Why Customer Satisfaction Should Be Your New Metric
Discover how an effective Customer Relationship Management (CRM) system can enable your business to measure customer satisfaction in order to boost sales and increase customer loyalty.
Customer satisfaction has become an increasingly important metric. Happy customers are more loyal and therefore more likely to invest more in your products or services. Whereas dissatisfied customers can cause brand damage, customer churn and lose you opportunities to earn more revenue. Furthermore, Gallup Organization has long recognised the correlation between happy employees and contented customers. Whatever your Sales staff do, or how your Customer Service Agents and other customer-facing staff react whenever they are dealing with customer queries or engaging with prospects will have an impact on your business.
That’s why it’s important to put in place the right organisational culture, people, processes, and metrics; as well as the most appropriate means of analysing customer data with the help of an effective Customer Relationship Management (CRM) system.
‘The Ultimate Guide to Measuring Customer Satisfaction’ by Gregori Ciotti, adds that customer satisfaction can also help organisations to improve how they support their customers as well as informing their product and service development.
“A satisfied customer is one who will continue to buy from you, seldom shop around, refer other customers and in general be a superstar advocate for your business”, Ciotti states. The problem is that it’s hard to measure customer satisfaction. He rightly asks: “What should be measuring?” Indeed, what are the key performance indicators that can help you to define whether one customer is satisfied while another one needs more support?
Ciotti recommends author Prof. Scott Smith’s methodology, which considers the fundamental measurements of:
- Perceived quality: This looks at whether customers felt that product or service fulfilled their needs, wants and desires in a way that met their expectations.
- Customer loyalty: Customer loyalty can be measured using the Net Promoter Score (NPS) and Net Promoter Value (NPV). An unsatisfied customer is unlikely to make referrals, and so it’s reasonably accurate (but, for example, customer loyalty can’t simply be based on how long a customer has remained with a particular bank. Sometimes customers just prefer the devil they know, and so more qualitative research is often required to support quantitative metrics such as NPS, NPV, the number of years a customer has been ‘loyal’, ROI, etc.).
- Attributional satisfaction: What feature did the customer like about a product or service? Conversely customers can be asked what they didn’t like, and about what could be improved to increase their levels of satisfaction. Satisfaction can lead to attitudinal loyalty, but while customers may be positive about your products and features, they may not necessarily translate to future sales. Effective use of CRM will take develop their attitudinal loyalty to behavioral loyalty, leading customers to a desired action, thus increasing your sales.
- A customer’s intention to make new and ongoing purchases: A happy customer will in most cases tend to return to buy products from you time and time again, and yet there are exceptions to this rule. Customers will, to a certain extent, forgive organisations for a few minor misdemeanours and so they may continue to purchase from them. While some may not have an option to buy the same kind of product or service from elsewhere. Yet in both cases your goal should be to fulfil their needs and meet their expectations.
Chief Marketing Officers (CMOs) can train their customer-facing staff to ask short and simple questions each time they interact with customers and then record and collate this kind of data in their CRM system. CMOs can then use data insight tools to form a single view of each customer. This analysis can then be used to inform Customer Service Agents and Sales about what interests each customer, their purchase history, any issues that have arisen and so on.
The CRM system’s data analysis would most probably also use some or all of the above metrics to form a complete picture of the value of each customer to the organisation. It enables CMOs to segment each customer according to buying habits, needs, demographics, value to the business, and other insightful variables in order to improve customer satisfaction, customer loyalty and profitability. To achieve this, use CRM to know your customer.
Learn more about using CRM systems to make customer satisfaction the soul of your business by downloading this guide: 'The Ultimate Guide to: Creating customer centricity with CRM'
This post first appeared on the Redspire CRM blog