Maintaining a high level of customer satisfaction is essential when running a business. Defined as the measurement of how well a business’s goods or services meet or exceed customers’ expectations, it plays an important role in a business’s success. So, how exactly can customer satisfaction affect your business, and what steps can you take to keep customers satisfied?
#1) Online Reviews
According to the Pew Research Center, roughly half of all U.S. adults regularly look at online reviews before buying new products from a business. Reviews offer an honest, unbiased look at a business’s products or services. Consumers often use them to determine whether a product or service is worth buying. If your business’s customers aren’t satisfied, however, they may leave a negative review. On the other hand, keeping your customers satisfied increases the chance of a positive review.
#2) Customer Lifetime Value
In addition to online reviews, customer satisfaction also influences customer lifetime value (CLV). According to a study conducted by InfoQuest, totally satisfied customers have a 14,000 percent higher CLV than dissatisfied customers. If a customer isn’t happy with your business, he or she may choose a competitor instead. Therefore, you should seek to improve your business’s level of customer satisfaction to generate more sales.
#3) Customer Retention
Customer satisfaction and retention rates go hand in hand. When customers are satisfied with your business, they are more likely to return and make additional purchases in the future. This satisfaction is important because studies show that selling to existing customers costs up to 25 times less than acquiring new customers. You’ll spend less money and generate a higher return on investment (ROI) by selling to satisfied, existing customers instead of new customers.
You’ll probably find that satisfied customers are easier to manage than their less-satisfied counterparts. Dissatisfied customers may contact you to request a refund or issue a chargeback with their credit card company. Either way, it forces you to consume valuable time and resources. Time you can use for other purposes (i.e. Promoting your business or launching a new product). Thankfully, this isn’t an issue with satisfied customers. The only time when a completely satisfied customer will contact you is to praise your business or its products or services.
#5) Brand Recognition
How do you want customers to recognize and remember your business’s brand? If your company suffers from a low level of customer satisfaction, they’ll have a negative perception towards your brand. And when this happens, it’s often difficult to restore your brand’s image. You can promote a positive brand image, however, by keeping customers satisfied and happy.
How to Increase Customer Satisfaction
From promoting positive online reviews to increasing customer retention rates, CLV and more, maintaining a high level of customer satisfaction can benefit your business in several ways. To improve customer satisfaction, you must first look at your business’s communications with customers. For example, review emails or online chats between employees and customers. This is a great way to ensure your customers feel appreciated and are being treated with the utmost respect.
Responding more quickly to customers’ inquiries can also increase their level of satisfaction with your business. A study cited by Angie’s List found that nearly half of customers expect a business to respond to their inquiry within 24 hours. If you leave emails sitting unread in your inbox for several days, you’ll struggle to keep customers satisfied.
These are just a few tips to improve your business’s customer satisfaction. Most importantly, you should survey each customer who purchases a product or service to gauge their level of satisfaction. Know exactly how many customers are satisfied and how many are dissatisfied.
At P4 Sales Consultants, we have an in-depth understanding of what makes a brand appealing to others. While having an excellent product or service and professional branding is important, your brand name is also affected by what others say about it online. Contact us at 888.904.2168 to learn more about our reputation management solutions.