Customer Satisfaction: Benefits & Advantages for Business
In this new century of business where customer satisfaction is one of vital points of success. Knowing the importance of customer factors, always known through methods like CSAT (Customer Satisfaction), is an important factor for companies who are after competition in the global market.
Customer satisfaction (CSAT) score is a scoring system used to measure and assess how satisfied your customers are with the goods, services, or needs or wants that a business offers. How fulfilled one’s customers feel from interacting with a company's goods, services, or overall brand experience is referred to as customer satisfaction. Typically, customers will be asked to assess their satisfaction on a 1-5 or 1-10 scale where one is "very dissatisfied" and the highest number is "very satisfied."
This article tells us more about CSAT and CSAT score, followed by various advantages of improved customer satisfaction such as positive brand reputation, decreased customer churn, positive word-of-mouth, sales revenue growth, and improved customer loyalty. Let us dive in.
Positive Brand Reputation
The first benefit that comes as a result of improved customer satisfaction is a positive brand reputation, which lets us be aware of how consumers recommend a specific brand on how what the brand produced and how it can serve the customer efficiently.
It is such a crucial factor that determines a customer's behavior and lets us identify the positive result of a company. With the modernization of social media platforms and the internet, the reputation of a brand has been studied and has been very important in every business approach.
In a nutshell, brand reputation is the insight people have of a particular brand and is produced as a result of various factors. It is an opinion people have about a particular product or services that a brand offers.
A positive brand reputation can be a major factor in driving business growth, while a negative brand reputation can be of bad influence to a company’s growth and profitability.
Decreased Customer Churn
The second benefit of an improved customer satisfaction is the decreased customer churn, which is the rate at which consumers stop the use of the services of a company or brand.
It is an important concern for business across various industrial sectors including e-commerce, software, tourism, hospitality, B2B services, etc., as decreased customer churn can greatly affect a company's growth and profitability.
How to calculate churn rate?
Let’s say, a café has 20,000 customers each year. However, the café lost about 2,000 customers last year. Therefore, the annual churn rate for this café is 2,000 / 20,000 * 100% = 10%
Positive Word-of-Mouth
Positive word-of-mouth comes as the third benefit of an improved customer satisfaction in a business or company. Word-of-mouth happens when customer shares information about a business, a product or a company to other people, friends and relatives and encouraging them to keep doing business with the business or to stay away from the business.
In a highly internet connected world, word-of-mouth usually comes in the form of online reviews, or testimonial which can be seen and read by a lot of people through any means of channels such as social media, google reviews, Facebook reviews, etc.
How effective is word-of-mouth?
Word-of-mouth is not just effective in B2C (consumer) marketing, but also in B2B (business-to-business) marketing. In fact, B2B buyers are even more likely to rely on recommendations from peers and colleagues. According to a study by Demand Gen Report, it was noted that 97% of B2B buyers say that user-generated content, such as peer reviews and user forums, are more trusted than other types of content.
Better Sales Revenue Growth
Another positive impact of an improved customer satisfaction is a better sales revenue growth of a business. There are big chances of business success and advertising when customers are happy with a brand. Sales will increase as a result which is beneficial to the company because repeated customers will spend more on purchases than expected.
How is Sales Revenue Increased?
A brand can increase its sales by contacting more customers, convincing them to purchase more often, revamping its marketing approach, offering prizes that meet market standard and ensuring mutual relationship with customers always.
What is the Purpose of Revenue Growth?
Growth of a revenue gives financial stability to a business, which can then be used to fund research, development and innovation to improve its services to the customers.
A recent study confirmed that companies with a customer experience mindset drive revenue 4-8% higher than the rest of their industries
Improved Customer loyalty
Last but not least, customer loyalty also comes as a result of improved customer satisfaction, which in turn allows a business to develop an ongoing and mutual relationship with its customers.
And of course, improved customer loyalty increases the customer's willingness to be involved with the business and continually purchase from the business than its competitors.
Conclusion
Customer satisfaction is not only important in a business, it is the foundation of a business.
By prioritizing customer satisfaction, a business can get various advantages such as positive brand reputation, decreased customer churn, positive word-of-mouth, better sales revenue growth and of course, improved customer loyalty.
Customer satisfaction is measured with a CSAT score, and the easiest tool to monitor customer satisfaction is by using Retentable customer feedback tool, which monitors and ensures customer happiness over time.
