Are your company’s revenues stagnant or flat? Are customers defecting to your competitors? Are your margins getting squeezed?

Although these symptoms can sometimes be conveniently blamed on a slowing economy or low-priced competition, they might also be the result of poor customer satisfaction. If these signs are manifesting themselves at your business, maybe you should take a closer look at your system of measurements.

Here are a few tough questions to ask yourself that might help improve customer satisfaction ratings. If you can answer “yes” to all three questions, your business probably has the measurement infrastructure to keep customers satisfied.

Question #1: Are there measurements?

First, you must determine if there are measurements in place. Sometimes you may not know that there is a customer satisfaction “issue” because there is no formal tracking in place. Anecdotal and subjective indications may be acted upon to solve an immediate problem with a specific client. As a result, you become reactive, solving problems only as they arise rather than identifying problem trends or realizing that other customers are experiencing similar dissatisfaction. Developing a measurement system will go a long way toward getting a more accurate look at your customers’ perspectives on the products and services they buy from you.

Question #2: Are they the right measurements?

Not all metrics are created equal. Choosing those on which to spend time and money is the most difficult decision in this process. You must balance financial, non-financial, leading, and lagging performance indicators (i.e. percentage of on-time deliveries, pieces produced per hour, revenue per employee, etc.), which are directly related to your company’s strategies. A metric must also be easy to understand, calculate, and explain to employees. Usually, no more than 25 metrics will be used to monitor company performance.

Determining specific measurements can be difficult. In the case of a company’s customer satisfaction strategy, an internal discussion of what your customers value is a good starting point, but it may not be enough. Surveying current customers to gain a better understanding of their perspectives is imperative. Including former customers that have left for your competitors may be even more valuable and could hold the key to developing the proper measurements. And some customers may have different needs and consequently could require different measurements.

Question #3: Are they being used and revised regularly?

Once you have the right measures in place, make sure they’re being acted upon. Without proper implementation, employees may resist the new system as they may be afraid of failing or fear that the system will highlight poor performance. But given sufficient time, training, and other resources, your employees will recognize the power of this management tool and will develop a sense of ownership and teamwork helping your company achieve its full potential.

Typically, an individual will head up a team to discover the root causes of a low score in each particular measurement category. Identifying a problem is the first step to its resolution. Implementing corrective actions will rectify the shortcomings. Understanding that this is a continual process will help keep the proper measurements in place.

We all know that unsatisfied customers will look elsewhere for their products and services. Having objective measurements in place to determine the relative satisfaction of customers will go a long way toward maintaining a healthy business.