Because of now ubiquitous consumer ratings (see sites such as TripAdvisor, Yelp, Amazon, Google, etc) we’re in the age of hyper-empowered consumers. Research is conducted online, and purchase decisions are made (or heavily influenced) well before the traditional buy-cycle begins.

This is a good thing. As a consumer, I believe that they provide higher value and reliability on nearly every purchase I make.

The interesting thing about all of these ratings is that they are informal – incredibly unscientific, open to manipulation – and we all know and accept this. Yet somehow they function at a base level of societal trust. Unless we’re dealing with high-impact items such as medication-delivery or safety issues, this suits the performance improvement imperative just fine.

Call it ‘benchmarking’ vs ‘surveying’.

Benchmarking can be a very powerful tool in the performance improvement arsenal of a business – if the business commits to following and improving the results that the data provides. If the commitment is made, a foundation is set to shift ‘service delivery’ from the anecdotal realm to the realm of accountable, data-driven performance improvement.

What do I mean by anecdotal? Without an externally-imposed need to improve, managers have a natural tendency to search for ‘good news’ such as customer congratulatory letters, thank you notes, etc as proof of a job well done, while dismissing non-praise feedback as aberrations (see Confirmation Bias and GroupThink).

With an accountable, data-driven performance improvement system, dismissing the data just isn’t allowed.

Operations managers are made to understand the connection between service delivery- customer satisfaction- and other key business drivers such as revenue per customer, customer lifetime value (repeat business), and loyalty and defection-danger indices. Managers are given training on how to read the benchmark reports, isolate and remove root causes that adversely affect the delivery of these key drivers, and put accountable corrective action measures in place.

The cool thing about benchmarking is that systems exist – or can quickly be adapted – to provide innovative, non-obtrusive measurement of customer impressions. Data delivery can generally be configured to run from real-time to a month-long cycle to make improvement against key business drivers an urgent and quantifiable process.

Large businesses have benchmarking and surveying nailed…but it doesn’t have to be a tool just for big business. In fact, small to medium businesses can realize huge efficiencies in the areas of sales growth and expense reduction simply by adopting a disciplined benchmarking strategy.

Net:

Linking service to delivery to key business drivers such as sales, customer lifetime value, and so on is good business sense for small to medium businesses. Deploying creative measurement systems communicates to customers a sense of genuine care while developing the data necessary to bring about substantive improvement.