1. CUSTOMER SATISFACTION The degree of satisfaction provided by
the goods or services of a company as measured by the number of
repeat customers. It is a measure of how products and services
supplied by a company meet or surpass customer expectation.
Customer satisfaction is a marketing term that measures how
products or services supplied by a company meet or surpass a
customers expectation. SIGNIFICANCE OF CUSTOMER SATISFACTION
Customer satisfaction is important because it provides marketers
and business owners with a metric that they can use to manage and
improve their businesses. Here are the top six reasons why customer
satisfaction is so important: Its a leading indicator of consumer
repurchase intentions and loyalty Its a point of differentiation It
reduces customer churn It increases customer lifetime value It
reduces negative word of mouth Its cheaper to retain customers than
acquire new ones 1. Its 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
2. give you a rating of 9 or 10 are your potential customer
advocates who you can leverage to become evangelists for your
company. Scores of 6 and below are warning signs that a customer is
unhappy and at risk of leaving. These customers need to be put on a
customer watch list and followed up so you can determine why their
satisfaction is low. 2. Its a point of differentiation In a
competitive marketplace where businesses compete for customers;
customer satisfaction is seen as a key differentiator. Businesses
who succeed in these cut-throat environments are the ones that make
customer satisfaction a key element of their business strategy. 3.
It reduces customer churn An Accenture global customer satisfaction
report (2008) found that price is not the main reason for customer
churn; it is actually due to the overall poor quality of customer
service. Customer satisfaction is the metric you can use to reduce
customer churn. By measuring and tracking customer satisfaction you
can put new processes in place to increase the overall quality of
your customer service. 4. It increases customer lifetime value A
study by InfoQuest found that a totally satisfied customer
contributes 2.6 times more revenue than a somewhat satisfied
customer. Furthermore, a totally satisfied customer contributes 14
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 the returns on your marketing
dollar.
3. Customer lifetime value is a beneficiary of high customer
satisfaction and good customer retention. What are you doing to
keep customers coming back and spending more? 5. It reduces
negative word of mouth McKinsey found that an unhappy customer
tells between 9-15 people about their experience. In fact, 13% of
unhappy customers tell over 20 people about their experience. How
much will that affect your business and its reputation in your
industry?Customer satisfaction is tightly linked to revenue and
repeat purchases. What often gets forgotten is how customer
satisfaction negatively impacts your business. Its one thing to
lose a customer because they were unhappy. Its another thing
completely to lose 20 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. 6. Its cheaper to retain customers than acquire
new ones This is probably the most publicized customer satisfaction
statistic out there. It costs six to seven times more to acquire
new customers than it does to retain existing customers.
STARATEGIES TO INCREASE THE CUSTOMER SATISFACTION In a business
world where customer acquisition costs are sky-rocketing, small and
medium businesses must focus on building a customer experience to
increase customer satisfaction. 1. Treat your customers like they
are your boss Here are some of the approaches I recommend
businesses use: Thank all your customers for their business
4. Go out your way to help customers Try to impress your
customers as if you want a pay raise Think about your paycheck
every time you talk to a customer Keep your promises and integrity
2. Focus on measuring customer satisfaction Measuring customer
satisfaction can help you reduce the number of unhappy customers.
So how do you measure customer satisfaction? Use one of these four
Online Survey Tools Focus on these Customer Satisfaction Metrics 3.
Build customer loyalty to increase customer satisfaction Customer
satisfaction is worthless. Customer loyalty is priceless. - Jeffrey
Gitomer Jeffery talks strongly about customer loyalty and its
relationship with customer satisfaction in his book, Customer
Satisfaction is Worthless, Customer Loyalty is Priceless. He
believes that businesses should be focuses their efforts on
creating loyal customers, that sticky and not easily influenced by
competitors. I agree with Jeffery and have included my five
favorite ways to build customer loyalty to increase customer
satisfaction: Remember special occasions like birthdays Strive to
empower and educate customers Invest in a self-service support
channel Top level managers must lead from the front with customer
service Talk to your customers, tap into what they want and
deliver
5. 4. Avoid making these customer retention mistakes No
business is immune to unhappy customers. In fact, even companies
with the best customer service in the world will still lose up to
9% of their customers to competitors. The good news is you can do
something to stop customers defecting. Here are three common
customer retention mistakes that are killing your customer
satisfaction: You are ignoring customer feedback You are taking
customer feedback to personally You are using long, boring customer
feedback surveys 5. Set customer expectations early Setting
expectations too high is a common mistake a lot of businesses (and
salespeople) make when bringing on new business. How many times has
your sales guy made ridiculous promises to push a deal over the
line? Theres no better feeling than as a customer to have your
expectations exceeded. 6. Learn how to survey your customers the
right way A customer feedback survey is the best way to find out
how satisfied your customers are, find ways to improve your product
or service, and identify customer advocates who really love your
product. Use a customer feedback survey that asks participants to
rank (1-10) how likely they are to recommend you. A quick and
relevant survey will help increase survey response rates. 7. Email
is the best channel to increase customer satisfaction 59% of B2B
marketers believe email marketing is still the most effective
channel in generating revenue. If its so good for marketers, why
dont we use it more to increase customer satisfaction?
6. 8. Tap into social media to track and monitor customer
satisfaction so you can keep your customers happy It costs a
company lot every time they lose a customer. Can you afford to not
be monitoring and tracking customer satisfaction? With your
customers now using their mobile phones up to 150 times per day,
its important to recognize that they will turn to social media to
leave their customer complaints. Your job is to make sure you use
social media monitoring tools to keep track of positive and
negative feedback, and resolve them accordingly. In fact, social
media provides a great opportunity to actually increase customer
satisfaction. Heres how you can do just that: Use social media to
monitor brand mentions and sentiment Use social media as a customer
support channel Use social media to hold Q&A sessions with
customers 9. Stats dont lie, understand the importance of customer
satisfaction If my first eight ideas werent already enough, its
worth reading about why I think customer service is the new
marketing. Here are three mind-blowing facts that should motivate
you to start focusing on increasing customer satisfaction.
According to Bain and Co., a 5% increase in customer retention can
increase a companys profitability by 75%. Gartner Group statistics
tell us that 80% of your companys future revenue will come from
just 20% of your existing customers. Lee Resource Inc. found that
attracting new customers will cost your company five times more
than keeping an existing customer.
7. COMPONENTS OF CUSTOMER SATISFACTION Customers are satisfied
whenever they consistently receive: 1. A perfect product 2.
Delivered by a caring, friendly person 3. In a timely fashion 4.
The support of an effective problem resolution process.
