Yes, product quality matters. Yes, a competitive price will get you far. But, the data has spoken. According to Walker, by the year 2020 the customer experience will replace price and product as the key brand differentiator. So, the success of your business depends on the overall experience and customer satisfaction you deliver.
While customer expectations are continually increasing, businesses shift focus on the experience. Ultimately, consumers are drawn to the brands that make good on their promise and provide exceptional experiences across the customer journey. In this brand-new world, Walker’s data shows that 86% of consumers will pay more for better customer experience.
What is customer satisfaction?
Customer satisfaction is a measurement used to quantify how customers feel about their interaction with your brand and it reflects the degree to which you have managed to provide a customer experience that meets expectations.
Why does customer satisfaction matter?
Many argue that customer satisfaction is simply the lack of, well, dissatisfaction. The logic here is that instead of aiming for satisfaction, companies should strive to delight the customer with the experience they provide. Still, focusing on customer satisfaction is the first step towards an elevated customer experience that promotes loyalty.
So, let’s drill down on this a bit more.
Either way you look at it, satisfied customers are good news. And this is why:
Reduced churn
The only way to identify frustrated customers is by measuring satisfaction. If you can’t identify unsatisfied customers, you can’t foresee or prevent churn. It goes without saying that losing existing customers is bad for business.
Customer success
Research shows that growing companies are more likely to prioritize customer success. On that note, measuring satisfaction will not only help you identify frustrated customers but also those customers that find success when using your products. Prioritizing customer success and tracking down how you are performing while doing so is a no brainer if your goal is to grow your business.
Loyalty
Repeat customers spend 67% more than new customers. On top of that, 92% of consumers trust recommendations from friends or family when considering the purchase of a product. In other words, customer loyalty boosts revenue streams and brings new business solely by word-of-mouth. That means you can save your advertising money and put it to different use. In the greater scheme of things, you can’t have loyal customers unless you keep them satisfied. And even though, customer satisfaction does not guarantee loyalty, it sure is a good place to start.
Determining ROI
Increased customer satisfaction is an indication that the money you invest to improve the customer experience is money well spent. You can use customer satisfaction scores to benchmark your performance and figure out if your CX strategy is panning out the way you hoped it would or whether you need to revise it. As a result, customer satisfaction is a fundamental customer experience KPI to track.
How to measure customer satisfaction?
As a general rule, businesses use surveys to measure customer satisfaction and track whether customers perceive their experience with the brand in a positive or negative manner. Customer satisfaction scores are measured by interaction type. There are two types of customer satisfaction surveys:
- Direct transactional surveys: this type of survey is designed to measure how the customer feels about a specific transaction that happened before filling out the survey. These surveys are not necessarily focused on the customer’s overall perception of the company but are concerned with measuring the experience at the most recent point of interaction.
- Overall satisfaction surveys: these surveys are designed to measure the customer’s overall opinion of your company which is based on a combination of all interactions and other factors.
The responses to a customer satisfaction survey, such as Net Promoter Score ® (NPS) or the five-point Likert scale give you a number that points to the average level of customer satisfaction topped with an idea of customer loyalty.
So here we are. Customer satisfaction matters because it helps you identify pain points, increase customer retention and improve the customer experience. It might be worth your time to start measuring it.