BRAND TRANSPARENCY IS GOOD BUSINESS, BRAND AUTHENTICITY IS REAL BUSINESS. Authenticity is the brands behavior.…
A dubious ROI of customer satisfaction surveys
A good friend and client likes to joke during every project: “Remember Joe, correlation does not imply causation.” Well, I thought she was joking. Surely everybody with a job in marketing research knows this? Apparently not. Even professors at fancy business schools seem to forget it, as evidenced by this snippet of an article a few months back in one of our most prominent industry news outlets:
A 2017 study of 7,513 customers of a large North American automotive dealership examined the financial benefits of customer satisfaction surveys. Two findings stood out: First, customers who completed a satisfaction survey purchased more than those who did not, even after accounting for the satisfaction rating. On average, sales per visit were $12.18 greater among those who filled out the satisfaction survey. With an average of seven visits per customer, this amounts to roughly $85 per customer. Even if a relatively high average cost of $10 per customer is assumed for the survey, there is a 750% return on the survey investment.
Unless I have no idea what “return on investment” means, the business professor writing this paragraph believes that a correlation between filling out surveys and spending more means that filling out surveys causes higher spending. Most likely, this is a textbook example of the opposite.