How Customer Satisfaction is Important for Business?

Posted by Abdullah Sadiq on January 29th, 2021

“The Customer is Always Right”

As basic as it sounds, it is a fact that is true in every meaning of the phrase. The talk about customer satisfaction and its importance is an ever going discussion. Most business owners say that customer satisfaction is important, but do they truly believe it? I guess not. It reflects in the actions and decisions that business owners make, and most of the time customer satisfaction is the least of their concern. When the Rolling Stones sang “I can’t get no satisfaction”, we all enjoyed it. But hearing this from a customer is the last thing you want. 

What is Customer Satisfaction?

Customer Satisfaction in terms of marketing is defined as the measurement of how happy a customer is from services or products provided by a company. Customer Satisfaction not just about the quality of the product but the whole process of creating the product to the supply of the product. 

The goal of any business is to generate revenue. The problem lies in the fact that it’s the customers who decide the extent of revenue you can generate. When a business spends all the time and money on developing a product, but don’t keep customers in their mind, they are destined to fail. To understand it simply think of it in this way, 

• Low Customer Satisfaction = Low retention rate

• Low retention Rate = Decrease in Customer Base

• A decrease in Customer Base = Less Revenue Generation

As you can see even if you have a great product, best prices but the customer experience is not there, your business will struggle. 

“If you do build a great experience, customers tell each other about that. Word of mouth is very powerful” Jeff Bezos-Amazon

As now you know that customer satisfaction is a must for any business to not only thrive but to even survive. Now we will discuss in detail why customer satisfaction is more important than you think.

Importance of Customer Satisfaction:

1. Loyal Customer Base:

Acquiring a new customer is way harder than retaining a new one. The difference between a customer and a loyal customer can be the deciding factor. And the key to turning your customers into loyal customers is customer satisfaction. Happy customers not only stay with you, but they bring in new customers. 

As Chip bell said: 

“Loyal customers, they don’t just come back, they don’t simply recommend you, they insist that their friends do business with you.” ~ Chip Bell 

Word of mouth is stronger than any review or advertisement of your product or service. One happy customer is equal to 9 referrals. So to understand this just consider that you have 100 happy customers, they produce 900 referrals. If those 900 customers become loyal customers they refer to 9000 more customers, and the cycle goes on. To summarize it all loyal customers are like a perpetual source that will keep producing customers.

2. It can be the differentiating factor:

In today’s world, everyone is fighting to gain more and more customers. In this competitive marketplace, it is hard to capture new customers as there are plenty of options available. Knowing what your customers think and want can be the biggest difference between you and your competitors. When you are aware of what your customers want, you can improve your products and services accordingly. There are many ways to record customer satisfaction. One of the best and widely used methods is customer satisfaction surveys. With quality surveys, you can easily analyze your business and its shortcomings. Once you know what your customers think, you can easily take steps to improve your business based on customer reviews. As your competitors don’t change their service and products according to their customer needs. You will stand out as the superior choice. This way you can outdo your competitors with a single swift move.

3. Curtail Customer Churn:

Customer churn or Customer attrition is the determination of the percentage of customers that stopped using a product or service during a specific time interval. High customer churn rates can inflict a really negative impact on your business. As stated in a report by 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”. When your customers are satisfied with your services or products, they will stay with you throughout. Customer satisfaction not only helps you to improve your ongoing products or services. It also provides you valuable intel to design and improve future projects so that you always have the “it” factor. With products and campaigns designed according to your customer’s needs, you will create an amazing customer experience. This way your customers won’t leave you and stay with you which will reduce customer churn to a greater extent. 

4. Satisfied customers mean happy employees:  

As important as the customers are, employees are similarly important. They are the eyes and ears of your business. They represent what you provide and are the embodiment of all that you stand for. No one appreciates being yelled at. Employees deal with all kinds of customers. Dealing with an upset customer is a situation no one wants to be in. but when you are not delivering what your customers want, they will stay angry all time. When employees have to deal with angry customers all the time, they will not stick at the job for long. Satisfied customers not only impact your revenue but also the whole working environment. Customer satisfaction and employee satisfaction are co-related. If one is happy the other one will be too. This relation defines how well the system will carry on and how easy or hard it will be to manage all matters. Train your employees to treat customers with respect and they will get respect in return. 

5. Customers are free to switch:

It is obvious that customers have buying options now more than ever. Nowadays people change their favorite brands every day. The reasons can be different. Reasons like price, quality, and customer services can be the governing factors for any customer when deciding which brand to choose. It is evident from studies that if customer services are better, most of the customers are willing to pay more than the average price. But if the customer is not satisfied with your services, it will not think twice before switching to some other places. Secondly, customers and their needs change continuously. Therefore, it is important that you stay in touch with your customers to get their reviews and response. You can use satisfaction surveys, email marketing, and other means to stay connected. To keep your customers with you, keep them engaged. Send them personalized offers, discounts, and other interesting information. This way your customers will stay with you for the long-term and will have a healthy relationship.

Final Thoughts:

Customer Satisfaction is the basic need for any business to thrive. It will benefit both you and your customers. The importance of customer satisfaction is only increasing by each day. The best method is to collect, record, and analyze data taken from customers and use this data to create an improved customer experience. There is always room for improvement, so take steps to improve the customer experience at every step of the funnel. This way you can convert customers into your brand ambassadors.