Customer Satisfaction and the Role it Plays in Modern Business

What if you came to work one day only to find out that half your customer base left you for your competition?

If you’ve just felt shivers thinking about revenue drops, acquisition costs, and all this year’s KPIs going to hell… Then good. Because that’s what you’re risking when you ignore customer satisfaction.

Customer satisfaction should be considered a vital component of any modern business because it provides marketers and business owners with a metric that can be used to measure and improve business performance from a customer perspective.

Not only is it a leading indicator of consumer repurchase intentions and loyalty, but it is also a great way to understand if they will become long term repeat customers or even advocates. 

On the other hand, it can also provide the initial warning signs that a customer is unhappy and potentially at risk of leaving. With all this considered, customer satisfaction can provide businesses with crucial information to understand what aspects are successful and where improvements need to be made.

To say that customer satisfaction is important is an understatement. In 2022, it’s a necessity. Like oxygen for proper functionality of our brain cells, customer satisfaction is important to the proper development of modern businesses.

81% of marketers view customer satisfaction as the main competition area in their industry.

But the competitive edge is not all. In an article published by PwC, 59% of customers will leave a company after several bad experiences, and 17% after one bad customer experience. Yes, this also concerns your previously loyal customers. And yes, they won’t be back.

As such, it’s no surprise 45.9 percent of businesses surveyed in 2020 named customer experience as their number one priority.

All this brings us to one question, what exactly do we mean by ‘customer satisfaction’
Customer satisfaction is a measure of how people feel when interacting with your brand. It can be influenced by any number of factors, such as:

  • Perceived product quality
  • Perceived product value
  • Convenience
  • Customer expectations
  • Communication
  • Complaint/Ticket handling

Every brand big or small, no matter how successful, wants to improve customer satisfaction. To do that, they need to define two things:

  1. Who their Customers are
  2. What it takes to satisfy them

While the definition above looks pretty straightforward, in reality, it’s not that easy to define what “satisfied customers” really mean for your company.

If you’re tempted to say,  I’ve got a lot of purchases and a steady number of recurring customers, so I think I’m good,” think again. Maybe some of your clients simply forgot to cancel their subscriptions. Maybe they procrastinate switching to your competitors. Or perhaps they’re too shy to complain and seek reimbursement. None of these reasons means they’re satisfied.

This is why specific customer satisfaction Metrics like CSAT (Customer satisfaction Score) come in. Giving you the leverage to determine what exactly influences the satisfaction or lack of it among your customers. 

According to Sprout Social in an article about What consumers want from brands in a divided society, they illustrate why brands should prioritize their customer relationship.

More than three quarters of consumers (76%) say they would buy from a brand they feel connected to over a competitor, and 57% say they are more likely to increase how much they spend with a brand when they feel connected. On the other hand, when consumers don’t feel connected to a brand, 70% are less likely to shop there over a competitor and almost two thirds (61%) will spend less with that business.

But why should brands care?

Simply put, connection breeds loyalty, protecting businesses from boycotts when customers have a bad experience, or from losing customers to a competitor. Sixty-four percent of consumers say that their loyalty to a brand increases when they feel connected.

Benefits of Great Customer Service

  1. Increase Brand Loyalty
    Never take your customers for granted. According to PwC, 59% of U.S. consumers who love a product or brand would ditch it after several poor experiences. More concerningly, almost one in five would do so after a single bad experience.
  2. Boost Trust
    According to Edelman, 81% of consumers say brand trust is a deal-breaker or a deciding factor in their purchase decisions. Yet trust is pretty thin on the ground, with just 34% of consumers saying they trust most of the brands they use or buy from.
  3. Attract Positive Word of Mouth
    Word-of-mouth marketing is extremely valuable. To give just one example, 87%of consumers read online reviews for local businesses in 2020, up from 81% in 2019. Unfortunately, consumers are significantly more likely to share negative reviews than they are positive ones. According to American Express, U.S. consumers tell an average of 15 people about bad experiences, whereas they only share good experiences with 11 people.

    In other words, it’s a numbers game. You know consumers are naturally less inclined to shout about the good stuff you do, but if your customer satisfaction is high, you’re well placed to reap the benefits of word-of-mouth marketing.

  4. Grow Your Audience and Sales
    We already know satisfied customers are more likely to tell their friends and family about your brand, which in turn gets you in front of a wider audience. However, did you know those satisfied customers will also spend more?
    According to the same American Express survey referenced above, U.S. consumers are prepared to spend 17% more if a brand delivers excellent Service.

Important Metrics You can implement to help you take charge of your customer Satisfaction Today

  1. CSAT (customer satisfaction score)
    To track customer satisfaction, you need to set up a CSAT (Customer Satisfaction Score) survey that asks the clients to rate their experiences with your company, usually on a 1-to-5 scale. You can measure your client’s general satisfaction with your services or monitor specific touchpoints—like making a purchase, contacting customer support, using a particular product feature, etc.
  2. NPS (Net Promoter Score)
    Net Promoter Score® (NPS) is a popular CX (customer experience) metric that measures clients’ sentiment towards the brand based on the answers to one question: “How likely are you to recommend [company X] to a friend or colleague?”. It’s typically distributed in a survey form. It can help you with:
    • Customer satisfaction Levels
    • Growth Potential
    • Customer experience quality
    • Brand Perception
    • Organization performance
  3. CSE (Customer Effort Score)
    This reflects how easy it is for your clients to interact with your product and how well your website matches the visitor intent. It can be about navigating your product, contacting your support team, placing an order, or whatever else fits into your customer journey. You can also use CES (Customer Effort Score) to gauge how easy it is for your customers to interact with your company.

Measuring and analysing customer satisfaction should become a permanent addition to your business. Not just something you do from time to time or deal with a reputation crisis.

Customer survey software can help you set up recurring surveys, collect your answers, and analyze them in one place. This will let you create a sustainable customer satisfaction measurement process.

Conclusion

In Conclusion, Customer satisfaction plays a vital role within almost any business. It acts as a key differentiator that enables you to attract new customers in competitive business markets. Not only is it a leading indicator used to measure customer loyalty and retention, it enables businesses to identify unhappy customers, reduce customer losses and negative word of mouth whilst increasing revenue.

So, the question to ask yourself and your team is this, “What are you doing to improve Customer Satisfaction?”

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