Quantifying Customer Satisfaction
Taking to heart academic research that inextricably linked a company’s future success to current levels of customer satisfaction, Cisco applied a five-point scale that measured customer satisfaction to all customer-facing operations across the company. Employee compensation was directly linked to the resulting overall scores. Annual bonuses were based on the level of customer satisfaction revealed in answers to one question: “What is your overall satisfaction with Cisco?” Each year a specific goal was set, and the size of the bonus for all employees was dependent on meeting it. Each individual’s bonus was computed using the customer satisfaction multiplier along with a corporate revenue multiplier and salary multiplier. Allred specified the logic of the metric: “Managers find it inconceivable to risk losing customer intimacy in order to increase operational effectiveness, because you get paid on the basis of customer intimacy. So suddenly you have to think out of the box.”
Cisco administered the corporate Customer Satisfaction Survey on pre- and post-sales to customers who bought both directly from Cisco and indirectly through resellers. The survey included business-focused questions, such as overall satisfaction with Cisco, and product-specific questions. Questions came from all corners of the company. Engineering, for example, used customer responses to its questions to drive specific product improvements. Cisco also could link survey responses to any of its 60,000 channel partners, enabling it to attribute individual customer responses to a specific partner.