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Customer Satisfaction Research and Mystery Shopping: Why do Both?, Written by NOP World
Customer service is one of the principal drivers of customer loyalty and referral but, along with unreliability, a principal cause of customer dissatisfaction. This paper describes the complementary roles mystery shopping programmes and customer satisfaction research can play in helping an organisation to design and then monitor the performance of its customer service delivery processes.
Today, managers recognise service delivery as one of the factors which has a direct and measurable effect on profitable growth. Managers have demonstrated that, by improving customer service delivery, organisations can make significant and sustainable gains in the market. The service delivery process has many discrete, albeit inter-linked, elements, each of which is a ‘moment of truth’ for the customer. Each element carries within it the seeds of customer satisfaction (a core reason for mystery shopping using the ‘sample size of one’ - you get only one chance to make a good first impression!). And this demands that managers get an in-depth understanding of the different moments of truth that make up the customer’s current service experience.
The key to service process ‘quality’ is designing systems that allow the right job to be done first time. This means identifying: the important features of the service delivery process (the roles of people, and of product, process and physical environment – the enabling factors); the extent to which the process delivers the brand promise as well as meeting customers’ expectations; and if it provides competitive advantage through adding value.
The Relationship between Mystery Shopping Programmes and Customer Satisfaction Surveys
In any effort to satisfy customers it is essential to start with a clear understanding of both customer expectations and the function they perform. A useful definition and a description are as follows:
- Customers’ expectations of service quality may be defined as the beliefs they hold (about a service); these beliefs serve as standards or reference points against which customers can judge performance.
- Customers’ perceptions of service quality result from a comparison of these beliefs with actual performance. In other words, customers’ expectations serve as standards against which subsequent experiences are compared.
To understand what ‘delivering service’ means – to the customer, not to the product or service provider - requires being clear about two factors. First, each and every stage of the service delivery process – inputs, the processing of inputs, and outputs/impact – has to be understood in detail. As mentioned above, purchase transactions of any kind take the form of a series of (often momentary) service ‘encounters’. Customers will only stay customers if they are satisfied with all the discrete factors that, in aggregate, make for excellent service. Every encounter acts as a ‘moment of truth’ for the customer, when they re-evaluate the service delivery process. To create a positive impression, each encounter must be dealt with in a way that the customer perceives as meeting their expectations. Second, the level of service expected at each of these encounters will vary (for example, the level of service expected of the receptionist will differ from that expected of the consultant), and these variations must also be understood in detail.
So it is only through a context-specific understanding of customers’ expectations that customer service can be defined in a useable manner. And only then can each element of the service delivery process be designed to ensure that the level of service actually provided meets expectations, and so contributes to customer satisfaction.
Mystery shopping has gained acceptance as a mainstream management tool for measuring - from the customer perspective - service performance and thereby enabling the factors affecting customer loyalty to be better understood – and so better managed. Better management in this context requires an information system that enables users to see their business as a series of links in an economic or value chain. This chain must be understood as a whole in order to manage costs (inputs), and thereby manage yields (outputs and impact). At the centre of managing yields is one question ‘Which single activity (of the organisation) is at the centre of costs and of yields?’ In every commercial activity (and in most non-commercial activities too), the answer is ‘meeting customers’ expectations’.
Customer satisfaction research is effective in understanding, subjectively, customers' attitudes and perceptions, i.e. the outcomes, after having experienced the service delivery process. But it is widely recognised that customer satisfaction research cannot on its own provide the kind of detailed information or ‘feel’ that enables management to identify and address any weaknesses in the service delivery process. Customers (usually) are unable to remember the detail of a service experience, being able (again, usually) to give only an overall impression of what happened. Even during exit interviews respondents find it difficult to recall a recent service encounter in detail sufficient to aid management initiatives to improve the service delivery process. Further, customer satisfaction levels do not change dramatically over short periods, and thus, in themselves, cannot provide a useable benchmark against which service performance can be evaluated.
Now the complementary nature of mystery shopping programmes and customer satisfaction research becomes apparent - mystery shopping focuses on measuring process performance (usually in absolute terms against service standards but often also in relative terms against competitors); customer satisfaction research focuses on measuring outcomes.
In this model, human and other resource ‘inputs’ flow through the ‘process’ of product or service delivery, thereby creating outputs and outcomes (satisfied customers) that impact on financial performance. In order to understand what lies behind outcomes it is necessary to look at inputs, processes and outputs.
Using this model we can identify the two key factors that drive the demand for mystery shopping: i) customer service is located within the process element of the value chain; ii) the resulting need to relate measures of process performance to measures of inputs and to measures of outcomes/impacts.