Yesterday I was listening to a radio show about investing. Not that I’m a big buyer and seller of stocks and I certainly would never claim to be smart enough to teach anyone how to choose a stock to invest in. Trust me, I have my own investment problems and I certainly wouldn’t want anyone to follow what I do in that area.

What I found interesting about the program is that they were saying that smart investors are starting to measure a company’s growth potential (or the increase in value of their stock) by customer satisfaction. In other words, if a company has very satisfied customers, chances are the value of the stock of the company will rise. If the company does not have satisfied customers, the stock value will not increase.

Smart investors are so serious about this that they want customer satisfaction statistics added to companies SEC reports and financial statements. They want this rating to be readily available for them to evaluate when making stock purchase decisions.

This isn’t really rocket science is it. We as small business owners already know that if our customers are not satisfied, we’re not going to be in business very long. But, how do we determine how satisfied our customers are? Of course, we could (and should) ask them but are they telling us what they really feel?

Face to face people tend to give us the easy answer, the one we want to hear so they don’t have to answer any more questions. Sure, there’s always going to be the guy that complains about everything but he’s not a good measure. After all, he complains about everything.

Written questionnaires could be used but how many responses do you really get with written questionnaires. You might be able to get more responses if there were some sort of incentive like the potential for winning something.

A short survey on your website would be good. Again, if there were some sort of incentive, there would be a higher level of participation. People like to win stuff.

The best way to determine customer satisfaction, however, is by developing relationships with your customers. Customers that feel appreciated and cared about are the most satisfied customers and they are the ones that are going to spread the word about you and your business. I know, I’ve said before but it’s true.

This really needs to be taken a step further though. How satisfied are your customers going to be if your employees are not happy? Your employee’s feelings are going to be projected to your customers – happy or unhappy. Maybe developing a good relationship with your staff is what needs to happen first.

How satisfied are your customers and your employees?

Photo credit: bfishadow

This post is a bit off topic for me but I hope you’ll bear with me. Recently, I received an email that has had me thinking ever since. The email was about The 90/10 Principle by Steven Covey. Hopefully it will get you thinking too.

What is this principle?

10% of life is made up of what happens to you. 90% of life is determined by how you react.

What does this mean?

We really have no control over 10% of what happens to us. You cannot control a red light but you can control your reaction. Do not let people fool you. You can control how you react.

Following is the author’s example:

You are having breakfast with your family. Your daughter knocks over a cup of coffee onto your business shirt. You have no control over what just happened. What happens next will be determined by how you react.

You curse. You harshly scold your daughter for knocking the cup over. She breaks down in tears. After scolding her, you turn to your wife and you criticize her for placing the cup to close to the edge of the table. A short battle follows.

You storm upstairs and change your shirt. Back downstairs, you find your daughter has been too busy crying to finish her breakfast and get ready for school. She misses the bus.

Your wife must leave immediately for work. You rush to the car to drive your daughter to school. Because you are late, you drive 40 in a 30 mph speed limit zone. After a 15 minute delay and throwing a $60 traffic fine away, you arrive at school. Your daughter runs into the building without saying goodbye.

You arrive at the office 20 minutes late. You realize you forgot your briefcase. Your day has started terrible. As it continues, it seems to get worse and worse. You look forward to getting home.

When you arrive home, you find a small wedge in your relationship with your wife and daughter. Why? Because of how you reacted in the morning.

Why did you have a bad day?

1. Did the coffee cause it?
2. Did your daughter cause it?
3. Did the policeman cause it?
4. Did you cause it?

The answer is “4”. You have no control over what happened with the coffee. How you reacted in those 5 seconds is what caused your bad day.

Here is what could have happened. Coffee splashes over you. Your daughter is about to cry. You gently say “it’s ok honey, you just need to be more careful next time. Grabbing a towel, you go upstairs to change your shirt. You grab your briefcase and go back down in time to look through the window to see your daughter getting on the bus. She turns and waves. You arrive at the office 5 minutes early and cheerfully greet the staff.

Notice the difference? Two different scenarios. Both started the same. Both ended very differently.

Why? Because of how you reacted. You really have no control over 10% of what happens in life. The other 90% was determined by your reaction.

Having had a boss that was very much like this, I can really relate. He would have a bad morning at home and would bring that bad mood to work. It actually got to the point of being funny but everyone knew to stay away from him the rest of the day.

That’s no way to run a business, is it. Trying to apply the 90/10 principle when we react to situations in our businesses may have an incredible affect on the success of our businesses.

What are your thoughts?

Photo credit: Ben Ootjers