Why is customer satisfaction so important?
It’s much easier to forget about a customer as soon as they leave your store or click away from your website. So why should we take the time to follow up with our customers and focus on their satisfaction levels? Here are some of the key reasons why measuring customer satisfaction and striving to improve it are so important.
Maximise customer lifetime value
Many businesses underestimatethe cost of acquiring a new customer. It is much more cost-effective to invest in retaining existing customers rather than constantly chasing new ones. If you focus on customer satisfaction, then those that buy from you are much more likely to buy from you again.
This increases the lifetime value of that customer, i.e. the amount they spend with you over their entire lifetime. When customers keep coming back to buy from you, your return on investment from theircustomer acquisitioncost increases. The bottom line is: satisfied customers are more loyal and loyal customers are more profitable for your business.
Minimise customer churn
Customer churnrefers to those customers that stop buying from you, whether that’s after their first purchase or after several years of being a loyal customer. Customer churn can be very costly for your business because it means you need to go back to focusing on getting new customers. As mentioned above, a satisfied customer is more likely to remain loyal, therefore decreasing customer churn.
Positive brand exposure
Word of mouth is important to any business. Disgruntled customers will go online and complain about your business or its products, they’ll write negative reviews, and they’ll recommend your competitors over you. By improving your customer satisfaction, you not only avoid this, but you also benefit from positive word of mouth. Satisfied customers will recommend you to friends and family, talk positively about you online, and, hopefully, writepositive reviewson places like Google, Facebook, and Yelp.
Increase revenue
All businesses want to increase their revenue and grow their business, but they might not always have the resources to invest in actively growing it. Once you’ve got your customer satisfaction strategy right, it becomes an effective way to grow your business and its revenue passively.
While you focus on improving other areas of your business, satisfied customers keep coming back to buy from you and they keep recommending you to their peers or writing positive reviews online. This keeps a steady and, hopefully, increasing revenue stream coming in without you having to constantly work on it. Of course, customer satisfaction is something you should review on a regular basis to ensure you’re still hitting the nail on the head.
