Why “100%” is the percentage of choice for highly successful businesses

There should not be a business, in any corner of the world that does not recognise the importance of customer satisfaction. Yet there is one aspect to measuring customer satisfaction that I believe many business owners and Directors do not recognise because it’s to do with “statistics”.

I was fortunate yesterday to be in a meeting with a British organisation that, for the most part, get their customer satisfaction right and are well loved by many because of it. Nevertheless I shared with them my theory and they recognised it as something that could blind-side them. So if it can blind-side them, how many other businesses out there don’t see its relevance for their industry?

The description of the theory must start with one basic assumption. This will not be true in every case, but is not far from reality. The assumption is it only takes one bad experience for a customer to take their business elsewhere. Now, as customers we can be forgiving in some situations, depending I guess upon the severity of the incident, the magnitude of the investment and the willingness of the management to rectify it. However, I am sure most businesses would agree that this assumption is a pretty reasonable one.

Many businesses, particularly those who serve the general public in some way, will have some kind of metric for customer satisfaction. Irrespective of how it is worded, it basically boils down to – “was I satisfied with my experience on this particular occasion?” Any business that collects data of this kind will perhaps have some kind of target. This should hopefully be quite high, such as 80% or 90% satisfaction. So when the results of any measurement campaign are presented back and the number is say 86%, it sounds like things are going pretty well?

Here’s the rub and it also happens to be the statistics bit. The customers of these particular establishments may well return several times each year, over several years. If, like my meeting yesterday, the organisation has several different geographic sites, then there are likely to be many more experiences by the customer base to take into account. Let’s return to our hypothetical 86%. It sounds great, but it also means that 14% were dissatisfied. Notwithstanding purely unreasonable customers or one-off situations that are impossible to mitigate for, this means that some aspect of the business clearly needs to be addressed.

Now it could be that those 86% will continue to be satisfied each time they visit and that the 14% simply are not a suitable demographic for the brand or business in question. The technical word for this is heterogeneity. Your business is focused on serving the 86% and the 14% have somehow slipped into the mix. Alternatively, it could be that those 86% may experience the same issue or adverse event of the 14% in any subsequent visit. If so, then the chances are that a great majority of the customer base will, at some stage in their life cycle, consider their loyalty to the particular business.

why 86% customer satisfaction is not good enough

So the point is this. The only customer satisfaction target any business should set is 100%. Any deviation from that needs to be looked at seriously and corrected. Sure, you are always going to get scenarios such as an adult couple going to a restaurant full of noisy families and finding it not to their liking. This could be the 14% slippage I described above. But 14% is quite a large slice of revenue not to at least consider cordoning off an area specifically for them. Total Quality Management is the technical business term that works on the premise of 100%. It is often assumed to belong purely in the area of manufacturing but in fact has far wider reaching relevance.

If this applies to your business then I’d be very interested to know if you think 100% is an achievable ambition.

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