Customer satisfaction is a strategic competitive advantage
Good customer experience is a prerequisite for growth. Studies show that high customer satisfaction correlates with business growth so it’s only good business to ensure the best customer experience possible. Of course to many, satisfied customers are a value in and of themselves – and hopefully to as many as possible they really are. But it’s not often realized just how many ways customer satisfaction increases business so in this article I’ll review the significance of customer satisfaction in this particular angle.
Satisfied customers are loyal. They return over and over again and are likely to buy more. Retaining them as customers is notably less expensive and easier than acquiring new customers. Depending on industry, new customer acquisition is 5-25 times more expensive than customer retention so you really should strive to keep your customers satisfied.
Customer satisfaction spreads via word-of-mouth
Satisfied customers recommend the service they received to their friends and colleagues. Loyal customer attract new customers with their recommendations which is especially cost-efficient given the high cost of customer acquisition. According to a study, 82% of consumers asks for recommendations from their friends before making a purchasing behaviour. And unsatisfied customers repel an even bigger group of potential customers, because negative customer experiences are shared much more likely than positive ones. According to a study, over half of negative experiences were shared to over five people, compared to only a third of positive ones.
Satisfied customers share their experiences online. In the era of social media, customer experiences spread faster and wider than ever before. Customer experiences aren’t shared only to people you know but to everyone. The experiences of previous customers really do matter, since up to 71% of consumers look for information on social media and 88% of consumers on the Internet before reaching a purchasing decision. The percentages among B2B customers are similar.
Customer satisfaction increases sales
Satisfied customers increase sales. Good customer experience leads to increased sales because existing customers buy repeatedly and more, and bring new customers with them with their recommendations. Good customer experiences also boost cross-selling and upselling.
Satisfied customers and satisfied employees are connected to each other. Studies show that good employee experience correlates strongly with good customer experience. Satisfied employees provide better customer service and satisfied customers motivate employees to serve them ever better. When a company has both, satisfied customers and satisfied employees, it’s an enormous competitive advantage in the recruiting market as well, because the positive company and employer images attract the best employees to join in reaching ever better results.
Customer satisfaction pays for itself
High customer satisfaction can and should be exploited in marketing because of its great appeal to potential customers. The experiences and reviews of existing customers have such a significant impact on purchasing decisions in both B2C and B2B markets that communicating high customer satisfaction gives any company a considerable competitive advantage. Good customer experiences create also a positive employer image which makes attracting good employees much easier.
The investments made in customer experience pay themselves back manifold. A study showed that the leaders of customer experience outperform both cx laggards and S&P 500 companies in stock price growth and total returns. When the business is truly built around the customer and the mission is to provide the best possible customer experience, the company can not only meet and exceed customer expectations but also to adapt to changing customer demands quickly and flexibly.