True "customer satisfaction" is an organization's ability to attract & retain customers and enhance the customer relationship over time. It is not simple and the answer cannot be collapsed into a single "customer satisfaction index." Every interaction a customer has with a company’s products & services is a reflection on quality.

Customer satisfaction measurement (CSM) is a management information system that continuously captures the voice of the customer through the assessment of performance from the customer's point of view. This information provides a platform for the strategic alignment of organizational resources to deliver whatever is most important to customers.

Perceptions of non-customers
Tracking "market satisfaction" requires input from non-customers as well as customers.

Performance relative to competitors
Customers judge your product/service offering relative to offerings of your key competitors. If your performance is improving, but your competitors are improving faster, your relative perceived quality would actually decline.

In contrast, market-perceived quality versus competitors involves a dramatic shift in focus — from satisfying your current customers to beating competitors through customer value management. Firms that succeed in holding onto their customer relationships:

Seek out features that are both unique and worth a lot to customers

Differentiate their product/service offerings to meet differing segment needs better than their competitors

Actively communicate these benefits, building a conviction by the customer that they are better off continuing their relationship

 
True customer value management entails integration of total quality management with the company’s classic management systems (strategic planning, budgeting & control, capital investment, competitive analysis, performance measures & reward) to ensure that companies enter and invest only in businesses where they can be quality & value leaders.

The payoff from customer satisfaction measurement comes from its ability to define & direct a company’s quality improvement efforts, and its quality/value position in the marketplace. Customer satisfaction measurement and quality impact profits by:

Reducing costs

Preventing erosion in revenues over time

Increasing market share

Increasing gross margins

 

SMART conducts customer satisfaction measurement research that enables firms to determine whether they have "value-driven" relationships with their customers. A business’ customer value position, relative to competitors, has a dramatic impact on its market-share gain and profitability.