It’s been a long-held belief among business owners that excellent customer satisfaction is something worth pursuing. Businesses exist to earn profit by providing a product or service that clients need, and one way to ensure repeat business is by meeting or surpassing customer expectations and great service offered by customer service representatives in their inbound call center.
However, there’s a new school of thought among market researchers that contend otherwise, saying that it’s not customer satisfaction you should watch out for—rather the loyalty. Proponents of the Net Promoter Score (NPS) method asserts that a pleased customer doesn’t necessarily translate to more sales in the same way loyalty does. Because of this, they argue and tracking customer satisfaction has become irrelevant.
It’s a controversial idea that’s sure to grab your attention, but it’s also incomplete. Here are ten reasons why customer satisfaction still matters.
1. Customer satisfaction is a gateway to earning loyalty.
Measuring customer satisfaction and loyalty are like comparing apples to oranges because the former is a function of attitude while the latter goes much deeper.
Loyalty is a belief that was formed from having a customer encounter good experiences from your brand. Ensuring that a client is satisfied with every point of interaction is a process that leads to loyalty down the road.
2. You must keep customers satisfied to maintain their loyalty.
On average, it takes up to three years for a customer to become loyal to your business. Once loyalty has been earned, it’s important not to slack off because these are clients that can give you insights for improvement.
More importantly, they are the best candidates for becoming your ambassadors, and those who’ll keep coming back to buy from you during their lifetime—as long as you keep them satisfied.
3. It’s a key metric for project management success.
In project management, the key factors that are often given priority are time, scope, and budget. Client satisfaction is important but it’s usually given mere lip service, and not tied into the day -to-day decision-making process.
But for a project to be called a real success, it’s important to check in with those for whom it was created to begin with. Some questions to ask are the following: Is the project proceeding as expected? Does your client prefer to do something else? Do they have all the information they need?
4. Measuring satisfaction lets you know if a client will buy from you again.
There’s a strong correlation between satisfaction and repeat business. Keeping new customers happy will increase the likelihood of them buying from you again while poor customer service on your part, then lowers the chances of them coming back.
5. Clients leave because of poor quality service more than price considerations.
The main reason for attrition is not changes in your price points, but bad customer service experience.
The good news here is that as long as you pay attention to your customer’s needs and continue to “wow” them by exceeding their expectations, it’s easier to justify price increases when the time comes.
6. It keeps you ahead of your competitors.
As a market differentiator, nothing beats consistently delivering excellent service, and always going above and beyond your customer’s needs.
Take the case of brands like Starbucks, the Ritz-Carlton, or Disney. You need only mention the names of these successful brands and services to know that it’s their commitment to customer satisfaction that has kept them miles ahead from their peers.
7. It promotes customer retention.
Retention is closely tied to loyalty. Satisfaction keeps clients coming back for more and doing business with you in the future. They’re more likely to stick with your brand longer and eventually turn into the kind of advocates that will help spread the word for you, thereby earning you more customers down the road.
8. Acquiring new clients is more expensive than keeping the ones you already have.
It’s an oft-repeated statistic among customer service practitioners that it costs up to seven times more to acquire new clients than it does to retain the ones you already have.
This is why you should put more of your resources toward keeping your existing customers happy, instead of trying to reach out cold to new ones.
9. Disgruntled customers will spread the word about your business.
Negative word of mouth can be a death knell to a company, especially in today’s wired and interconnected world. It’s so much easier to spread negative reviews on various platforms.
Regardless between workers at the local water cooler, on sites like TripAdvisor, and various social media pages online—unhappy customers are becoming more vocal than before.
10. It improves customer lifetime value.
Customer lifetime value is a marketing term that predicts the net profit attributed to the entire future relationship with a customer.
The longer a client remains satisfied with your product or service, the longer they’ll stay with you, which in turn increases the chances of you getting a return for the amount of time and money it took to acquire your customer.
In a nutshell, it’s important to view customer satisfaction as an integral business metric and to take a holistic rather than a piecemeal standpoint.
There’s a good reason it’s been widely accepted as a key indicator over the years, so much that it’s become institutionalized and standardized in business circles. Simply put, keeping customers satisfied is important to achieve long-term success.