Customer satisfaction: 6 reasons why customer satisfaction is important (2023)

Do you know how happy your customers are with your products, services and their overall experience with your business?

If your answer is "no" or "I'm not sure," then take action and find out.

Measuring customer satisfaction can show you where your business is getting it right and where you're struggling to meet people's expectations.

If your customer satisfaction is low, you should quickly learn why and look for solutions.

On the other hand, high customer satisfaction indicates that customers are enjoying their experience with your company.

Did you know?

  • The likelihood of selling to an existing, satisfied customeris 60-70 per cent(while the probability of converting a new customer is 5-20 percent).
  • Over 33% of customerswould consider switching due to unsatisfactory customer service.
  • After a satisfactory customer experience,69 percent of the populationwould recommend the company to others, and 50 percent would use the company more frequently.

Because of the potential effects it has on your business, it is critical for you to understand what customer satisfaction is and why it is important to your business.

So in this article, we break down the basic definition of the term and look at some of the most important reasons to start measuring customer satisfaction.

You will also learn about:

  • What differentiates customer satisfaction from customer loyalty
  • The most popular customer satisfaction metrics out there
  • How to improve customer satisfaction for your company

Let's jump in, shall we?

Post content

  • What is customer satisfaction?
  • 5 reasons why customer satisfaction is important
    • 1. It helps you make smarter marketing decisions.
    • 2. It makes you stand out from the competition.
    • 3. It prevents your customers from blabbing.
    • 4. It asks for word of mouth referrals.
    • 5. It protects your online image.
  • How to measure customer satisfaction
    • 1. Set a goal
    • 2. Choose a customer satisfaction measurement
    • 3. Create a survey
    • 4. Get the timing right
    • 5. Analyze the data and come up with solutions
  • How to improve customer satisfaction
    • 1. Provide self-help resources
    • 2. Create an omnichannel experience
    • 3. Put the customer first
  • Conclusion
  • Want to learn more?

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What is customer satisfaction?

Simply put, customer satisfaction is how satisfied people are with the quality of the product and service they get from your business.

You measure satisfaction by conducting surveys that ask customers to rate their engagement or interaction with your company on a five-point scale.

The customer satisfaction questionnaire used for these surveys usually asks people to choose answers between "very satisfied" and "very dissatisfied".

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The results of the survey can give you an idea of ​​the health of your company.

If your product or service has shortcomings, it will be reflected in your customer satisfaction score.

Likewise, people's approval of your offers, prices, etc. will be reflected through a positive score - along with increasedcustomer retentionand referral rates.

What differentiates customer satisfaction from customer loyalty?

Customer satisfaction looks at how customers feel about your offerings at a given time.

Customer loyalty, on the other hand, measures their commitment to your company in the long term.

The former is driven by customer service and brand experiences, and so should youkeep these experiences positive.

6 reasons why customer satisfaction is important

Customer satisfaction can be a game-changer for your business, and here's why:

1. It helps you make smarter marketing decisions.

Customer satisfaction can take the mystery out of your marketing spend.

For example, customer satisfaction surveys can help you see which products are a hit with your customers.

Additionally, you can use surveys to learn which onescommunication channelscustomers actually prefer.

Insights like these clarify your vision so you can make profitable marketing decisions.

2. It makes you stand out from the competition.

Customer satisfaction can also serve as yoursunique selling proposition, which helps you stand out in a competitive industry.

That's because people no longer judge companies based on price or product. Instead, they evaluate the customer experience provided by a particular company.

So when you provide a great customer experience, you create an environment where satisfaction levels are high.

And it acts as a core difference between you and your competitors.

3. It prevents your customers from blabbing.

Churn happens when a customer decides to stop using your product or service.

That's what research by thinkJar found67 percent of the populationsee bad experiences as a cause of churn.

Since negative experiences often result in low satisfaction levels, measuring customer satisfaction can help you identify whether customers are churning at a high rate or not.

