5 reasons customer satisfaction matters (beyond the obvious)

Groundbreaking news: Making your customers happy is important.

Yes, it’s probably the most obvious statement you’ll hear all year – but if you want to deliver a truly standout customer experience, it’s crucial to understand the ins and outs of why customer satisfaction is so important for your business strategy.

Jeff Bezos, founder, emphasizes a philosophy of customer-centric innovation and business strategy. He advocates for prioritizing customer needs over product-driven approaches, illustrating his belief that understanding and addressing customer expectations is crucial for success in business.

Customer satisfaction impacts your business in a ton of ways – and some aren’t so obvious. By paying attention to these, you put your organization in a better position to rise up and out of the crowded market, and directly into the hearts of your customers.

A focus on customer satisfaction is considered the best business strategy, as it drives loyalty, referrals, and overall business growth.

So, here are 5 ways customer satisfaction impacts your business:

What is customer satisfaction?

Customer satisfaction is a measure of how happy customers are with a product, service, or overall experience with a company. It’s a key metric that determines the success of any business. Think of it as the heartbeat of your company – when it’s strong and steady, everything else falls into place.

Customer satisfaction is influenced by various factors, including product quality, customer service, price, and overall experience. A satisfied customer is one who will continue to buy from a company, seldom shop around, refer other customers, and in general be a superstar advocate for the business. Happy customers are the ones who sing your praises, leave glowing reviews, and bring their friends along for the ride.

In essence, customer satisfaction is about creating those feel-good moments that make customers want to stick around and spread the word. It’s about making sure every interaction leaves them with a smile.

Definition of customer satisfaction

Customer satisfaction is a measure of how happy customers are with a product, service, or overall experience with an organization. It serves as a key performance indicator (KPI) that helps businesses understand their customers’ needs and preferences. Think of it as a barometer for gauging the health of your customer relationships. When customers are satisfied, they are more likely to remain loyal, make repeat purchases, and recommend your business to others.

Happy customers are the lifeblood of any successful business. They are the ones who leave glowing reviews, provide valuable feedback, and become brand advocates. Measuring customer satisfaction often involves collecting data through surveys, feedback forms, and other methods. By understanding how satisfied your customers are, you can make informed decisions to enhance their experience and foster long-term loyalty.

1. Customer satisfaction builds brand loyalty

At the heart of customer satisfaction is relationship-building. After all, brands aren’t just logos and billboards – they’re made up of people.

When your customer engagements feel like people helping people instead of “Customers” interacting with a faceless “Brand” – those are the moments that build relationships and make for more satisfied customers.

A customer's perception plays a crucial role in shaping their overall experience with a brand. Even a single interaction can significantly influence a customer's viewpoint, suggesting that businesses must strive to manage and improve this perception to ensure customer satisfaction and loyalty.

And satisfied customers are loyal customers. Customers who have deep personal relationships with your company are more likely to come back to you for repeat business. That’s especially true when your company gets things right, of course – but they’re also more forgiving when you don’t.

In their “Future of CX” report, PwC reported that 1 in 3 (32%) consumers will leave a brand after just one bad experience – and 59% of U.S. consumers will walk away after several bad experiences.

That leaves brands in a tricky position. But by building closer relationships with your customers, you can help them give you the benefit of the doubt when they have a bad experience, instead of running into the waiting arms of your competition.

Also, when customers are happier, they’re more likely to participate with your brand. Maybe you want a specific survey filled out, or maybe you want detailed feedback to share with your sales team, or a product testimonial – satisfied customers are often all too happy to return the favor. What could have been a purely transactional relationship becomes one that’s truly reciprocal.

It all starts with those bond-building moments when customers get to see that there are real, passionate (but vulnerable) people behind your brand.

One is to be open, honest and self-deprecatingly humorous about your mistakes. This could mean writing a funny 404 error page; it could be about making sincere but funny mea culpa statements through your social accounts or emails, blaming a minor error on an imaginary intern. (We’ve seen these sorts of posts go viral for companies before.)

While you certainly need to be careful about seeming flippant about your mistakes, getting this self-deprecating stuff right can be a powerful way of building human connection with your customers. Sometimes nothing says “we’re only human” like an apology. Tip: Lean into building those human-to-human connections with guided customer experience solutions (like these).

Financial benefits of satisfied customers

Satisfied customers are essential for the financial success of any business. They are more likely to return and make repeat purchases, leading to increased revenue and growth. Think of them as the gift that keeps on giving – their loyalty translates directly into your bottom line.

Satisfied customers also tend to be loyal, which means they are less likely to switch to a competitor, reducing the risk of customer churn. This loyalty is like a safety net, ensuring that your business remains steady even in turbulent times.

