Most decision-makers understand that customer satisfaction is essential. Yet, too many companies approach customer satisfaction as an afterthought, it becomes a “nice to have” rather than a “must-have”. In this article, you’ll learn why focusing on customer satisfaction is so important, and what the key reasons are for you to prioritise it and make it a vital part of your business practices.
What is customer satisfaction?
Customer satisfaction is the measurement of how pleased customers are with their interactions and overall experience with a company. It includes how well products and services fulfil or exceed their expectations, as well as how smooth and convenient the whole customer journey is compared to other suppliers and alternatives.
Why is customer satisfaction important?
The globalised nature of nearly all business today–combined with rapid digitalisation and onlinification of commerce–means that most companies are increasingly competing on overall customer experience rather than the value derived from their products or services. In other words, customer satisfaction has never been more important!
These are five generally applicable key reasons to priorities customer satisfaction:
Existing customers are worth more than new customers.
As a rule of thumb, the lifetime value of a loyal customer is worth up to ten times of the first purchase of a new customer.
Dissatisfaction is the main reason customers leave.
The main reason customers stop buying from a company is usually dissatisfaction and a negative experience.
Satisfied customers spend more money.
When customers are pleased with the overall value they derive from your company; they tend to purchase more from you.
Customer satisfaction is the easiest way to differentiate.
Customer experience can set you apart from the competition. More satisfied customers means you will sell more and earn more.
Customer satisfaction helps you acquire new customers.
Improving customer satisfaction will lead to more existing customers recommending your company to their peers.
How to measure customer satisfaction.
One of the metrics most commonly used for assessing customer satisfaction is the Net Promoter Score (NPS). It is based on responses to a single question: “How likely is it that you would recommend our company/product/service to a friend or colleague?”.
Download the ebook below to learn about the key reasons you should prioritise customer satisfaction today!