The following column, which appears each issue, looks at new and emerging trends in direct marketing. Alternating columnists are Barbara Canning Brown, a leading figure in the Canadian direct marketing industry, and David Foley, a specialist in database marketing programs.

The other day, I heard a radio commercial that offered listeners the assurance the advertiser would not be satisfied ‘until you are.’

So what?

Some businesspeople deceive themselves into believing that a ‘satisfied’ customer is a loyal customer, which is not necessarily the case.

To claim ‘a high degree of customer satisfaction’ is to put forth a statistic of dubious value, since the feeling of satisfaction is tied to individual customer expectations, which vary substantially.

Low expectations might produce high levels of satisfaction (which is likely neither meaningful nor useful), while high expectations tend towards lower satisfaction levels (which can be very meaningful.)

Looking for the path of least resistance, a tendency exists to label certain customers as hard to please (or difficult), which usually means that their expectations are higher than average.

At this level, customer satisfaction rates may be relevant (although there is a much more important measure – which is revealed later in this column.)

Peter Zarry, director of the division of executive development at York University in Toronto and a leading authority on customer satisfaction, says ‘satisfied customers should be a competitor’s first target simply because, so often, they are easy to convert. People frequently mistake satisfaction for habit.’

A personal example: I routinely take my car into the local dealer for service. They are convenient, they have the right parts, and, presumably, mechanics with the right training.

They offer a shuttle service to the nearby go station. Does my repeat patronage mean that I am satisfied with their service? Not necessarily. A fair description would be to say that I am not unsatisfied.

However, through the dealership’s rose-colored glasses, it’s a different story. They believe that I must be satisfied since I have never called to complain.

As evidence, the dealership would offer up the fact that, after each service call, they leave me a message that includes the following text:

‘I’m doing a service follow-up on your [car model] that you had in recently. We would like to confirm that it has been serviced to your satisfaction. If everything is okay, do not return this call. If there are any problems with the work that was completed, please contact our service manager, Bill ÑÑÑ at 000-0000 – that is, only if there is a problem.’

Only by engaging in dialogue can the dealership (or any other business, for that matter) get an accurate reading on the real level of ‘customer satisfaction.’

This dialogue should include the following question: have you referred our product (or service) to a friend?

Referral is the objective measure of satisfaction. By tracking the trend in its referral rate, any business can visually communicate how it is really doing to its employees and customers.

In most cases, the answer to this question will be ‘no,’ which triggers this follow-up question: would you refer our product (or service) to a friend?

A second ‘no’ leads to this question: what would we need to do for you to feel comfortable about referring our product (or service) to a friend? And so the dialogue begins.

(Of course, your marketing database should include fields that define referred customers and referral sources.)

Additional profit is a by-product of this focus on ‘referrals.’

By asking what requirements must be met for that individual customer to even consider a referral, that customer’s real expectations are on the table. Meeting or exceeding them will almost always produce a customer with a reason to be loyal and with a reason to bring you new customers.

I will not be satisfied until you have recommended to a colleague that he/she reads this column before they read anything else in Strategy. Even the job ads.

**********

Two worthwhile events: Michael Brown, head of California-based Redwood Training Associates, heads to Toronto for a two-day seminar on May 1-2 called Business to Business by Phone to be held at York University’s new downtown Toronto campus in the TD Centre.

A Canadian debut, this intensive program sets forth the strategic and economic case for marketing and selling by phone, and then shows you how to plan and implement your phone-based strategy. Fee is $895. For brochure, call 1-800-667-9380.

The Canadian Direct Marketing Association’s Annual Convention & Trade Show sets sail May 16 in Vancouver. Featured speakers during the three-day event include Don Libey, Stan Rapp and Emily Soell. Fee is $1,075. For a registration package, contact Brenda Stewart at the Canadian Direct Marketing Association at 1-800-267-8805, ext. 224.

David Foley is a marketing consultant and an instructor in database marketing at York University in Toronto. He may be reached at (905) 940-8784; fax (905) 940-4785.