February 2003

Dr. Jon Anton (also known as 'Dr. Jon') is the Director of Benchmark Research at Purdue University Center for Customer-Driven Quality. Have a question? E-mail him at [email protected].

Q: I'm looking for the following data: percent of revenue increase based on each percent improvement in customer satisfaction rating. Example: If we improve our call center rating from 83 percent to 90 percent overall satisfaction, is there a dollar amount that can be attributed to each percent improvement?
- Jim Proietti

A: Jim, you are definitely asking the right question. Improving customer satisfaction does lead to increased revenue. We recently performed a study that looked at the relationship between an individual's customer service experience and the likelihood of a repurchase. The repurchase probability from a customer who purchased a product with almost no problems was 76 percent. It declines to 32 percent if they have problems and are not satisfied with the service they receive from the supplier. The interesting thing is that the repurchase probability jumps to 89 percent when they have a problem that is resolved when they contact the supplier. The gap between satisfying your customer and not satisfying your customer is 57 percent. This is significant. The actual dollar value will be different for every company, every product, every service. To help you quantify the potential, you might find a methodology we developed at Purdue University to calculate the impact good customer service has on customer lifetime value (CLV) helpful. You can download a sample calculator from the White Paper section or our Resources page at www.benchmarkportal.com.

As you can see in the graph, the overwhelming majority of participants (49 percent plus 43 percent) felt their call experience was important in shaping their image of a company.

We feel this is a critical finding. It proves that since call centers are often the most frequent point of personal contact with a company, they are responsible for a major part of the branding and image of that company. We feel that top executives already have a 'gut feel' that this is the case, and with this finding will be more willing to do whatever it takes to make the call center a strategic differentiator for the company.

The Purdue benchmark research has been conducted since 1995. Purdue currently holds data for more than 5,400 call centers. To learn about how to participate in some of Purdue University's new benchmark research, please visit www.BenchmarkPortal.com.