Don’t confuse customer value with customer satisfaction 

  

I’ve been watching the channel 4 documentary series British Army Girls which follows the lives and experiences of young women during their initial military training. 

There have been a few documentaries of this type and watching how people transform over the weeks is captivating. 

An incident in last nights episode got me thinking. The recruits were on a three day field training exercise towards the end of the first phase of becoming professional soldiers. The women were tired, cold, and fed up. They had been subject to mock attacks on their patrol and were being pushed to their limits by their officers.

Stop. 

At this point if we were market researchers and we wanted to know how good the service experience was we would do a satisfaction survey. Guess what the results would be pretty dire. Just listening to the girls in the documentary is enough to tell you ‘at that point’ they were very very unsatisfied. 

Start.

Now fast forward to the end of the exercise and imminent passing out parade. The girls expressed how amazing they felt at being challenged, how they had faced and overcome things they didn’t expect and how a great sense of professional pride and self esteem had been created. The recruits had clearly derived immense value from the experience. Value that would serve them well time and time again in the future. 

In modern management and particularly in the public sector it is fashionable to be obsessed with satisfaction metrics. Doing this is meant give commercial teeth to soft public service delivery. The problem with this approach is that it is underpinned by a simplistic assumption that we are all customers and displays an impoverished understanding of the latest marketing thinking. This satisfaction metric approach is at least twenty years out of date.

The argument runs that because services are ‘paid for’ via taxes, student loans etc we are thus ‘customers’. Satisfied customers come back and tell others how good the service is and so their satisfaction matters. 

This whole customer centricity argument has been a main plank of marketing management thinking for decades. Hence a fixation on customer satisfaction. 

Current academic marketing research on real world commercial businesses challenges this view. Measuring satisfaction does not give you a fix on the value created. Evert Gummesson suggests that customer centricity is a wild goose chase that ignores the real complexities of value creation and delivery for all stakeholders involved and that includes the service provider as well as the customer.

In our forthcoming book provisionally titled Unlocking Customer Value (Simon Kelly, Paul Johnston and Stacey Danheiser) to be published by Palgrave Macmillan we explain that there is a crucial difference between quality, satisfaction and value

Academic Robert Woodruff says that a problem with value is that it is often used with other hard to define terms like utility, worth quality, satisfaction and benefits. 

Let me share a couple of everyday business examples to illustrate the distinction between the two concepts. I worked for two decades in the gambling industry. In the long run most players lose. So if you ask satisfaction questions then most players are disatsified. Probe on value and you get a different perspective. Players will talk about the value they get from trying to beat the slots, the social value of passing the time and the buzz and excitement of playing etc. 

Budget airlines often get complaints from disatsified customers annoyed at pay as you use services. However the value of cheap tickets and efficient boarding and disembarkation often trumps the dissatisfaction. 

For sure customer satisfaction is one very common and in the right place a worthwhile measure of marketing effectiveness. The problem with satisfaction measurement is that it can only be measured after the customer has used or experienced the product or service at a specific point in time. This might be ok for a product. It worked well or it didn’t. Service value on the other hand works through time and can be derived way after its initial delivery. Measuring the satisfaction you get from something is always immediately after the event. Measuring satisfaction is not measuring value. Ultimately it is value we pay for. As Warren Buffet said:

“Price is what you pay. Value is what you get”

Value is different and can be judged before, during and after the experience. It is the worth of something regardless of how satisfying the experience seemed at the time. 

Value also emerges out of the difference between expectation and experience. Professor Sam Ham in his book Interpretation: Making a difference on purpose. Explains that setting out clear expectations affects our sense of value. 

The army girls were told continually to expect challenge and hardship, pain and fear – hardly things you would associate with satisfaction. The expectations were clear. Surpassing expectations delivered value.

Here’s one final example. The Century Egg. A highly valued Chinese delicacy. Highly valued and yet:

‘the yolk becomes a dark green to grey color, with a creamy consistency and strong flavor due to the hydrogen sulfide and ammonia present, while the white becomes a dark brown, translucent jelly with a salty flavor.’ 

How satisfying to eat must that be! 

So watch out. Don’t confuse satisfaction with value. 

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