Employing 2,000 people and located in Yokahama, Miyago Co., Ltd., is one of Japan’s largest building service contractors, providing custodial services to many premier public, office and retail spaces.

After 25 years as a successful businessman, Kazuhiro Matoba, the chairman of Miyago, decided to ask his customers how well they thought he was doing. With the guidance of a research firm, he organized a customer-satisfaction survey. The results surprised him, his reaction startled his customers, and the result was a 35 percent increase in revenue.

Miyago employed the firm to study 180 large customers, including bus terminals, grocery chains, retail outlets and office buildings. The firm divided responses into five basic groupings: Totally satisfied (TS), somewhat satisfied (SS), somewhat dissatisfied (SD), totally dissatisfied (TD), as well as no opinion.

Typically, when customers answer questions with a TS response, their relationship with the company is clear — there is, effectively, little or no room for improvement. An SS answer, however, indicates that something is not quite right with the relationship and improvements are required, whereas an SD customer needs even more improvement. A TD response indicates that the customer is about to make, or has already made, another vendor choice.

The first survey showed only 11 percent of Miyago’s customers were totally satisfied overall. Studies also demonstrated that TS Miyago clients are twice as likely to repurchase as customers who say they are only somewhat satisfied. Likewise, that same TS customer is 3.5 times more likely to recommend Miyago to a business associate than is one of their SS customers.

From “what” to “why”
Once the Miyago team realized that these customer groups had distinct purchasing habits, they needed to identify what attributes drive satisfaction and the level of impact each attribute has upon increasing or decreasing overall satisfaction.

To do this, the research firm employed a technology called neural network analysis. Neural networks are a type of system that simulates many of the abilities of the human brain; in this case, the network was able to identify, prioritize and quantify the relative impact that altering various attributes, such as sales, service or pricing, will have on overall satisfaction. This brought the survey from “what” customers think to “why.”

Early on, the neural network identified three attributes that had considerable impact upon the satisfaction levels of Miyago’s customers — commitment from Miyago management had the most significant impact, followed by quality of services and ease of doing business.

When Matoba saw that his customers did not feel that Miyago’s management was committed to their success, he took immediate action. He spent the next three months visiting each of the 180 customers to discuss the results of the survey and to personally commit his team’s dedication to Miyago’s customers.

One year later, after Matoba’s tour, the TS group increased to 48 percent and revenue increased by 9 percent. Relentlessly, Matoba persisted with his customer visits. The survey results the next year showed substantial increases. The “Totally Satisfied” segment rose to 67 percent and revenue increased by an additional 18 percent; four years after the surveys began, the total-satisfaction segment has reached 78 percent, with revenue increases of 35 percent.

“Our main management strategy is not about revenue itself,” Matoba says. “Our most important policy is to improve our customers’ satisfaction. We need to measure and benchmark their satisfaction and then improve it.”

Steve Lewis is co-founder of Development II Inc., a Woodbury, Conn.-based market research firm specializing in customer satisfaction surveys and relationship programs. He may be reached at (203) 263-0580 ext. 104.




POSTED ON: 9/1/2003