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Are you putting enough focus on customer satisfaction in your business? If not, it is time to do so! Besides, you already know this – it’s all about the customer.
Customer satisfaction should be a top priority of every business because happy customers are more likely to stick around and recommend your business to others. Satisfied customers are also more likely to return after making a big purchase and become loyal supporters of your brand.
Are there really sweeter words to the ears of entrepreneurs? We don’t think so.
What many business owners do not realize, though, is that there are a few specific things they continuously need to keep their customers satisfied.
In this blog post, we will list all the reasons you should invest in customer satisfaction and suggest some ways to improve it, to help your business thrive!
So read on–your customers will thank you later.
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The Importance of Customer Satisfaction
Customer satisfaction (CSAT) is a way of measuring how content and satisfied your customers are with your company’s product and services. It is used to help you understand how well your customer experience meets your customers’ expectations, and how potential buyers perceive your product.
As one of the most important metrics and key performance indicators – KPIs, customer satisfaction comes in handy, especially when you want to measure the effectiveness of your wider customer training initiatives.
Apart from bringing big returns and profits for your business, high customer satisfaction is important for a multitude of additional reasons. According to research by Zendesk, customer satisfaction leads to greater customer retention, increased lifetime customer value, and stronger brand reputation.
In a nutshell, these are the key benefits of customer satisfaction:
Customer satisfaction relies on customer experience (CX) and is important because all the aforementioned points are great indicators of business growth. According to Gartner’s 2017 report, two out of three marketers say their companies compete mostly based on CX and 81 percent of them believe it is the main competitive factor of their industry.
Another research led by Bain & Company confirms that it is less costly to keep an existing customer happy than to gain a new customer. This means that building loyal customer relationships will generate higher ROI as repeat customers will keep buying from a company. ROI may vary among different industries, but for the financial services, a 5% increase in customer retention produces more than a 25% increase in profit. Imagine what it could do for your business!
Therefore, it is essential to ensure that customers who are already engaged continue to be happy every step of the way throughout the entire customer journey. Keeping customer satisfaction high allows you to predict your business revenue and growth while helping you create a loyal customer base that keeps coming back for more.
The Negative Effects of Poor Customer Satisfaction
Unhappy customers will almost certainly have something bad to say about your product or service. If they do not get what they need on time, are not treated right, or are simply not satisfied with the quality of your product or the support you offer, they are going to put you on their blacklist and even start telling others to do the same.
As there are many similar products out there nowadays, many people rely heavily on reviews to make an informed decision. Online reviews can have a big impact on your sales, especially when they are shared on social media. Positive reviews have the power to get a customer to convert, but a negative review will prevent many from doing so.
PwC’s Future of Customer Experience survey showed that 59 percent of customers will stop interacting with the company after several bad experiences, and 17 percent will do the same after just one bad experience. Bad customer service can also cost a business a billion of dollars a year as a result of lost revenue and lower profits. Such numbers show that customers may leave a company forever because of poor customer satisfaction.
Luckily, though, there are strategies that help you move past this.
Despite of all the negative impacts of low customer satisfaction, it can reveal some profound information about your business. Low levels of customer satisfaction offer the opportunity to identify your customers’ needs and give your customer success team access to customer insights that help you improve the entire customer experience journey.
How to Improve Customer Satisfaction
Just because technology moves fast and customer demands and priorities change in an instant, it is a considerable risk to assume you already know what your customers want. Yes – you might have a general idea; if you want to be 100 percent sure, you must check in with them regularly.
The best way to do this is by interacting with them, asking and getting their feedback, and working your way up to building their trust in you by offering them exceptional customer service.
Here are some ways how to do this effectively:
1Conduct customer satisfaction surveys
Assuming that you already know your customers, you need to learn what it takes to satisfy them. An excellent way to do this is by encouraging them to participate in a customer satisfaction survey after interacting with your company.
These surveys are easy to understand and analyze, but they also save time and help you identify problem areas. The surveys can take different formats depending on which customer touchpoint you want to explore, measuring the customer satisfaction score – CSAT.
For example, it could be a customer service survey after interacting with your support team, a product satisfaction survey after they have used your product, or even before purchasing your product.
Customer satisfaction surveys are typically a list of questions that request customers to rate their service experience either on a simple 5 or 10-point scale, or express how they felt about it with pre-defined responses, from ‘Highly Dissatisfied’ to ‘Highly Satisfied’.
💡 You can create any type of survey using LearnWorlds’ powerful multi-purpose form builder! Use it to capture leads easily, learn more about your customers, or gather feedback.
2Use Net Promoter Score – NPS surveys
Like customer satisfaction surveys, net promoter score surveys can measure customer satisfaction, but they investigate a more long-term perspective, focusing on overall brand satisfaction and customer loyalty.
Whereas CSAT surveys ask specific questions about customer interactions with your company, NPS surveys will determine if customers would refer your products or services to their friends and family, taking into consideration their overall experience. If they have a positive experience, you can measure the likelihood of recommending your brand to others.
This can help you classify your customers into specific categories – e.g., promoters (those who rated a likelihood of 9 or 10), passives (those who rated a possibility of 7 or 8), or detractors (a probability of 6 or below) and then take the appropriate measures to engage them more.
3Invest heavily in your support team
No matter how unique your product is, business success and growth largely depend on how you treat your customers. Since your customer support members are at the frontline of your company, they are the ones who talk regularly with your customers and need to be good customer service providers.
