Providers who have avoided over-representing delivery capabilities to buyers over the last couple of years, often at the risk of losing short-term business, have arguably enhanced their long-term relationships with these same companies. Such forthright and farsighted behaviour tends to cause buyers to remain more loyal, and increased customer loyalty is the principal point of striving for higher levels of customer satisfaction in the first place.
Getting it right
Now more than ever, there's a need for standardized, objective and independent ratings and market-based information regarding the oil and gas industry's satisfaction with the suppliers upon which it depends so heavily. Knowing what is important to customers is key to suppliers optimizing long-term decision-making and resource allocation. Certain oilfield service providers manage to garner outstanding marks, in part by maintaining a long-term focus on customer relationships. An example is Houston-based Derrick Equipment which has risen from 14th place in the 2005 survey to top the latest customer satisfaction list. High levels of customer satisfaction do not materialize out of thin air, they require a full-time commitment and a willingness to invest in the resources and processes that ensure customers consistently have positive experiences. The ability of the top-rated suppliers to register these high scores in EnergyPoint's surveys, particularly as bottlenecks and performance issues have recently hampered the entire industry, says a lot about their determination to meet the needs of customers regardless of industry conditions. Ultimately, the decision of whether or not to focus on customer satisfaction as a priority should be an easy one for suppliers. Not only do inferior levels of customer satisfaction limit a supplier's options by shrinking the pool of potential companies for whom it can work, they also serve as open invitations to competitors to enter their markets and attempt to pry away potentially disillusioned customers. Analysis of EnergyPoint's survey results shows the ability of a supplier to score highly in terms of customer satisfaction often depends on the perceived competence and commitment of its people. Providers with cultures that stress the need for customers to have positive overall experiences, and that are willing to invest in the training, facilities and systems needed to ensure this occurs, can enjoy real competitive advantages. Chief among these advantages is stronger financial returns. The University of Michigan's Ross School of
28 MTR
Business recently examined 10 years of data from the American Customer Satisfaction Index (ASCI) and found that stock portfolios based on customer satisfaction delivered excess returns in both up and down markets across a range of industries. EnergyPoint's own data suggests a similar correlation in the oil and gas industry. In fact, in the 24 months following completion of our surveys, stock returns for upstream suppliers with above-average ratings outperformed those with below-average ratings by a remarkable 37.2 percentage points. Clearly, ties between customer satisfaction and investor returns can carry relevance for a number of stakeholders.
November/December 2008
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