If your customer satisfaction is low, you can take steps to improve the overall quality of yourcustomer experience.

Not big – but small, sincere steps like offering customers a free replacement or providing support through their preferred channel. These can do wonders for your customer satisfaction levels.

Customer satisfaction: 6 reasons why customer satisfaction is important (6)

4. It asks for word of mouth referrals.

When customer satisfaction is high, people are much more likely to recommend your business.

According toAccenture55 percent of consumers show loyalty by recommending the companies they love to friends and family.

This can help inspire word-of-mouth referrals such as83 percent of consumersrely more on recommendations from their personal network than any other form of marketing.

Satisfied customers will share company recommendations on social media, discuss them in the workplace, and even advocate for their favorite company. There is nothing stronger than onereferencecreated through a positive experience.

5. It helps you identify areas of improvement.

Keeping an eye on customer satisfaction can also help you meet changing customer needs.

For example, your customers may be interested in a newer design or layout introduced by another company in the market.

And if they feel your product's design is outdated, they'll let you know by expressing their displeasure with it while sharing their preferences.

Bom.

You have something to work on and improve.

6. It protects your online image.

When you track customer satisfaction on social networks, you get an overview of both negative and positive feedback and can take relevant measures to protect your brand.

For example, you can reach out to unhappy customers and explain your side of the story. Apologizing is also part of reversing a negative experience.

Additionally, you can offer to make things right and provide a timeline for when customers can expect their issue to be resolved.

Also consider making all of this public.

As in, don't take conversations to a private inbox. Rather, respond to customer comments in open threads so thousands of others can see that you actually care about customer satisfaction.

How to measure customer satisfaction

Now that you understand what customer satisfaction is, let's look at how it is measured. Below are the steps for measuring customer satisfaction.

1. Set a goal

It may seem obvious, but the first step to measuring customer satisfaction is to set a goal.

Ask yourself: What is the purpose of this activity? What should I do with the data? If you make an effort, make sure you have a goal.

As an example, you can set a goal to improve the quality of customer service. The results you get from the customer satisfaction questionnaire tell you how your support team is currently performing.

If customers are already reasonably happy with your team, all you need to do is make a few adjustments (such as following up after an issue has been resolved) to reach your goal.

2. Choose a customer satisfaction measurement

Once you've set a goal, choose from one of the following customer satisfaction metrics to evaluate customer opinions:

Customer Satisfaction Score (CSAT)

Customer satisfaction is usually measured via the CSAT, which is the same 1-5 scale survey we introduced at the start of this blog post.

The advantage of using this metric is that it is simple to use and to get results: people can answer the customer satisfaction survey questions with just a few clicks.

To calculate the customer satisfaction score, ask customers to rate the questions using a survey scale of 1-5:How satisfied are you with [the speed of customer service, the familiarity of our team, etc.]?

Once you have the responses, divide the total number of "satisfied responses" by the total number of survey responses and multiply the value by 100.

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As you can see, the CSAT helps determine the average scores (expressed as a percentage) of satisfied responses.

The results generated by this method do not require a large amount of analysis, and you have the opportunity to follow up with customers to ask what could improve their customer satisfaction score.

Net Promoter Score (NPS)

In plain language, NPS is the result you get when you survey customers with the "would you recommend" customer satisfaction questionnaire.

With the Net Promoter Score, customers have the opportunity to rank a company from 1 to 10, with 10 being the highest customer satisfaction and 1 being the lowest.

What's different about NPS is that it categorizes customers into three groups based on their score: Detractors, Neutrals, and Promoters.

Customers who rate your business from 0 to 6 are classified as "Detractors". Detractors are dissatisfied customers who are very likely to stop giving you their business.

People who give you 7 or 8 are "neutrals" who can either become your advocates or switch to your competitors.

Finally, those who choose 9 or 10 are categorized as "Promoters". Promoters are considered loyal customers who are very likely to spread positive word-of-mouth about your business.