As long as your support team eliminates poor customer service practices and strives to deliver fast responses, you have nothing to fear. So train your customer support team effectively and get them accustomed to your customers’ most essential needs. Create canned responses to the most common inquiries if you must, but make sure your customer support employees will go the extra mile to get customers what they need as quickly as possible. Trust us – it works!
4Reward customer loyalty
Not all your customers are the same. In fact, they are different in the rate they interact with you and at the level of engagement with your organization. To encourage them to stick around, love and trust your brand, you can offer incentives to your top ambassadors.
Here are some ideas:
Rewarding your customers’ loyalty shows that, as a company, you appreciate their valuable contribution. It also shows that you like to keep things personal, and that you prefer to engage with each customer at an individual level.
5Act on customer feedback promptly
Whenever you get a review or a complaint, try to react in real-time or as soon as possible.
To avoid churn, take your customers’ feedback seriously, use it to improve your business processes, and never ignore their complaints. Also, address negative customer feedback right away and come up with alternative suggestions or any compensation that suits their situation.
Upset and disappointed customers are more likely to share their opinions, which often backfires, as it helps build a bad reputation through word-of-mouth.
So challenge your existing perceptions and keep track of customer interests every step of the way. You will gain a better understanding of the value they expect from you and come up with actionable solutions to their problems.
6Offer omnichannel support
Customer feedback is the most valuable piece of information you can get your hands on as an entrepreneur, so you need to keep that communication channel with them open at all times.
Paying attention to your customers and hearing what they have to say always comes first, which means you want your support representatives to follow up on them through multiple channels, including social media, phone calls, and live web chats.
Doing so should help you resolve queries quickly, meet customer expectations, providing them with quick tips and directions while avoiding giving out repetitive information.
7Build an integrated community
With a dedicated online community in place, you get to improve the customer journey and gradually build more trust in your brand. It will also make it easier for them to network with others, feel part of a group and get more value and opportunities to use your product effectively. In such a friendly environment, you are more likely to foster and maintain greater brand loyalty.
Meet customers where they are and create a special online space where they can connect and interact with each other often. Enable them to exchange information, views, ideas, and opinions on things that matter to them. Encourage conversations, answer their questions or let existing customers guide the newbies around your website or give a tour of your product.
8Educate your customers
Start creating a customer-centric culture and focus on providing customers with your best and most valuable resources for free. Do not just offer training and additional support to your customers; be proactive and give specific directions and advice before they even ask for it.
If you do not yet have a customer education program, this is the best time to do so. As part of a broader and collective customer training effort, it will help you increase the customers’ level of interaction with your product. On top of this, you will help them learn how to use it to its maximum potential and allow them to integrate it better into their everyday lives.
This way, customers will get to know how to search for answers on their own and resolve their issues quickly, leaving them feeling as satisfied and connected with your brand as never before.
Measuring the Success of Your Efforts to Improve Customer Satisfaction
At any point, measuring the level of customer satisfaction towards your company is very easy. Being consistent and having a sustainable customer satisfaction measurement process to check if your customers are happy with your product and service is the key to success.
The key metrics to monitor for customer satisfaction are:
Customer satisfaction score (CSAT):
The customer satisfaction score metric uses questions related to specific interactions of customers to measure whether your product meets their expectations.
To calculate the CSAT score, simply add the sum of the survey responses using a 5-point scale satisfaction rating question – ‘Satisfied’ to ‘Very Satisfied.’ The higher the number is, the happier your customers are.
Customer satisfaction index (CSI):
The customer satisfaction index metric shows the overall customer satisfaction with a company regarding product quality, customer service, price, and more. It is like the customer satisfaction score, but this combines different attributes and helps determine why customers are satisfied or dissatisfied.
CSI = (attribute 1 + attribute 2 + attribute 3) / 3
Attribute 1 – Customer care = 65
Attribute 2 – User experience = 50
Attribute 3 – Price = 60
CSI = (65 + 50 + 60) / 3
Then the CSI is 58.33.
Net Promoter Score (NPS):
The net promoter score is an index that ranges from (-100) to (+100) and reflects the willingness of customers to recommend your product or services to others. With NPS, you can gather quantitative data that you can compare against your industry’s benchmark.
To calculate NPS, ask your customers to answer a survey question on the likelihood of recommending your product and rate it using a 10-point scale.
Customer effort score (CES):
The customer effort score is a metric that combines CSAT and NP; it calculates how much effort customers have put into specific interactions with your company.
To measure it, count the average of all the answers you collected from respondents. When the number is low, it means that customers are putting too much effort into interacting with you.
💁 Even though customer lifetime value, customer acquisition, and customer churn are more related to sales and marketing, they can also help you get a more accurate view of overall satisfaction. Learn more about these KPIs here.
What’s Next: Make Customers Your Number One Priority
Even more so today, there is a major focus on customer satisfaction with a growing interest in offering the best service to existing customers.
A Gartner’s 2021 report shows that 64 percent of customer service and support leaders say growing the business is the most critical priority in 2022. This shows a shift towards adding value and growing existing clients having customer retention as the main goal.
How does this affect you?
Regardless of your industry, achieving high customer satisfaction is a must. After all, your customers are the people who help to keep your business alive.
Brands that have high customer satisfaction levels have a defensible advantage over their competitors. Since it can either make or break your business, try to keep your customers happy, and get brand ambassadors that will help you stay relevant in the market.
Further reading you might find interesting:
Kyriaki is a Content Creator for the LearnWorlds team writing about marketing and e-learning, helping course creators on their journey to create, market, and sell their online courses. Equipped with a degree in Career Guidance, she has a strong background in education management and career success. In her free time, she gets crafty and musical.