Customer satisfaction is essential to keeping your current customers and retaining new ones. Dissatisfied customers are a retention risk, and losing them will hurt your brand. Let us look at why customer satisfaction (CSAT) is so important for brands to succeed.
Top five reasons why customer satisfaction is important
It is imperative to understand the importance of customer satisfaction. Let us look at five key factors that make customer satisfaction important.
1. Repeat customers
Satisfied customers are likely to purchase from you again. One easy way of knowing this is through customer satisfaction surveys. Ask them to rate their satisfaction levels on a scale of 1 to 10 and see who will be happy to purchase from you in the future. Customers that rated you 7 or more are satisfied and are likely to engage with your business again. A score of 6 or below is cause for concern; these customers are unhappy with you and are a huge attrition risk.
Customers that rated 9 or 10 are your biggest advocates and most loyal customers. You may use them to promote your brand and improve your CSAT scores.
2. Competition differentiator
Customer satisfaction is the key to making or breaking brands. In this competitive world of a huge number of brands, customer satisfaction has to be focal to your customer strategy. No amount of marketing campaigns and promotions will help you if your customers are not satisfied. Brands that have low levels of customer satisfaction are likely to perish in the future. Brands that have advocates are far likely to do better than brands that do not. You will have brand advocates when you have satisfied customers. So, as you see, it all begins and ends with customer satisfaction.
3. Reduce customer churn
Contrary to popular belief, pricing is not the main reason for customer churn. Yup, you guessed it right; it’s customer service. We know of several brands that have a huge customer base despite high prices. You can use customer satisfaction scores and inputs from your CSAT surveys to improve upon your customer service processes. Poor customer service quality will hurt you and cost you customers in the long term. Seek continuous customer feedback to track your progress and routinely share it with your customer service reps.
4. Decrease negative word of mouth
According to McKinsey’s research, an unhappy customer will tell about their experience to anywhere between 9-15 people. Considering the number of dissatisfied customers you may have, that’s a lot of negative press. This will directly impact your business revenue and brand reputation. Repeat business rides on customer satisfaction, and unhappy customers are detrimental to your business. There will always be customer churn, but you do not want to lose customers based on bad word of mouth. Conducting regular CSAT surveys will help you measure customer satisfaction and identify factors that may be hampering your CSAT scores.
5. Retaining customers is cost-effective
The cost to acquire new customers is 6-7 times more than retaining your current customers. This puts into perspective how vital customer satisfaction is. Rather than spending huge amounts of money on acquiring new customers, spend a fraction of it on improving your existing processes and systems to retain customers. This will go a long way in saving costs and growing your business revenue.
Top five key benefits of customer satisfaction
Brands need to understand customer satisfaction benefits before they invest effort and resources in processes and systems to improve their CSAT score. Here are some key benefits of customer satisfaction that all brands need to take into account.
1. Customer loyalty
When your customers are satisfied, they believe in the brand and become loyal. These loyal customers give brands repeat business and form a major part of the revenue. Losing customers takes a huge toll on your business revenue and customer churn numbers. Adobe’s report said loyal customers spent 67% more than new ones via repeat orders, upsells, etc. Add to this the positive word of mouth to friends and family from your loyal customers, and it really starts to add up. Satisfied existing customers feel they can promote the brand to their loved ones for the great experiences they’ve had.
2. Support pillars
Satisfied customers are more likely to stand by in times of crisis; they care for the brand and want to see it thrive. This has been observed in many cases for big brands such as McDonald’s, when there rumors of caterpillars in their foods. They trust the brand and are understanding of any shortcomings or crisis that may befall them.
3. Sales revenue
Brands focussing on customer satisfaction actively have healthy sales revenue. They do not lose old customers and have a steady revenue stream from repeat business. Customer satisfaction and increased revenue are directly correlated. Satisfied customers stay loyal to your brand, interact with it, buy ofter, and make recommendations to their colleagues, friends, and family. Run online customer surveys to note which areas are impacting customer satisfaction negatively and need improvement. This will help improve customer satisfaction and reduce customer churn.
4. Boost brand reputation and popularity
Customer satisfaction impacts brand reputation and popularity. See customer feedback and figure out which areas could be improved and improve satisfaction. Is it accounts or customer service? Don’t be afraid to ask your customers; honest feedback will help manage expectations and act accordingly. Famous brands have dedicated teams and initiatives for improving customer satisfaction, which helps them achieve high sales figures.
5. Reduce marketing expenses
Satisfied customers are your biggest advocates. Their positive word-of-mouth lends your brand credibility, popularity, and helps acquire new customers. This saves brands a lot of money that they would spend on marketing and promotional campaigns to acquire new customers.
How to improve customer satisfaction
Here are some ways that you can use to improve customer satisfaction for your brand.
- NPS surveys
- Web intercept surveys
Web intercept surveys let a certain amount of your online visitors respond to online customer surveys. Your website visitors are shown a message about the customer survey, and they get an option to participate in the survey. They are preferred by many brands as they are non-intrusive, ensuring you don’t lose your website visitors.
- Customer service surveys
Customer service surveys help analyze if the customers are happy with a brand’s customer service. These are usually triggered after customers interact with customer service representatives and look to check if the customers were satisfied with the interaction and their queries resolved.
- Social media handles
When customers talk about your brand, its products, or services, it shows how they regard your brand. With social media, customers have the ability to provide instantaneous feedback. This could be good or bad. Using social media channels such as Facebook, Instagram, LinkedIn, or Twitter can help you gauge customer satisfaction, use these channels, and leverage their tools such as reviews, live polls, etc.
- Live website chats
All websites have the ability to now support live chats, and most big and small businesses do have them to interact with customers. It helps in resolving queries, customer expectations, guiding them to where they need to go, etc., gathering feedback, etc. Use live chats to engage with customers and seek their feedback to ensure you give them a fulfilling experience. You can use history to look at old chats and study patterns to bridge any gaps that may exist.
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