Additionally, satisfied customers are more likely to recommend a company to others, leading to increased word-of-mouth marketing and reduced marketing costs. According to a study, a 1% increase in customer satisfaction can lead to a 0.5% increase in revenue. That’s a pretty impressive return on investment, don’t you think?

In short, happy customers are not just good for your brand’s reputation – they’re a financial powerhouse that can drive sustainable growth.

2. Customer satisfaction drives positive online reviews and organic, customer-driven word-of-mouth referrals

Having happy customers generates the rarest kind of feedback: unprompted positive feedback. They’ve just had an experience so satisfying that they want to get chatty about it – there’s no surer sign that you’re doing something right.

Oftentimes, that happiness will manifest as real, organic word-of-mouth referrals as they tell their friends. And as we all know, those are way more compelling than incentivized referrals to the tune of “Hey, sign up with these guys and we’ll both get 10% off.”

And what if that was your business’s real goal? To have your customers tell their friends, unprompted, about a great experience they had with you? What changes would your business have to make if that was the most important outcome?

When you focus your business around customer satisfaction, you’re creating those moments they want to talk about. And especially now, when companies are competing on experiences, those moments can have a massive impact. Great customer service plays a critical role in achieving this, leading to increased customer loyalty and improved business performance.

A recent example of what above-and-beyond customer service looks like – and can do for your brand: pet food supplier Chewy recently made headlines with an amazing response to a customer’s inquiry about returning an unopened bag of dog food after her beloved pet passed away.

They refunded her, recommended she donate the food to a local shelter, and delivered her flowers and a note signed by the customer service rep she spoke to.

The customer’s (unprompted) tweet describing Chewy’s response has so far been retweeted 45 thousand times, and picked up 739 thousand likes. That’s the sort of trustworthy viral advertising that money alone can’t buy – only thoughtfulness.

Tip: Pose the question to your team – what would you do differently if creating empathetic, unforgettable, and story-telling-worthy moments for your customers was your top priority?

Measuring customer satisfaction

Measuring customer satisfaction is crucial to understanding what customers want and need. After all, you can’t improve what you don’t measure. There are various ways to measure customer satisfaction, including surveys, feedback forms, and customer reviews.

Companies can use metrics such as Net Promoter Score (NPS), Customer Satisfaction Score (CSAT), and Customer Effort Score (CES) to measure customer satisfaction. These metrics provide valuable insights into how customers perceive your brand and where you can make improvements.

It is essential to regularly collect and analyze customer feedback to identify areas for improvement and make data-driven decisions. By doing so, you can ensure that you’re always in tune with your customers’ needs and can continuously enhance their experience.

Methods for measuring customer satisfaction

There are several effective methods for measuring customer satisfaction, each providing unique insights into your customers’ experiences:

1. Surveys: Online or offline surveys are a popular way to gather feedback from customers about their experience with a product or service. These surveys can be tailored to specific touchpoints in the customer journey, providing detailed insights into what’s working and what needs improvement.

2. Feedback Forms: Feedback forms can be strategically placed at various touchpoints, such as after a purchase or a customer service interaction. These forms allow customers to share their thoughts and feelings in real-time, giving you immediate insights into their satisfaction levels.

3. Net Promoter Score (NPS): NPS is a widely used metric that measures customer loyalty by asking a simple question: “On a scale of 0-10, how likely are you to recommend our company/product/service to a friend or colleague?” This score helps you understand the overall sentiment of your customer base and identify promoters and detractors.

4. Customer Satisfaction (CSAT) Score: CSAT score measures customer satisfaction by asking customers to rate their satisfaction with a product or service on a scale of 1-5. This straightforward metric provides a quick snapshot of how well you’re meeting customer expectations.

5. Social Media Listening: Social media listening involves monitoring social media conversations about your brand or product to gauge customer sentiment and satisfaction. By analyzing these conversations, you can identify trends, address concerns, and engage with your audience in meaningful ways.

3. Happy customers increase employee satisfaction and motivation 

It’s a well-known fact that happy employees lead to happier customers. Employees who work for companies with satisfied customers are more energized, make more of an effort, and can better represent a business that cares.

But the inverse is equally important – happier customers can make for happier employees!

It can be easy for any member of your team to fall into a monotonous routine and lose touch with the impact they’re having on real people. Hearing from satisfied customers can be hugely motivating, knowing they’ve left a positive impact in their lives – even small ones.

Introducing customer satisfaction quotes can further inspire and motivate your team by highlighting the importance of their work and the positive impact they have on customers.

After all, your customer-facing team is likely made up of people who are all about helping other people; they didn’t get into customer service because they don’t like human interaction!

Helping others means something – probably a lot – to them. And they might not know just how much they’re helping people unless they’re able to connect with them person-to-person.

