Many companies have systems in place to measure product satisfaction (the more popular term is customer satisfaction) and use the information to aid decision making. Alternatively, very few companies have systems in place to measure product. I share the belief with others that satisfaction and value metrics are different, they tell different kinds of stories and that together they provide the complete story. In this post I'd like to explain the following:
- The difference between satisfaction and value metrics.
- Show that both satisfaction and value metrics are necessary for decision making.
Customer Satisfaction and Value Defined
Customer Satisfaction is a customer's perception of how well a product (good or service) performs in specific situations or in general relative to their expectations.
Product Value is a metric that is a property of a product (good or service), similar to product cost in that it is measured in $, but measures the worth of a product (customer's willingness-to-pay) for a specific market and is independent of use situations.
Below is a table that compares satisfaction and value in more detail.
Customer Satisfaction and Value in Decision Making
Both measures are needed to get a complete picture of how the business is doing and neither alone is a substitute for the other. Below is a table that shows how the metrics aid different types of decisions.