Tuesday, January 19, 2016

The mis-use of percentages

Very recently, a manager of a client of mine presented his goals and objectives for 2016. One of them included a customer satisfaction rating to reach 80%. The current figure is around 74%, which is well above the industry average of 60%.On the surface, this target looks appropriate. But, if you dig a little, and look at what the percentage actually means, maybe it isn’t such a good target after all.
Gary Ryan
When you have 80% of people saying they are satisfied, that means that 20% aren’t satisfied. And this is where the use of percentages can be misleading.

Twenty percent of five is one. If one person isn’t happy, while not perfect, it might not be a big deal. But 1,200 dissatisfied people is a big deal.

The manager above leads an area of the business that has just over 6,000 members, plus another 4,000 plus people who use the facilities. If we just focus on the membership figure, 20% of 6,000 is 1,200 people. That’s a lot of people who will be dis-satisfied with the organisation’s level of service!

It is fair to say that when I asked the manager, “Are you saying that it is okay for you to plan to have up to twelve hundred of your members dis-satisfied with your service?”, that both he and everyone else in the room responded with a resounding, “No!”.

By focussing on the improvement from 74% to 80%, what the real impact of what those figures represent had been lost. The improvement sounded good, but the reality of it was that the organisation was effectively planning to have upwards of 1,200 members walking around who were dis-satisfied with their current level of service. And 1,200 people is a lot of people to be unhappy.

Approximately one third of all dis-satisfied customers are dis-satisfied because of something they (the customer) didn’t understand correctly. When I share this figure with people, most of you nod in agreement that the number sounds accurate. The challenge for organisations is that you can’t put your finger into the breast-bone of your customer and say, “You silly fool, you misunderstood something and are blaming us for it!”. Clearly, you can’t do that if you want to keep your customers.

You have to find ways that enable your customers to recognise their errors in a manner that allows them to save ‘face’. No-one likes feeling like an idiot.

Let’s do some more sums. One third of 1,200 is 300. If we apply this figure to the above scenario, 300 is 5% of 6,000. Providing you have easy to use and open communication channels with your customers, these 300 hundred dis-satisfied customers can quickly be turned into satisfied customers by helping them to understand what they have mis-understood in a manner that allows them to save ‘face’. This would leave you with 15% of genuinely dis-satisfied customers and clearly you would need to use your open and easy-to-use communication channels to identify what was upsetting them so that you could work on closing the related gaps.

What percentage should the manager have presented?
Aah, good question!

My suggestion is this, “We are striving for 100% satisfaction. We understand that this is a destination that we may never reach. However, we continue to genuinely strive for it none-the-less. Last year our satisfaction rating was 74%, and 70% the year before that. Our current figures mean that 4,440 of our members were satisfied with our service and in a moment I’ll share the reasons they have told why they are happy with us. However, our results also mean that 1,560 members were not happy with our service. Clearly, both figures need to improve and we are trending in the right direction, but the sky must be the limit for our projected improvements for next year.”

I would then suggest that the manager would detail how the organisation is going to bring those improvements to life.
While the organisation may not achieve 100% satisfaction the following year, maybe they could reach 88%. I can assure you that if your target is 80%, you’ll most likely reach it, maybe even a little bit more, but not a lot more.

I encourage you to look at what your percentages really mean. Have the courage to challenge each other and not to passively accept the way that percentages are used to represent data. The real meaning of the data is too often hidden by impressive looking percentages and these can mask the real situation. Shoot for the stars – you never know, you just might reach them.

Gary Ryan helps talented professionals, their teams and organisations to move Beyond Being Good®.

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