Customer satisfaction is not enough, according to a presenter at Food Marketing Institute’s Future Connect conference here on Tuesday afternoon.
Bob Whitman, chairman and chief executive officer of leadership development organization FranklinCovey, Salt Lake City, said many organizations take pride in surveys that demonstrate that their customers are satisfied, but that doesn’t necessarily mean those customers are “delighted” – and therefore recommending your business to others.
In one survey done by Bain & Co., 80% of executives said their companies were satisfying their customers, but only 8% of their customers said they were satisfied, Whitman said.
He also explained how retailers can evaluate store performance using a variety of filters to determine which ones are truly their best performers.
In one example, Whitman cited a study in which a retailer examined the top 25% of its chain of 2,400 locations in terms of sales.
Of those 600 stores, closer evaluation revealed that only 387 were in the top 25% in terms of their sales potential – that is, how much money they could be taking in given the local demographics and competitive conditions.
Those 387 stores were further whittled down to a mere 23 locations when two other filters were added: top 25% in terms of customer loyalty and top 25% in terms of employee loyalty.
“Those 23 stores are the ones to emulate,” he said.
He also cautioned against placing too much value on corporate culture to the detriment of performance. In another study measuring store financial performance against employee job satisfaction, the results revealed that often stores with sub-par sales and profits can have very happy workers.
“Great culture, while important and necessary, is insufficient,” Whitman said.