How Not to Hire Customer Service People: Part 1 – The Myth of Customer Satisfaction

After almost two decades of studying salespeople, I know what employers must look for in candidates for sales jobs. But the science is incredibly murky when it comes to predicting who will do well and who will do poorly in customer service. The reason? Few if any objective measurements of success.

In sales, it’s all about the numbers; gross sales, close ratios, contacts, etc. It’s a little less cut and dried in customer service, but the objective metric most businesses use to evaluate service effectiveness is customer retention. The fact that it usually costs up to five times more to attract a new customer than to keep a current buyer ¹ motivates businesses to take customer service seriously. But retention is a result of what service people do. Retention statistics don’t inform the hiring decision. What kind of people will help retain business? This is where the alchemy begins.

The single greatest myth of customer service is “satisfied customers don’t take their business elsewhere.” So, customer service departments invest heavily in creating and conducting customer satisfaction surveys. Businesses ask their customers what they like and don’t like and use the feedback to guide the selection of service people.

But research has shown that 65-85% of customers will report being completely satisfied just days before taking their business elsewhere.² Empirical studies in this topic show no connection between customer satisfaction and retention.³

I take my car to be serviced at a dealer. Several days later I get a telephone call from the customer service people wanting me to evaluate the service I received.

Were your expectations met?

It was only an oil change, for goodness sake. What expectations does someone have about getting their oil changed? Just remember to put the new oil in after you drain the old oil out and give the filter a nice tight turn, thank you very much.

Where you greeted in a friendly manner?

I don’t remember. I wasn’t welcomed with a flood of insults or I would have remembered that. So I respond, Yea, everything was just great. I do not intend this remark to be anything more than a cue that I just want to finish this conversation so I can get back to what I was doing. But my responses go into the company computer as a satisfied customer and friendly greeting is reinforced as a competency of effective service.

But the next time I needed my oil changed, I went to one of the local quick lube places. My customer satisfaction was completely unrelated to the retention of my auto service business.

Why are customer satisfaction surveys so unreliable?

1. Only a very small percentage of people complete customer satisfaction surveys. One company receives on average 15 completed surveys per 1000 client interactions. That’s about one and a half percent response rate. Statistically, this is not a representative sampling of opinion.

2. Customer satisfaction surveys tend to measure only the extreme opinions of those either irritated with poor service or impressed by an extraordinary service interaction. Ninety eight percent of the service actually provided isn’t measured.

3. Research by Dudley, Goodson and I shows that not everyone uses rating scales in the same way.⁴ While most people start at a 10 and grade down for infractions, individuals with Oppositional behavior tend to start at zero and only reluctantly add points for exceeding their expectations.

4. Only a small percentage of people will even respond, usually analytical and empathetic individuals. People who need to be in control (called Commanders in Barnett’s Behavioral Model) ignore requests for evaluation. Highly social extroverts (called Performers in the Behavioral Model) are usually so focused on themselves they don’t remember the interaction. Empathetic customers who are conflict-avoidant and want to please others will only give the highest grades and are the most forgiving. That leaves Analyzers as the folks who complete surveys with any regularity. However, because Analyzers are more task-oriented than relational, they are less likely to evaluate the quality of the interaction as they are the conscientiousness and competence of the service provider. The result is a customer satisfaction index driven primarily by non-social evaluations.

Customer satisfaction surveys are not reliable predictors of business retention and are probably equally bogus as the basis for understanding customer service competencies.

¹Dr. John T. Self, (1997) Improving Customer Service.

² Reichheld, F., and Kenny, D. (1990). The Hidden Advantages of Customer Retention. Journal of Retail Banking, XII(4), 19-23.)

³ Thorsten Hennig-Thurau and Alexander Klee, The impact of customer satisfaction and relationship quality on customer retention: A critical reassessment and model development, 1997.

⁴Earning What You’re Worth? The Psychology of Sales Call Reluctance, BSRP, 1995.