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The 5 reasons to measure customer satisfaction
Quite simply, customer satisfaction involves offering products and services to your customers that meet their needs, expectations, and demands. More and more companies are realising that sustainable growth of their businesses depends in large part on their ability to satisfy their customers. Yet, some companies have yet to put customer satisfaction at the heart of their strategy.
There are at least five reasons to measure customer satisfaction before, during, and after purchases using satisfaction indicators like NPS, CSAT, or CES. These five may not be the only reasons, but they are the ones we believe to be important. So, without further ado, here they are:
1. Gain a better understanding of your customers' needs and expectations
First of all, measuring customer satisfaction will help you gain a better understanding of your customers and their expectations. This is crucial because there is often a big difference between how you perceive your customers’ needs and expectations and what the reality is.
A company's success lies in its ability to offer products and services that fill customer demand. Measuring customer satisfaction helps you take stock of that demand, find out what your customers like, and maybe even discover what they don't like and what leads to dissatisfaction.
A proper understanding of your customers’ satisfaction will help you identify their specific needs, better than any market study.
2. Reduce direct and indirect costs related to customer dissatisfaction
Customer dissatisfaction is one of the top dangers for any company. Several studies have shown the considerable economic and financial impact of customer dissatisfaction in an environment of high consumer volatility and stiff competition. According to the consultancy Livework Studio, 91% of consumers who are dissatisfied with your products or services will not come back to your company.
A high level of customer dissatisfaction leads to lost customers in the short and medium terms. You also shouldn't forget about the indirect costs related to customer dissatisfaction, particularly those from the time-consuming processing of claims and complaints.
This makes it worthwhile to dedicate time to measuring customer satisfaction. By doing so, you will be able to identify the factors behind dissatisfaction and take corrective action before it's too late and your customers jump ship.
3. Respond to the challenges of customer acquisition
There are two ways to increase your revenues. The first is to acquire new customers, the idea being ‘more customers = more revenue’. The problem is that acquiring new customers is getting more and more expensive.
The second way to increase your revenues is to focus on customer retention and loyalty rather than acquisition. In other words, make sure that your customers buy more, and more often, rather than focusing solely on growing your customer base. It's a much more economical solution: working to keep a customer costs less than finding a new one.
Of course, a satisfied customer will not automatically become a loyal one. The mechanisms in play are more complex: a customer may be satisfied but only make a purchase one time; conversely, a customer may not be satisfied at all and still remain loyal, whether out of habit or because there are no other companies offering equivalent products or services.
In the end, satisfying your customers is the surest way to gain their loyalty. Yet another reason to measure customer satisfaction and improve it. Measuring brings knowledge; knowledge is power.
4. Boosting your company's brand image and reputation
Naturally, you have competitors. How can you set your company apart from them? By boosting your brand image. Your brand image is the perception that consumers (i.e. your potential customers) have of your company. This perception can come in varying degrees of negativity and positivity. You need it to be positive.
As you surely know, word of mouth is one of the top factors that influence brand image. Word of mouth is a social phenomenon that has always existed, but the evolution of communication tools (e.g. social media) has considerably increased its reach. Word of mouth can be positive if you offer products and services that satisfy your customers. However, it can also be negative and seriously damage your brand image.
Managing customer satisfaction through measurement and corrective actions will help you reduce customer dissatisfaction, and thus negative word of mouth, and increase customer satisfaction, and thus positive word of mouth.
5. Improve the effectiveness of your steps for contact improvement
The healthy growth of your company and its revenues depends on your ability to constantly improve your products and services. How can you make choices for improvement and prioritise future actions? By relying on the things that satisfy your customers, as well as, and perhaps above all, by being very attentive to feedback from dissatisfied customers.
The most important improvements are those that take you in the direction of what your customers want, like, and wish for. Listening to your customers by measuring their satisfaction will allow you to identify priorities for improvement.
The reasons to measure customer satisfaction are economic. It's an issue for the sustainability and growth of your company. You must focus your attention on measuring customer satisfaction. You can't only do so occasionally; it must be integrated into your company's work on a daily basis. For example, customer satisfaction indicators must be used as part of your management to motivate employees and make them aware of what's at stake with customer satisfaction. Measuring customer satisfaction must contribute to every part of your company and be included in a larger strategy that places the customer at the heart of it all (i.e. a customer-centric approach).