How Measuring Customer Satisfaction Can Improve Customer Loyalty

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A Rice/NYU study showed that customers who took part in a customer-satisfaction survey were more loyal than those who did not.  These customers were:

• More than three times as likely to have done new business with the firm.
• Less than half as likely to have defected.
• More profitable than the control group.
• Did new business at a faster rate and defected less than customers in the control group, even 12 months later.

The study, "How Surveys Influence Customers", published in the Harvard Business Review in 2002, has some important caveats, of course.  But the authors, Paul Dholakia and Vicki Morwitz, theorize about how surveys can improve satisfaction:

Several theories of consumer psychology might apply. The simplest is that satisfaction surveys appeal to customers' desire to be coddled, reinforcing positive feelings they may already have about the surveying organization and making them more likely to buy its products. Surveys may also increase people's awareness of a company's products and thereby encourage future purchases.  More subtle is the idea that the very process of asking people their opinions can induce them to form judgments that otherwise wouldn't occur to them-that they really do like a company's estate-planning services, for example.  These so-called measurement-induced judgments, the theory holds, can influence later behavior.

Combine this with the use of survey triggers/email alerts to intervene when customers provide low satisfaction ratings, and you have two compelling arguments for how conducting customer satisfaction surveys can improve overall satisfaction levels.