Customer Satisfaction
Customer satisfaction is defined as the degree of satisfaction provided by the goods and services of a company and is measured by the level of satisfied and regular clients.
Importance of Customer Satisfaction
Customer satisfaction is important as it provides marketers, business owners and the work force with a metric that they can use to manage and improve their businesses and careers.
Here are a list of six reasons why it is an important part of any business establishment:
•It is a leading indicator of consumer repurchase intentions and loyalty.
•It is a point of differentiation from the other competitors in the market.
•It reduces customer churn rate.
•It increases customer lifetime value.
•It reduces negative word of mouth.
•It plays a vital role to retain older customers and acquire new ones.
It is a leading indicator of consumer repurchase intentions and loyalty
Customer satisfaction is the best indicator of how likely a customer will make a purchase in the future. Asking customers to rate their satisfaction on a scale of 1-10 is a good way to see if they will become repeat customers or even advocates. Any customers that give you a rating of 7 and above, can be considered satisfied, and you can safely expect them to come back and make repeat purchases. Customers who give you a rating of 9 or 10 are your potential customer advocates who can leverage to become evangelists for your company. Scores of 6 and below are warning signs that customer are unhappy and at risk of leaving. These customers need to be put on customer watch list and followed up so you can determine why their satisfaction is low. See how satisfaction provides so much insight into your customer. That is why it is one of the leading metrics businesses use to measure customer repurchase and customer loyalty.
It is a point of differentiation from the other competitors in the market
In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as key differentiator. Businesses who succeed in these cut-throat environments are the ones that make customer satisfaction a key element of their business strategy. Picture two businesses that offer the exact same product. What will make you choose one over the other? If you had a recommendation for one business would that sway your opinion? Probably. So how does that recommendation originally start? More than likely it`s on the back of a good customer experience. Companies who offer an amazing customer experiences create environment where satisfaction is high and customer advocates are plenty. This is an example of where customer satisfaction goes full circle. Not only can customer satisfaction help you keep a finger on the pulse of your existing customers, it can also act as a point of differentiation for new customers.
It reduces customer churn rate
Price is not the main reason for customer churn rate, it is actually due to the overall poor quality of customer service.
Customer service is the metric you can use to reduce customer churn rate. By measuring and tracking customer satisfaction you can put new processes in place to increase the overall quality of your customer service.
Putting an emphasis on exceeding customer satisfaction and “wowing” customers at every opportunity will have a very positive impact on the level of your customer satisfaction performance.
It increases customer lifetime value
An “totally satisfied customer” contributes two times more revenue than a “somewhat satisfied customer”. Furthermore, a “totally satisfied customer” contributes ten times more revenue than a “somewhat dissatisfied customer”.
Satisfaction plays a significant role in how much revenue a customer generates for your business. Successful businesses understand the importance of customer lifetime value (CLV). If you increase CLV, you increase returns on your marketing amount. Customer lifetime value is a beneficiary of high customer satisfaction and good customer retention.
It reduces negative word of mouth
An unhappy customer tells between 9-15 people about their experience. That is a lot of negative word of mouth. How much will that affect your business and its reputation in your market? Customer satisfaction is tightly linked to revenue and repeat purchases. What often gets forgotten is how customer satisfaction negatively impacts your business. It`s one thing to lose a customer because they were unhappy. It`s another thing completely to lose 10 customers because of some bad word of mouth. To eliminate bad word of mouth you need to measure customer satisfaction on an ongoing basis. Tracking changes in satisfaction will help you identify if customers are actually happy with your product or service.
It plays a vital role to retain older customers and acquire new ones
Customer retention is the unsung hero of successful businesses as it is what ultimately lays the foundation of a company that is positioned for growth, and customer satisfaction level have a direct impact on whether a company can retain a customer or not. Also if a company is able to retain its older customers than chances are high that it`ll be able to acquire new ones in the process as retaining an older customer and acquiring new ones are closely related and it all depends on the level of satisfaction we offers to our customers from the goods and services we provide.
Ways to Improve Customer Satisfaction
Great customer is also about knowing how to handle your problems, responding to and resolving issues – something at which businesses can often excel.
If customer satisfaction is your goal than great customer service will get you there.
Some Simple Ways to Embed Customer Service in Day-to-day Operations
Listen and Learn
Listening is key to effective customer service and it can also help boost profitability.
Ways to prove to your customer that you are listening and how to make it count
Everyday Customer Interaction
Show you are listening to your customers by taking notes what your customers have said. Listen to their words and provide them clear and concise communication. Ask clarifying questions to gain understanding before you provide a response. If you can`t respond immediately be sure to provide a timeline for response and make a note to do so. Follow up, confirm the resolution and check for customer satisfaction and completion.
Facilitating Feedback
Look for ways to stay in touch with your customers and show them that you are listening and eager to keep the lines of communication open. Customer service is all about meeting the needs and expectation of the customer as defined by the customer. By soliciting feedback and using that information we can find new ways to ensure that our goods and services is relevant to them and hopefully it will open new lines of profitable opportunity. In order to have effective customer service, one must know what the customer want, provide it to them on consistent basis and asking them how they are doing.
Look for Ways to Treat your Customers as You Would Like to be Treated
How are customers being treated?
Put them at ease and make them feel comfortable.
Demonstrate that your customers are valued
Let them know that you think they are important. Your sincerity makes them feel good about you and your organisation.
Ask how to help your customers
Find out what they want. It is important that each customer encounter makes them feel satisfied.
Don`t challenge disgruntled customers
Listen, reassure them that you`ll escalate or act on their complaint and follow through until resolution.
Help customers
Help them get what they want. Make it easy for the customers to locate or obtain the information they need. Answer the questions in a timely manner and remember to carry through on your customer service goals. More than ever an effective communication is an important part of any customer service model.
Yes I agree that staying in touch with your clients will let them know that they are being valued. A productivity app for sales people can also be used to help easily log the activities done for a lead – whether it's sending an SMS or making a phone call.
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