Customer satisfaction, a term used in marketing, measures how well the expectations of a customer concerning a product or services provided by a company have been met.
Experts point out that customer satisfaction can be achieved by focusing on a combination of factors such as the quality of the product; value of product relative to price; time issues related to product availability, availability of sales assistance, time waiting at check out, and delivery time.
In addition, they note that the atmosphere of store, such as cleanliness, organisation and helpfulness as well as convenience concerns such as location, parking and hours of operation have been discovered to be determinants of customer satisfaction.
Customer satisfaction is seen as a key indicator within business. For instance, in a competitive market place where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy.
It drives business growth
A security service provider, Mr. Richard Amunwa, says that the relationship between customer satisfaction and business growth must be strong.
He adds that understanding customers’ attitude, their needs, perception and psychology can help in dealing with hard-to-satisfy clientele.
According to him, if customers are not satisfied, the business may not experience growth, as there won’t be referrals.
“In as much as the relationship between customer satisfaction and business growth cannot be overlooked, then, it is essential for businesses to effectively manage customer satisfaction,” he says.
He explains that more is spent on advertising when customers are not satisfied, but when there is a good customer satisfaction; customers do half the advertisement for the company.
Experts have also discovered that within organisations, customer satisfaction ratings can have powerful effects because they allow employees to focus on the importance of fulfilling customers’ expectations.
They stress that when the ratings dip, they warn of problems that can affect sales and profitability, saying that these metrics quantify an important dynamic.
It boosts business marketing
A business manager, Mrs. Toyosi Benson, says that when a business satisfies its customers, the customers become loyal and the business in turn gets positive word of mouth marketing which is both free and highly effective.
According to her, a satisfied customer is likely to return.
“He or she might even evangelise for the firm and willingly recommend the company. However, unsatisfied customers are unlikely to return. They can hurt the company further by making negative comments about it to prospective customers,” she adds.
In researching satisfaction, firms generally ask customers whether their product or service has met or exceeded expectations implying that expectations are a key factor behind satisfaction.
Past experiences show that when customers have high expectations and the reality falls short, they will be disappointed and will likely rate their experience as less than satisfying.
Through research, it has been noted that the importance of customer satisfaction can’t be understated because the act of measuring customer satisfaction has been shown to improve customer retention, which leads to the growth of a company.
So, how can paying close attention to customer satisfaction help a company?
Below are the ways to help your bottom line by prioritising customer feedback.
Create a customer focused culture
According to a research by Bain &Company, a customer is four times more likely to buy from one of your competitors if their problem is service related versus price or product related.
It suggests that by emphasising the importance of customer satisfaction throughout your entire company, you will be able to create a culture that truly puts customers first.
It explains, “Having this type of culture is exactly what is needed to build a brand that’s associated with great customer service. Since a truly strong brand is hard to replicate, your company will have a major competitive advantage if you focus on improving on satisfaction through employee engagement.”
Making it personal reduces cost
A misconception about maximising customer satisfaction is that it will increase costs.
However, from research, it is six to seven times more costly to attract a new customer than it is to retain an existing customer and prioritising customer satisfaction can help to control costs.
The research also explains that personalisation is a powerful strategy to increase customer satisfaction and maximise customer retention because customers are more likely to be comfortable with businesses that know them and address their needs.
It added that since it is easier to manage and use customer information, a company should always look for new ways to make every customer feel important, and that what it is offering is specifically tailored to them.
Customer loyalty may be advantageous
Price insensitivity is a key benefit of loyal customers, but return customers are not the only ones who are open to paying a higher price for quality.
A report published by Defaqto research found that 55 per cent of customers would pay more for a better customer experience.
According to the research, making customer satisfaction a top priority may give a company a little freedom on price and other places where it could be at a competitive disadvantage.
It adds that delivering unique service to customers also makes it possible to actually raise prices and still come out on top of competitors. Good service increases the value of a product.
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