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Everything is illuminated?

Dashboard data based on past performance is good for assessing customer satisfaction so far but trying to predict future trends is far more difficult and requires new tools
Vincent Golding
Vincent Golding: Predictive analytics are the way to go. Photograph: Anna Gordon

With the prospect of a public sector squeeze, the emphasis on 'evidence-based management' is stronger than ever.

Difficult decisions become a lot easier to make with information that sheds light on the path ahead. But such illumination is not so easy when we are constantly bombarded by data. The common solution is to set key performance indicators that act as a 'dashboard' for the state of an organisation at any given time. But does reporting on past performance provide the necessary illumination of the future in a period of rapid change, and if it does not, then where do we look?

Of course we can rely on the wisdom of those who have lived through tough times in the past, but in this age of science, perhaps there are new forms of evidence to further improve our decisions?

Take customer satisfaction, for example, which was discussed at a recent GuardianPublic roundtable. Satisfaction is widely used to demonstrate that an organisation is delivering well to its customers. In many organisations, customer satisfaction could only get higher; every year better than the last. Everyone gets a pat-on-the-back (perhaps even a bonus) and the results are published in self-congratulatory headlines: 80% of customers are satisfied - hurrah!

But such measures were designed by the market research industry to meet the needs of PR and marketing. Meanwhile, accountants and finance officers pay scant interest to customer satisfaction because the results have shown no relationship to their financial metrics.

With the great challenge of the current cost-cutting environment it will be harder to justify investment to drive customer satisfaction scores higher.

Transparent about real issues

This is an opportunity to use customer satisfaction in quite a different way. By focusing on 'dissatisfaction' and ways to reduce this, managers can demonstrate that they are being transparent about real issues and re-gain some faith in the metrics that everyone can understand.

With the rise of predictive analytics, which link operational and financial performance, many leading organisation are using customer satisfaction measures to successfully re-engineer their delivery, while containing any damage to customer sentiment.

For example, customer satisfaction measures can help to inform outsourcing decisions around value for money from suppliers.

It may be that the organisation can accept a 5% decline in customer satisfaction in the short-term (while migrating to a new supplier), and can then implement new operational processes that help to drive satisfaction up again.

This is using satisfaction metrics in a smart way, as just one element in calculating return-on-investment. Critically, it enables organisations to manage through a period of change in a sensible way.

It's about limiting the damage, and being able to prioritise investments, to ensure that there is no long-term customer dissatisfaction.

For today's decisions, managers need a tool that helps them to determine the negative as well as the positive impact of change. This demands a sense of realism. Those that succeed will be the ones who have a plan that takes into account the impact of cost-cutting on customer sentiment and manages through this period of change. Those that fail will have either stuck to the old PR exercise, or will have thrown the proverbial baby out with the bath water!

Vincent Golding is account director at customer satisfaction specialist Kadence International

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