Customer satisfaction depends on the product’s perceived performance relative to a buyer’s expectations.
If the product’s performance falls short of expectations, the customer is dissatisfied. If performance matches expectations, the customer is satisfied. If performance exceeds expectations, the customer is highly satisfied or delighted.
Outstanding marketing companies go out of their way to keep important customers satisfied.
Most studies show that higher levels of customer satisfaction lead to greater customer loyalty, which in turn results in better company performance.
Companies aim to delight customers by promising only what they can deliver and then delivering more than they promise.
Delighted customers not only make repeat purchases but also become willing brand advocates and “customer evangelists” who spread the word about their good experiences to others.
For companies interested in delighting customers, exceptional value and service become part of the overall company culture. For example, L.L.Bean—the iconic American outdoor apparel and equipment retailer—was founded on the principle that keeping customers satisfied is the key to building lasting
relationships.
What is Customer Satisfaction?
Customer satisfaction is defined as a measurement that determines how happy customers are with a company’s products, services, and capabilities. Customer satisfaction information, including surveys and ratings, can help a company determine how to best improve or changes its products and services.
Why is customer satisfaction important?
Customer satisfaction is important because it helps to solve problems, prevent churn, and identify happy customers that can become your advocates and evangelists.
It’s an essential step in the process of building customer loyalty, creating customer delight, and generating positive word-of-mouth.
If you don’t measure customer satisfaction, you can’t identify unsatisfied customers that could churn or leave you negative customer reviews. You also can’t identify happy customers you could activate as evangelists or referrers.
Finally, you can’t predict, prevent, and proactively plan to prevent customer churn without metrics to analyze.
To properly measure it, it’s important to avoid common CSAT survey mistakes.
Benefits of Customer Satisfaction
1. Customer satisfaction helps you understand where you excel.
By tracking and measuring customer satisfaction, you can understand what your business does well, and thus continue doing it.
But you can’t find out unless you carry out customer satisfaction surveys.
Growing companies prioritize customer success, and an essential way to identify satisfied customers is through customer feedback.
Results will let you know who these customers are and what you’re doing that’s leaving them satisfied with their experiences with your brand.
When you have this information, you can continue doing the things they like in the hopes of inspiring customer retention, and you’ll reap the following benefits:
- It’s cheaper to retain an existing customer than it is to acquire a new one.
- Repeat, loyal customers spend more.
- Satisfied customers engage in word-of-mouth marketing, helping you with free acquisition.
2. Customer satisfaction helps you understand where you can improve.
If you don’t understand why your customers are unhappy, you can’t make changes to your product or services that make them happy and align with the experiences they desire.
Ensure you’re sending out customer satisfaction surveys, analyzing the results, and acting on negative customer feedback.
This is especially important if the feedback is tough to hear, as it will help you ensure that you take steps to prevent customer churn, negative reviews on your product pages or social media, or negative word-of-mouth reviews to family and friends.
3. Customer satisfaction leads to higher customer loyalty and advocacy.
If your business has positive customer satisfaction, then you have customers who are loyal to your brand.
These customers will refer new leads to your company and generate more testimonials for your marketing team. You can create customer advocacy programs for these users and encourage them to advertise on your business’s behalf.
Customer advocacy programs reward customers for referring your business to potential leads. Customers are given incentives to join the program, then receive gifts or offers in exchange for reviews and testimonials.
This creates a mutually beneficial relationship that rewards your best customers and keeps them loyal.
4. Customer satisfaction increases customer retention and reduces churn.
It should be no surprise that the happier your customers are, the better your customer retention will be.
After all, happy customers won’t have much reason to turn to competitors, so long as you keep them satisfied. On the other hand, unhappy customers will have plenty of reasons to churn, and it’ll be up to your team to convince them otherwise.
5. Customer satisfaction leads to a longer customer lifetime value.
Customer lifetime value (CLTV) refers to the expected profit you can make from a single customer for as long as they stay with your business.
If a customer is unhappy with your products and services, they’ll likely never return to your business after that initial purchase. That customer’s lifetime value is low, so you’d miss potential revenue opportunities.
If your customers are satisfied, however, they’ll likely stay with your business for a longer time, making repeat purchases and leading to a boost in profits.
How to Improve
Data is the key to improving customer satisfaction.
However, data alone can’t transform your customers from unhappy to loyal. You have to focus on gathering data effectively, then use those insights to take action.
You Follow these three steps to make it happen:
1. Conduct Customer Surveys
Surveys play a key part in your quest to improve customer satisfaction, so the feedback you generate must be useful.
Unfortunately, there are no guarantees. Even if your survey is perfect, customers don’t always tell the truth about how they feel.
What’s more, they might make mistakes when completing your survey. In either case, you’re not getting a true picture of customer satisfaction.
2. Monitor Social Media Mentions
Customer surveys will only get you so far because they only gather opinions from the types of people who are happy to fill in surveys—which might exclude a huge chunk of your audience.
For a more accurate view of customer satisfaction, keep a close eye on social media, too. Tools like Linkfluence and Mention help monitor brand mentions and conversations relevant to your company and product.
They even use machine learning to assess the sentiment of those mentions.
This gives you access to a broader customer pool than potential survey respondents and ensures you’re on hand to help customers when they need it.
3. Implement Constructive Feedback
Once you’ve gathered a bunch of feedback, it’s time to take action.
One of the biggest challenges is to identify an effective, repeatable way to prioritize those actions. After all, it’s unlikely every customer wants the same thing. Some might be asking for faster shipping; others might want a slicker checkout experience.
Transparency is key. Most consumers are pretty reasonable, and they understand you have finite resources. Make it clear you’ve heard their feedback and, if the demand exists, you’ll work on a fix.
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