To calculate the Net Promoter Score, subtract the percentage of Detractors from the percentage of Promoters.

For example, if there are 100 respondents and you get 10, 30, and 60 responses in the range of 0 to 6 (Detractors), 7 to 8 (Neutral), and 9 to 10 (Promoters), respectively, the NPS will be as follows:

Net Promoter Score = 60/100 * 100 – 10/100*100 = 50.

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The best score you can get is +100 and the worst score you can get is -100.

The higher the NPS, the more likely customers will recommend your company to others.

Customer Effort Score (CES)

CES follows a different route than the other customer satisfaction metrics on this list.

Essentially, CES asks customers, "how much effort would you have to make to get a problem solved/a service delivered/a question answered?"

The scale of the CES customer satisfaction questionnaire usually goes from 1 to 7, where 1 indicates that it was extremely easy and 7 says that it was extremely difficult. After the answers have been collected, you can calculate the average CES by subtracting the percentage of easy answers from the percentage of difficult answers.

The lower the CES, the easier it was for customers to perform a specific task.

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3. Create a survey

Surveys are a practical tool for gathering information regarding the metrics discussed above.

You can useGoogle FormsorSurvey Monkeyto create a beautiful survey in a matter of minutes. Both of these tools allow you to drag and drop different items and set up multiple choice answers are necessary.

There are also a number of pre-made templates to choose from, some of which are already based on customer satisfaction surveys.

For example, SurveyMonkey offers a Net Promoter Score template. This is what the sample customer satisfaction questionnaire for NPS looks like:

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Feel free to use the template of your choice to set up the design of your customer satisfaction survey.

Additionally, don't go overboard with the list of questions you write for your survey.SurveyMonkey's researchrevealed that respondents were likely to abandon a survey that took seven to eight minutes to complete. .

Regardless of the type of survey you plan to conduct, aim for a maximum response time of five minutes and ten questions.

4. Get the timing right

The timing of the customer satisfaction survey is key.

Ideally, it should be sent immediately after an interaction with your support team, or within 24 hours, so that the conversation remains fresh in your customers' minds.

Otherwise, they may forget how they feel.

On the other hand, surveys related to a product or service should be sent sometime after a purchase is made.

This is because it takes a while for consumers to familiarize themselves with the product or service.

While the timing varies from company to company, a good rule of thumb is to send the survey at least three days after the purchase.

Companies can also send a "product improvement survey" to their customers to understand what they want in the future.

To conduct this survey, give customers some insight into the changes you've made to your product, either online or in person, and then ask for their thoughts.

5. Analyze the data and come up with solutions

The data you collect won't be beneficial unless you can use it to extract relevant insights.

So once you get a good number of responses, look at the patterns in the data and draw conclusions.

For example, responses to a CSAT survey can help reveal bottlenecks at a particular point in timethe customer journey.

If customers show low levels of satisfaction right after purchasing a product, it may indicate that their path to conversion needs to be reworked.

Likewise, responses to a CES survey can indicate problems in your customer service.

If your customer engagement score is low, you should take steps like working to reduce response time, providing training to your customer service team, and implementing practical support channels (such as live chat on your company's website).

In addition, you can contact specific respondents directly, thank them for their feedback and apologize for the inconvenience.

The possibilities are endless when you dive deep into the data.

You don't always have to rely on survey responses to gauge how satisfied customers are with your product.

Tracking what they're saying on social media can also help you gauge what they really think about your offer.

For example, if someone says, "Polyester is a big no-no for me. I'm a sweaty person." when discussing a t-shirt you are selling, it indicates that they are unhappy with the fabric. You can now consider changing the fabric to something more summer appropriate.

Social mentionis a great tool for tracking all your brand mentions across social media platforms. You can use it to track mentions of your business or keywords associated with your offer.

How to improve customer satisfaction

While customer satisfaction is relatively easy to measure and analyze, it is much more difficult to innovate and meet the high expectations of today's customers.

