’s problem. They told their associates “the right length of a call is whatever the amount of time your customer needs,” according to one executive.
The company’s sales increased, and the executives credit the growth to happier customers. When someone got the result they wanted during their telephone call, they tended to become more loyal customers. They spent more at Staples over time, which offset the increased costs of hiring better quality call-center staff.
The lesson Staples learned is that when you help a customer resolve their problems, it actually makes him or her more faithful to your company than those who have an average or typical experiences, the authors note.
Another key lesson Denove and Power share is about hiring. Concentrating your time and energy on the employees who are your public problem solvers is a company’s best investment, they say.
The book notes there are two important truths to customer satisfaction: executives set the tone, and the entry-level or lowest-paid employees do everything else. By bringing in the best workers you can, you are helping improve your level of customer satisfaction right from the start. Also, keeping these employees motivated and educated will keep your engines humming for many successful years, the authors say.
Interestingly, the authors note that companies need not go overboard to please everyone. In fact, there is a limit to how much you can do to make sure your clients and employees are happy.
Take the discount airline company JetBlue. The executives there knew they could not offer every amenity under the sun and still offer low prices. So instead of paying higher than average wages to its employees, JetBlue saves money on personnel by looking for low-cost programs that draws top-notch workers.
To that end, JetBlue allows its reservation agents to work from home. It does not cost the company that much and it gives the agents a world of freedom. And its flight attendants are allowed to work in two-person teams, which lets them set up schedules that are incredibly flexible and limits their hours to only what they want to work.
“Satisfaction” is one of those business book reads that is both entertaining and informative throughout its nearly 250 pages. Although the book’s basic premise—listen to your customers— might sound like Marketing 101, the authors make it clear that many companies ignore this fact time and time again.
And figuring out what your customers want does not require a large investment. Rather, it can be determined just by opening your eyes and ears to the feedback people are offering. Everything from email complaints to thank-you letters give a company the opportunity to examine how they are performing.
The voice of the consumer is loud and clear, Denove and Power say. The only question is whether your company has a willingness to listen.