Think back to that Chewy story from earlier: just imagine how that employee felt seeing their personal service put in the spotlight and praised by so many people!

Using social media to open up channels of communication between your company and its customers (and even between individual employees and customers) can be risky, but can also result in a big boost in satisfaction for both your customers and your “I’m a people person” employees.

Just make sure you have guidelines for your social media managers (and, if applicable, other employees) to avoid any inappropriate interactions.

Then there are support calls, of course. On that subject …

Tip: Creating personalized interactions, like face-to-face video chats, can leave both parties feeling satisfied. Plus, customers calling with issues tend to become more pleasant and patient when they can actually see the person they’re appealing to for help – which can alleviate the stress of agents and, in turn, enable them to better help customers.

Creating a customer-centric culture

Creating a customer-centric culture is essential for delivering great customer experiences. A customer-centric culture is one that puts the customer at the heart of everything the company does. It requires a mindset shift from being product-focused to being customer-focused.

Companies can create a customer-centric culture by empowering employees to make decisions that benefit the customer, providing training on customer service, and recognizing and rewarding employees who deliver great customer experiences. It’s about creating an environment where everyone is aligned with the goal of making customers happy.

When your entire company is customer-focused, it shows in every interaction. Customers can feel the difference, and it makes them more likely to stay loyal and spread the word about your outstanding customer service.

Building a customer-centric business

Building a customer-centric business requires a deep understanding of customer needs and preferences. Here are some strategies to help you create a customer-focused organization:

1. Put the Customer at the Center of Everything: Make the customer the focal point of all business decisions and strategies. This means considering how every action, from product development to marketing, impacts the customer experience.

2. Collect and Act on Customer Feedback: Regularly gather feedback from customers and use it to make improvements to your products and services. This shows customers that you value their opinions and are committed to meeting their needs.

3. Empower Customer-Facing Employees: Give your customer-facing employees the autonomy to make decisions and take actions that will delight customers. Empowered employees are more likely to go above and beyond to provide outstanding customer service.

4. Use Data to Understand Customer Behavior: Leverage data and analytics to gain insights into customer behavior and preferences. This information can help you tailor your offerings and interactions to better meet customer needs.

5. Create a Customer-Centric Culture: Foster a culture that values customer satisfaction and encourages employees to prioritize customer needs. Recognize and reward employees who deliver exceptional customer experiences, and ensure that everyone in the organization is aligned with the goal of making customers happy.

4. Satisfied customers help your business identify areas for improvement

Satisfied customers can help you understand what it’s really like to experience your website or product.

Not only are they likely to be more willing to participate in feedback sessions, they’re more likely to give you deeper, richer feedback on your customer experience. So while they’re telling you about the parts of their customer journey that they love, they’re also more likely to elaborate on why they love it.

What’s more – and somewhat counterintuitively – satisfied customers can be a great source of insight into where your customer experience is going wrong. They’ll call out areas of your customer journey that could be improved, but aren’t obstructive enough to appear on your company’s radar in the form of complaints from dissatisfied customers.

It is also crucial to learn from your most unhappy customers, as they provide valuable insights that can significantly enhance your overall customer experience and retention.

Drawing on your most satisfied customers’ insights to shape your customer journeys is a win-win situation: your company gets a deeper understanding of how customers experience interacting with you, and they get a customer experience that’s more tailored to their desires.

Tip: Talk with your customers! A real conversation – not just the usual time-short economy of feedback (“Can you quickly fill out this form? It’ll only take two seconds.”). Having a proper dialogue with your happiest customers may not be the quickest option, but it can give you deep insight into what it’s like to be on their side of your business.

The impact of technology on customer experience

Technology has revolutionized the way companies interact with their customers. It has enabled companies to provide 24/7 customer support, personalize customer experiences, and offer omnichannel engagement. However, technology can also have a negative impact on customer experience if not used correctly.

Companies must ensure that they use technology to enhance the customer experience, not replace human interaction. According to a study, 75% of customers prefer to interact with a human customer support agent rather than a chatbot. This highlights the importance of balancing technology with the human touch.

By leveraging technology to support and enhance human interactions, companies can provide a seamless and satisfying customer experience that keeps customers coming back for more.

5. Customer happiness is the real growth fuel

There’s a prevailing sentiment (that’s often justified) that businesses don’t really care about customers. They’ll care only so far as it’ll make them more money.

But isn’t it possible for a company to genuinely care about both leaving people better off and their bottom line?

Today, many companies show how much they care about other people by making charitable donations to causes valued by their customers. Take Subaru: last year, for every new Subaru purchased or leased at more than 600 participating retailers, they donated $250 to the customer’s choice of charity.

