Customer satisfaction can make or ruin your business. A company with unsatisfied customers is less likely to succeed over time. Do you know what customer satisfaction is and why it matters so much? We’ll go through some of the basics today.
What Is Customer Satisfaction?
Customer satisfaction is an indicator that shows how successfully a customer’s needs are met. Customers will be satisfied if you meet their expectations. They’ll be ecstatic if you exceed their expectations.
At times, you may fall short of customer expectations, resulting in low Customer Satisfaction rankings and disgruntled customers.
Both possibilities have the potential to have a big financial impact on your company. Here are a few Reasons Why Customer Satisfaction is Important
Customer satisfaction can have a major and long-term impact on your organization.Particularly when considering the impact of Customer Satisfaction on Customer Loyalty and retention.
- Satisfied consumers are more inclined to return and advocate for your company.
- Satisfied consumers are also more willing to leave favorable online and social media reviews and feedback for your business.
- Higher customer retention leads to higher income because it is often less expensive to keep a customer than to obtain a new one. According to research, your top 10% of clients spends three times more on every order than the other 90%!
- You can lower your acquisition expenses by getting more favorable reviews and outspoken advocates for your brands.
- Low customer satisfaction, on the other side, can lead to low customer retention, bad reviews, and a negative business image.
What Is the Best Way toMeasure Customer Satisfaction?
A Net Promoter Survey can assist you in calculating your Net Promoter Score, or NPS, which is a widely used metric for assessing customer satisfaction.
The Net Promoter Score (NPS) is a metric that determines how likely your customers are to promote your business to others based on their positive experience. On a scale of 1 to 10, customers are asked how likely they are to refer your brand to a friend or colleague.
Customers are then classified according to their responses. Promoters typically respond with a score of 9-10. Passives usually respond with a score of 7-8. Detractors respond with a 6 or a lower number.
You’ll count the number of customers in each group and then apply the following formula:
NPS = # of Promoters – # of Detractors / Total # of Responses
A high Net Promoter Score signifies that you have a significant number of satisfied customers who will happily recommend your business to others. A low score may signify low satisfaction among your customers.
