Is Customer Satisfaction a First Step in Customer Relationship Management?

What is customer satisfaction? Can it be termed as “first-step” in customer relationship management?

In order to define and work towards creating greater “satisfaction”, we need to first understand “Who is the customer”, and “What influences satisfaction”.

It should not be very hard, as all of us, at some point in time, do act as customers. So, what are things that are satisfying, annoying, or indifferent should provide you enough clues to answer the above question, i.e. what influences satisfaction.

I personally segregate these influencers in two categories, “Internal”, and “External”. The internal sets of influencers are the tasks / processes under our control, and can provide the performance on count of “customer satisfaction”. The external set, as the name suggests, is in control of customer, and we get to see level of satisfaction by analyzing their feedback.

Therefore, a satisfaction to me can be gauged through;

Internal Indicators

a) The quality and process / project metrics
b) The management / SQA review points
c) Internal audit findings
d) The review records
e) The internal cost / financial metrics
f) Internal employee satisfaction survey
g) Number of escalations and severity

External Indicators

Though one can have subjective as well as objective questionnaire to capture the response of the customer, however, a mix of both would be the right choice, as it would provide customer an opportunity to "rank" as well as means to convey his / her feelings / observation, which would require further analysis on vendor's part. I believe following aspects should provide a suitable base for capturing the satisfaction level;

a) Product / Service Quality – Overall / Phase wise
b) Schedule Adherence (variance / span)
c) Cost Vs. Value Proposition
d) Responsiveness / Empathy
e) Accuracy of provided solution / responses
f) Resources ability / capability


g) If you were to re-execute the project, then what were the things that you would like to do differently, and how? OR
h) What are the points / factors / actions that you think could have provided much more value add to this initiative?
i) What are our two most positive and negative points, and how we could have addressed those (negative points)?
j) If some referral calls you up, what be your spontaneous feedback on us?
k) Where and how do we need to improve upon?
l) Would you like to do a repeat business with us?


These are obvious influencers, and interestingly most of those are within control of ours (as vendors). However, still customer satisfaction had been proving bane for many. Why is it so?

I personally felt that it is because of our attitude towards customers. That is, though we want them to consider us as their business partners; however, fail to reciprocate the same understanding for them. At that time we give importance to “profit margins”, and “appraisals” over “relationship” that we want to create and manage.

This dichotomy is the bane of all customer dissatisfaction, and to some extent customer relationship related problems.

Now, again have a look at the list of external indicators, you would appreciate that except for point #c, i.e. perception on cost Vs value, all others can easily be monitored and corrected internally. Interestingly, that would again be in our interests to do so; not because, it is required to improve the customer relations (though ultimately it would), but more so for our internal performance. Let’s see, how?

It is evident that if I take care of internal factors, either I improve upon cycle time, reduce costs, or increase productivity. In either case it benefits me first and then the customer. The reason being, whether I reduce the COQ, improve the performance against “First Time Right”, improve the productivity, match the schedule and effort commitments, save on escalations and resources spent on addressing those; it is me (as a vendor), who gets the benefit, and the customer satisfaction is add-on benefit. The best part, I do not have to do anything extra or specifically for the customer to increase the customer satisfaction level.

Therefore, I would go to an extent stating that first look at the internal indicators and perform on those indicators, the chances are you would have already satisfied your customer. The external indicators are more so to build a relationship, wherein, you want to contribute to the success of the customer through wider business association, and through better understanding of their other needs.

I personally believe “Customer Satisfaction” is the first step for building a customer relationship. The reason being, it would be fool-hardy to think of building a relationship with annoyed customer. How many times you have done so (building a relationship with vendors providing unsatisfactory service)?

Yes, customer relationship management is more than just customer satisfaction. It may involve, customer feedback, profiling, empathy, marketing, issue / request management, personalized service development, promotions, communication, access to information, visibility to progress made etc.; however, all of that comes after customer satisfaction. These extra parameters help you in uncovering hidden needs / reasons, to either broaden your business association or better align your services with customer needs. But, at the end of the day, those are refinements for a satisfied customer.

For example, by gathering information on additional parameters and acting in accordance with the outcome may help you broadening your business association from a single service to multiple services; however, it cannot be a substitute for getting the basics right, i.e. perform on internal indicators.

A relationship is built through demonstrable actions, and trust; which one cannot build on a foundation of unsatisfied experience.

Note: I have written this article in context of s/w industry alone.