You don’t have to run a huge advertising campaign like Subaru, of course. Putting a link on your website that will ensure a charitable organization benefits every time a customer shops with you is a powerful way of signaling that your company shares its customers’ values – a micro-moment in the customer journey that can have a big impact on customer satisfaction and loyalty.

However, while this sort of thing shows customers that your company cares about people, proving to your customers that you’re truly invested in them and earning their trust comes back to building relationships. Learning from unhappy customers can also lead to significant improvements in customer service and overall satisfaction.

It might be easier for someone to presume a company is just out for profits when they’re interacting with a faceless, monolithic brand. But when a customer is connected to a human that clearly cares and is invested in their success – that interaction doesn’t feel exploitative, it feels genuine. Ironically, companies that are able to convey that they prioritize customers over profits are positioned to have the biggest financial return in the long-term. They know the bottom line increase will come, but they’re all-in for creating meaningful relationships now.

Tip: Focus on building micro-moments into your customer journeys that humanize your company and show off its values. Encourage those at the top of your organization to get loud about prioritizing the customer instead of short-term wins.

Satisfaction starts here: the power of Guided CX

Customer satisfaction is about a lot more than how smoothly a single interaction, or series of transactions, between a customer and your company has gone.

When you satisfy customers, you’re achieving a lot more than avoiding having to deal with a complaint or pay them a refund. (Although you’re achieving that too!)

No: You’re also building customer loyalty. You’re driving positive word of mouth (and could be organically generating viral advertising). You’re making customers feel better about giving feedback and providing insights into how to improve your customer experience. You’re creating an environment in which your employees feel happier.

And, ultimately, you’re fueling your company’s growth by positively influencing how people feel about it.

Remember, there is only one boss: the customer. If they are unhappy, they can easily take their business elsewhere, which underscores the need to prioritize customer experience.

Just as there are many and multiform benefits that come with satisfying customers, there are many (often seemingly quite small) and multiform ways to satisfy them.

We’ve covered some of those ways in this blog – for more, check out our 5 step action plan for lifting customer satisfaction

Not the least of these is creating as many warm, memorable, human-to-human moments in your customer experience as possible. And that isn’t as hard as it may seem.  Our Guided CX solutions are built to make those happen. They make it easy to bridge the gap between your agents and your customers – and create the most CSAT-generating CX interactions imaginable.

Want to see what we mean? Book a quick demo here.

The future of customer satisfaction

The future of customer satisfaction is all about creating personalized and seamless experiences for customers. Here are some trends and innovations that are shaping the future of customer satisfaction:

1. Artificial Intelligence (AI): AI is being used to create personalized experiences for customers, such as chatbots and virtual assistants. These technologies can provide instant support and tailored recommendations, enhancing the overall customer experience.

2. Internet of Things (IoT): IoT is enabling the creation of seamless experiences for customers, such as smart homes and cities. Connected devices can provide real-time data and automation, making everyday tasks more convenient and efficient.

3. Augmented Reality (AR): AR is being used to create immersive experiences for customers, such as virtual try-on and product demonstrations. This technology allows customers to interact with products in a virtual environment, enhancing their shopping experience.

4. Virtual Reality (VR): VR is being used to create immersive experiences for customers, such as virtual product demonstrations and training. This technology can provide a realistic and engaging way for customers to explore products and services.

5. Customer Journey Mapping: Customer journey mapping is being used to create personalized experiences for customers by mapping their journey across multiple touchpoints. This approach helps businesses understand the customer experience from start to finish and identify opportunities for improvement.

Trends and innovations in customer satisfaction

Here are some current trends and innovations in customer satisfaction that are shaping the way businesses interact with their customers:

1. Personalization: Personalization is becoming increasingly important in customer satisfaction, with customers expecting tailored experiences and recommendations. Businesses that can deliver personalized interactions are more likely to build strong customer relationships.

2. Omnichannel Experience: Customers expect a seamless experience across multiple channels, including online, offline, and mobile. Providing a consistent and integrated experience across all touchpoints is key to meeting customer expectations.

3. Real-Time Feedback: Customers expect real-time feedback and responses to their queries and concerns. Businesses that can provide timely and accurate support are more likely to satisfy their customers.

4. Emotional Intelligence: Emotional intelligence is becoming increasingly important in customer satisfaction, with customers expecting empathy and understanding from customer service representatives. Training employees to handle interactions with emotional intelligence can lead to more positive outcomes.

5. Sustainability: Sustainability is becoming increasingly important in customer satisfaction, with customers expecting companies to prioritize sustainability and social responsibility. Businesses that demonstrate a commitment to sustainable practices are more likely to earn customer loyalty.

By staying ahead of these trends and innovations, businesses can continue to enhance their customer satisfaction and build lasting relationships with their customers.