The benefits of customer satisfaction are various, including increased competitiveness and growth. Customer satisfaction is essential to keeping your current customers and retaining new ones. Dissatisfied customers are a retention risk; losing them will hurt your overall customer journey.
Let us look at why customer satisfaction (CSAT) is so important for brands to succeed.
Also, don’t forget to download the free ebook: The Hacker’s Guide to Customer Experience, available toward the end of this guide!
What is customer satisfaction?
Customer satisfaction is measured by how well a company’s products or services meet customer expectations, but customers are the best people to ask for a customer satisfaction definition.
Don’t just ask them, “Are you satisfied?” Whether trying to build a reputation or a business, your relationships with your customers are the key to getting where you want to go in your career.
Given this, it’s important to go beyond just a number rating every so often to find out what matters to your customer, how they’re judging you, and what they want from a longer-term relationship with you.
Ask your customers what it means to them to be happy. Sending a simple survey with the question “How would you define customer satisfaction?” or even doing customer interviews are great ways to find out how your customers feel about the subject.
Even if you only have a few customers, this question can help your small business grow.
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. 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 with a huge customer base despite high prices. You can use customer satisfaction scores and your CSAT surveys’ inputs to improve 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.
2. 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. Regular CSAT surveys will help you measure customer satisfaction and identify factors that may hamper your CSAT scores.
3. 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.
4. 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 who rated you 7 or more are satisfied and 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 rated 9 or 10 are your biggest and most loyal advocates. You may use them to promote your brand and improve your CSAT scores.
5. 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 the focal to your customer strategy. No amount of marketing campaigns and promotions will help you if your customers are not satisfied. Brands with low customer satisfaction levels are likely to perish in the future. Brands with advocates are far more likely to do better than those without. You will have brand advocates when you have satisfied customers. So, as you see, it all begins and ends with customer satisfaction.
Halfway there? Congratulations! Luckily, you’ve learned a bit more about the importance of Customer Satisfaction and its interconnection with customer experience. If you’d like to take the extra mile and learn more about how customer experience can help you gain more happy, loyal customers and increase your business growth, download our free eBook: The Hacker’s Guide to Customer Experience – CX= Emotion x Value.
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 consider.
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 greatly affects 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 their great experiences.
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 are rumors of caterpillars in their foods. They trust the brand and understand any shortcomings or crises 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 often, and make recommendations to their colleagues, friends, and family. Run online customer surveys to note which areas negatively impact customer satisfaction and need improvement. This will help improve customer satisfaction and reduce customer churn.
4. Boost brand reputation and popularity for benefits of customer satisfaction
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 and 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 the benefits of customer satisfaction
Here are some ways that you can use to improve customer satisfaction for your brand.
- NPS surveys
Net Promoter Score surveys help analyze customer loyalty and are frequently used regularly in CSAT surveys. This blog details how your brand can get a good NPS score.
- Web intercept surveys
Web intercept surveys let many 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 or visitors.
- Customer service surveys
Customer service surveys help analyze whether 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 are satisfied with the interaction and their queries resolved.
- Social media handles
When customers talk about your brand, 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 support live chats now, and most big and small businesses do have them to interact with customers. It helps resolve queries and customer expectations, guide them to where they need to go, gather 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.
How QuestionPro can benefit customer satisfaction
QuestionPro can boost customer happiness in various ways:
- Understanding customer needs: With QuestionPro; organizations can conduct customer satisfaction surveys to learn about customer preferences. These surveys can help firms find areas where they meet or exceed customer expectations and where they need to improve.
- Customer pain points: QuestionPro feedback can help companies uncover customer problem areas. Addressing these issues can boost consumer happiness and loyalty.
- Net Promoter Score (NPS): NPS surveys from QuestionPro measure cUSTOMER loyalty. This poll assesses customer referrals. Businesses can track customer loyalty and improve by tracking the NPS score over time.
- Data-driven decisions: QuestionPro’s powerful reporting and analytics help organizations boost customer satisfaction with data-driven decisions. Reports and visualizations reveal consumer input trends, patterns, and correlations to enhance products and services.
- Improving customer communication: QuestionPro offers email, SMS, and social media to help businesses keep customers informed of product and service changes. Keep customers informed and involved to develop trust and satisfaction.
QuestionPro can help businesses enhance customer satisfaction by revealing customer requirements and preferences, pinpointing pain points and areas for improvement, assessing customer loyalty, and making data-driven decisions.
QuestionPro CX can help you manage your customer experience initiatives and track and measure them. Try the platform; you do need to put in your credit card, and signing up takes less than a minute.
Looking to deliver an exceptional customer experience with QuestionPro CX? Discover more about how to delight your customer at every touchpoint and turn them into brand advocates.