So instead of pinning all your hopes on automatic birthday reminders, consider taking the following action steps to improve customer satisfaction.

1. Provide self-help resources

When it comes to building a customer service strategy, companies often tend to overlook the cheapest support channel: self-help resources in the form of FAQs, tutorials, and knowledge bases.

According to research,89 percent of consumersexpect companies to have an online self-service portal for customer support. So it can be a good idea to create materials that allow customers to become more knowledgeable and better users of a product or service.

For example, Nike offers an FAQ page to tell consumers about the differences between the many variants of the Apple Watch Nike:

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Consider building self-help resources that make it easy for consumers to find answers to their questions. This could include structured FAQs, YouTube tutorials and more.

2. Create an omnichannel experience

Adoption of aomnichannel accessis essential to entrust your customers' happiness in an incredible multi-channel landscape.

One of the best ways to do this is to use the data you have about your customers (such as their email and phone number) to give them a seamless experience across different touchpoints.

For example, a conversation that begins on Twitter can be continued via email or SMS with all the relevant context preserved across platforms.

Going omnichannel also means sharing information about customer behavior and purchase history with your sales and marketing teams.

This will help them provide tailored recommendations, such as special offers based on what customers have purchased in the past.

Also, make it clear to customers that they can reach you on any platform when they need help.

Whether it's social media, blogs, websites or mobile apps, customers shouldn't have to think twice about their choice of platform to reach you.

3. Put the customer first

Never let an issue or problem overtake your customers and their need for its importance.

If a product e.g. broke or if the service was mismanaged, don't blame the customer or say they didn't follow the instructions in the manual.

Instead, try to meet their needs and remember that the customer is always right.

For example, Taco Bell told the 6,000 residents of Bethel, Alaska, that they will open their first Taco Bell restaurant chain in the area. However, it was an elaborate prank that left people confused and disappointed.

To remedy the situation, the brand implemented a surprise-and-delight marketing tactic that lifted a truck to the location with 10,000 tacos. This was a wow moment for the residents of Bethel and proved that customers are essential to the business.

People love companies that go the extra mile in customer service. Satisfied customers will benefit you in many ways and never leave them when you consistently treat them well.

4. Reduce your waiting time

Waiting time is one of the key factors affecting customer satisfaction in the company.

When people are forced to wait too long to get something, it raises a red flag in their books. For example, if a product or service misses its delivery date, they may believe that the seller has mishandled their order.

In a society where most people want instant gratification (or at least gratification with minimum waiting time), it is important to think of ways to reduce the waiting time.

It brings us full circle to the first step, providing self-help resources that enable customers to perform some functions themselves.

You can use live chat, self-service order management software, and self-service kiosks to cut down on wait times. These solutions will allow customers to do things like view order details and track shipped orders…without having to wait for assistance.

5. Optimize your online experiences

When it comes to your online presence, use visual content to provide value to the customer.

You can do that by includingvideosthat guides customers to use their new purchase, customize the product's features and much more.

Improving your website design is another great way to improve the customer experience. Use striking images to attract people, make it convenient to see more details about a product, and follow the KISS principle (keep it simple, silly!) for the overall design.

Finally, think about real-time interactions because today's customers love them. Just having a WhatsApp chat option for inquiries can be a simple way to increase customer satisfaction. Take a cue from Adidas:

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The German sportswear brand has been using WhatsApp to interact with its UK customers in real time since 2015.

Customers can use the company's WhatsApp hotline to have a direct conversation with an Adidas representative. It's like talking to someone in the store for guidance or product advice.

Conclusion

Measuring customer satisfaction is the way forward for all companies.

With people today having so many purchasing options and substitutes, you can no longer afford to ignore the importance of providing your customers with great experiences.

Identifying key requirements along your customers' journey, gathering feedback to improve or iterate their experiences and applying trends will help you improve customer satisfaction – and subsequently generate more revenue and sales.

What steps have you taken to increase customer satisfaction? Let us know in the comments section below.

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