What is Customer satisfaction index?

Business case - does increased customer satisfaction = increased revenue?

• I work for a healthcare information and distribution company. I want to know what impact increased customer satisfaction would translate to in incremental sales revenue, and is there a corresponding revenue increase for each point increase in customer satisfaction.

• Answer:

  Greetings! To first address the flip side of your inquiry, the Customer Care Institute offers a report at http://www.customercare.com/industry_news/archives/service.htm which reads: "Study Confirms Negative Impact of Poor Service "Some 46% of respondents to a recent survey said they had dropped a credit card provider because of poor customer service. Some 43% have dropped banks, 32% dropped an Internet service provider, 30% dropped a phone company and 22% dropped a pager or cellular phone vendor for the same reason. "Over half (54%) of consumers surveyed said they wait on hold for no more than five minutes before considering the customer service to be poor. Half of those polled said they search for information on a vendor, biller or bank Website before calling customer service to find answers to their questions. "The study also reported that over half of consumers (53%) say automated phone systems are the most frustrating aspect of customer service. "The study, conducted by Mobius Management Systems, Inc., a provider of Web-based software for managing and presenting enterprise content, surveyed 300 adults who are consumers of service providers in the various industries the company serves." Seibel presents the results of a customer satisfaction study at http://www.siebel.com/bestpractices/bt.shtm . Among the results, they published: 20 percent increase in revenue per customer 8 percent increase in customer satisfaction 34 percent increase in employee satisfaction 5,000 new accounts identified (in a 12-*week [*should read month, I think - see chart below it on the web site] period) The study objectives were as follows: "In 2001, BT Retail decided to undertake a bold customer-centric strategy to improve its competitive position. The objective of this strategy was twofold: to increase customer retention and revenue by improving its customer service capabilities and to reduce costs through improved efficiency and greater productivity. BT Retail defined customer satisfaction, revenue per customer, and employee satisfaction as the metrics that would determine the level of the project's success." The entire report can be accessed at http://www.siebel.com/bestpractices/bt.shtm Another study is available at http://www.excellence-ireland.ie/bexcellence.html. Their Business Excellence model scoring system "allocates 1,000 points divided equally between the Management Practice and the Results." Their study allocates 50% of the points for management practices and 50% of the points for results. A keyphrase I found regarding health care was the integration of the term "wellness" into the health care industry (http://www.brilliantcompensation.org/web/king-press_ce.asp): "A rapidly expanding group of health care professionals, chiropractors, dentists, nutritionists, paramedics, pharmacists, physical therapists, primary care physicians, psychiatrists, surgeons, trainers, etc. are integrating the concept of the "wellness center" into their health care policies." They also offered the following monthly profit equation: "460 families x $150 (wholesale price) bought directly from the company = $69,000 monthly wholesale revenue "$69,000 monthly wholesale revenue x 20% commission =$13,800 commission to the wellness center "With this patient usage level, the wellness center earned an average of $13,800 per month, $165,600 per year, with modest incremental expense to the practice. All of the families were on automatic delivery directly from the supplier company. You can manipulate the profit equation and develop your own pro forma for your practice." Much of what I discovered concerned online or telemarketing services as opposed to traditional walk-in business services. If you could provide some clarification in these areas, I will be happy to conduct additional searches to secure further information you may require. SEARCH TERMS: revenue increase customer satisfaction customer service impact on business customer service impact on business points incremental sales revenue customer service incremental sales revenue point increase practices determining incremental sales revenue health care