Internal Memo

The following is an internal memo, written by Hearthside Chairman & CEO, Rich Scalise
to all employees on the topic of ” What Customer Satisfaction Means”.
It is reproduced here with permission. November 15, 2016.

What Customer Satisfaction Means:
A Closer Look

What exactly is “Customer Satisfaction”? We all have examples of being satisfied and dissatisfied customers, but how can we define “customer satisfaction” and why is it important?

Try this simple test. Recall the last time you were a satisfied customer. Now recall the last time you were dissatisfied. Most people remember the extremes; times they were thrilled by amazing service or extremely upset by a terrible experience. What about all instances in between “amazing” and “terrible”?

Choice and Satisfaction

If a family has five local grocery stores, the one they use most is the one they are the most satisfied with overall. It may not have the best prices, service or selection, but for some reason, it is the one they prefer. Consumers calculate many things automatically: trust, distance, convenience, quality, cleanliness, selection, price, relationships and more.

As choices increase, customers become pickier. When choices are few (e.g. cable companies) customers endure quite a lot of misery. When choices are many, such as brands of clothing, food, airlines, or cars, they become harder to satisfy.

The Real Difference

What is the REAL difference between a satisfied and dissatisfied customer? Ready? Satisfied customers stay. Dissatisfied customers leave. A customer that says they love you then takes their business elsewhere was not satisfied – at least not enough to stay – regardless of the nice things they may say or the excuses they may give.

Likewise, a customer, even a disagreeable one, that stays – is by definition – satisfied. They continue to come back and to engage. The question is, for how long. That depends on how satisfied they are, how hard it is for them change, and what their other options are.

As Choice Goes Up – Satisfaction Goes Down

When there were only two cell phone services, people chose one and endured. Now there are four major providers and many smaller ones. The result; people move for a few dollars, a new feature, or because of a friend’s recommendation. The increase in choice makes the same customers harder to please. It takes more to satisfy them.

Who Determines Satisfaction?

Satisfaction is an assessment made by the customer. Each customer bases satisfaction on different things. Something one customer cares deeply about may matter less to another. Knowing how each customer measures satisfaction is important and valuable.

What the company believes does not matter. Customers that believe they are satisfied – in fact, are satisfied. The same is true for customers that believe they are dissatisfied. Because satisfaction is an assessment that the customer makes, our opinion does not count.

Levels of Customer Satisfaction

Just like the cable customer with no choices, some customers stay only until they have another option. At that instant, they leave. These customers are Marginally Satisfied. This is the lowest level customer satisfaction – and it is dangerous. Customers that are marginally satisfied are often resentful, unhappy and the first to leave, sometimes abruptly. Too many marginally satisfied customers will destroy a business.

At the other end of the customer satisfaction scale is the Super Satisfied Customer. They love doing business with us. Super satisfied customers can be extremely demanding. The difference is that their trust is deep and they believe their needs are being met. Their volumes will grow, and they will continue to bring new projects until something alters their level of satisfaction. Super satisfied customers are rare, can be expensive to service but are also quite rewarding.

In between these two extremes, there are other levels of satisfaction. We can cover them in a later column. Understanding a customer’s satisfaction and what drives it, is a good indicator of how long they will continue to be a customer and how likely they are to bring future projects.

Levels of satisfaction are never static. They can and do change in both directions.

Satisfying Hearthside Customers

Hearthside’s contract manufacturing customers have many choices. There are hundreds of contract manufacturers. Most customers also have their own manufacturing facilities, making a change even easier for them.

Projects begin and end, but when a customer leaves, it is because we failed to satisfy them. There are almost no exceptions to this. Regardless of their words, they are moving to a solution they believe will better satisfy them. When a customer leaves, we have failed at customer satisfaction. Plain and simple.

Satisfied customers stay. Dissatisfied customers leave.

Look around your manufacturing facility. How satisfied are the customers your location serves? Do they feel properly valued, or are they looking for the first chance to leave? How can your team serve them better? These and many related questions are worthy of formal and informal discussions.

Our facility managers and their teams should know how satisfied each customer is, what it takes to keep them satisfied, and what things can be done to increase their level of satisfaction. Likewise, everyone in each location should know what is being done to increase satisfaction and to measure the results.

I look forward to hearing and seeing what each facility is doing to understand and to improve Customer Satisfaction. Thank you to everyone that focuses on our customers’ satisfaction every day. Without satisfied customers, we would not have a business.