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Customer satisfaction: what is it and why is it important?

More than ever, customer satisfaction has become a key driver as it can truly make or break businesses. Why is that, you're asking? 

In this blogpost, we're covering the following questions you may have about customer satisfaction:

  • What does customer satisfaction really mean?
  • Why is achieving high customer satisfaction so important?
  • How do you improve your customers' satisfaction?

So what exactly is customer satisfaction?

Customer satisfaction measures how and in which way your products or services meet customer expectations. Not only that, it is also a key metric for measuring a customer’s intent to purchase and customer loyalty.

In recent years, customer satisfaction has become increasingly important. In the past, unsatisfied customers would only express their dissatisfaction to their neighbors. Nowadays, that same customer can go online and share those complaints on social media. Before you know it, that complaint will have made thousands of bad impressions on other people.

Why is achieving a high customer satisfaction so important?

If you are still not convinced of the significance of customer satisfaction, then we will take it one step further. Here’s 3 reasons why you should improve your customer satisfaction, starting today.

1. Retaining a customer is cheaper than attracting a new one

Attracting a new customer is about 7 times as expensive as retaining an existing one. This is especially true for business that tend to commit to long-term relationships with their customers, such as: insurance and media companies, banks, etc.

These types of businesses greatly benefit from maintaining a high customer satisfaction as their revenue is directly linked to a high Customer Lifetime Value: the total revenue per customer over a customer’s lifetime.

2. A satisfied customer is almost always worth two

Satisfied customers tend to share their positive experiences with others, resulting in free word-of-mouth advertising for your company. In 2021, customers no longer share their opinion offline, but via social media where their reviews reach a much wider audience.

3. Satisfied customers spend more money on you

Are you active in a sector that prioritizes cross- and upselling? Then a high customer satisfaction will be twice as beneficial. After all, satisfied customers will be less shy about spending money on you.

They will be more inclined to take up your media promotions, they will be more willing to pick up extra clauses with insurance companies or they will buy various financial products from the same bank.

So how do you increase your customer satisfaction?

Want to start improving your customer satisfaction? Great! There are countless ways to achieve your goal, such as:

  • Improving communication with customers
  • Offering exceptional customer service
  • Ensuring that every interaction with your company goes as smoothly and pleasantly as possible
  • Optimizing your products and services
  • Improving the accessibility of your location
  • Etc.

However, keep in mind that the key driver for a high customer satisfaction is different for every sector and business. As every business is built differently, it is important to work on and measure your customer satisfaction.

  1. Track customer feedback and try to gather as many actionable insights as possible to better understand those key drivers.
  2. Identify friction in the customer journey.
  3. Improve the 3 P’s (‘People, Process and Product’) and aim for more customer loyalty!