The importance of customer satisfaction (+ stats to prove it)
The importance of customer satisfaction cannot be overstated. There is a direct correlation between how happy customers are and how much money a business makes. Your customer satisfaction score (CSAT) affects repeat purchases rates and customer loyalty, word of mouth referrals, and helps to inform business decisions.
According to this study by InfoQuest, the repeat purchase rate of “totally satisfied” customers is 3 to 10 times higher than that of “somewhat satisfied” customers. Knowing your customer service ratings provides a far greater chance of understanding what your potential revenue will be.
In this article, we’ll take a closer look at what customer satisfaction is and why it’s crucial to strive for positive customer satisfaction results.
What is customer satisfaction?
Customer satisfaction is how happy your customers are with your company, product or services, and the assistance they receive before and after making a purchase. It’s also a way for your customer service team to ensure their actions are producing consistent results of happy customers.
Your customers’ satisfaction levels are typically found by asking the question on the phone or sending a survey afterwards. You’ll need to identify and communicate if those ratings will be stars, numbers, smiley faces, or something else so everyone (internal and external) understands the measurements.
8 reasons why customer satisfaction is important
We know you understand the importance of customer satisfaction. But in case you’re on the fence about whether it’s the most important customer service metric, let’s look at some of the benefits of positive customer satisfaction.
1. Reduces customer churn
In today’s capitalistic world, there are always new and existing competitors to be aware of. This is important because your customers will always have somewhere else to buy similar products or services. According to these customer retention statistics, 66% of B2B customers stopped buying after a bad customer service experience and 52% of B2C customers did the same.
Ensuring your customer service team is going above and beyond the competition to keep CSAT scores up is crucial to reducing customer churn.
Retaining customers is a vital piece of the customer service puzzle. By doing everything in their power to help customers, your team will produce numbers that help the company stay competitive while also boosting customer loyalty and repeat business.
2. Boosts customer loyalty and recurring revenue
Existing customers spend an average of 31% more and are 50% more likely to try new products compared to new customers. Higher customer loyalty is also an indicator of customer satisfaction levels. Happy customers will continue to make repeat purchases (or keep their subscriptions), ultimately boosting your bottom line.
Consider this example:
Your business sells software with a monthly subscription. Each subscription costs $10/month and there are currently 100 customers. Through your surveys, you learn that 90% of them are happy this month so you’re at risk of losing 10 customers and $100 next month. Now multiply that by 12 months and you’ve lost $1200 over a year.
Next month you find that only 70% of customers are satisfied. You’re now at risk of losing 30% of your revenue or $300 next month and $3600 over a year. The lower your customer satisfaction rate, the more your bottom line suffers — especially when you’re at a higher pricing tier.
Customer satisfaction is one of the top ways you can measure potential repeat purchases and loss risks. When customers are satisfied with your products or services, they stick around and spend more.
Increasing customer loyalty and retention by only 5% can result in growing profits from 25-95%, and it can help cut down on customer acquisition costs (CAC). In fact, acquiring a new customer can cost five times more than keeping an existing customer.
3. Improves efficiency and productivity
Evaluating your CSAT and other customer service KPIs will help you determine where your agents can improve to make customers happier. Satisfied customers mean you’ll spend less time fixing problems and more time getting work done.
For example, if your agent’s resolve rate has decreased, you may discover they need more training to resolve tickets faster.
The information you learn from these numbers can help you make processes more efficient, thus improving agents’ productivity. It can be as easy as asking your agents what they find most difficult, tedious, or what causes bottlenecks in the process to guide you to fixes that ultimately improve your CSAT scores and overall revenue.
4. Increases employee satisfaction
When your team is happy, they’re much more likely to provide great customer service than when they’re frustrated. Learning and implementing what your agents need to be more productive makes the entire process smoother for everyone involved.
Removing any barriers to your agents’ tasks creates a better flow of work and a more clear way for you as a leader to identify what’s working and what’s not. This ultimately leads to a better CSAT score when your agents can resolve issues quickly.
It also boosts morale in your team. Especially when 55% of customer service agents in a recent survey say that a supportive work environment is the most important thing they need to do their job well.
Another morale-booster is rewarding your employees for improving CSAT scores. By creating an environment where they are accomplishing set goals, agents will feel happy and engaged. This will help improve employee satisfaction, productivity, and retention.
5. Encourages brand advocacy
Customer satisfaction and loyalty are important for brand advocacy. Whether you want them to or not, customers talk about their experiences with your company. But unhappy customers tell 15 people on average about their bad experience. Extrapolate that by your number of customers and that’s a lot of bad press.
Conversely, Salesforce found that 72% of satisfied customers share their positive experiences with others and 92% of consumers trust recommendations from people they know. Improving your CSAT scores means your happy customers will talk about their good experiences with their friends and family, ultimately leading to more business for your company.
6. Helps you stand out from the competition
In some cases, it can be extremely difficult for customers who are trying to get help to find the right person or to get a hold of a human at all. This frustration for customers creates a very poor experience and a decrease in customer satisfaction and loyalty. That’s why positive CSAT scores are important to stay competitive.
Being more accessible to your customers is an excellent way to create benefits for your customers as well as your company. While other companies are difficult to reach, you can be the standout by offering an omnichannel customer service experience. For example, having a live chat option, being responsive on social media, and/or a human simply to answer the phones.
Create a culture around having great customer service and satisfaction by training agents to ask customers if they need anything else. You could also create automated customer service email templates to improve your CSAT. For example, you could send an automated email confirmation to customers who open a help ticket letting them know how soon they can expect to hear back. The little things add up to a great overall customer experience and positive customer satisfaction.
7. Provides upselling and cross-selling opportunities
Think back to the last time you made a purchase and it was exactly what you needed. Were satisfied with the customer service experience. Did you return to that company for another item? It’s likely you did because that’s what 60-70% of happy customers do.
Positive customer satisfaction leads people to return to your company for another purchase. This provides salespeople with more opportunities to cross-sell complementary products or upgraded services to increase sales revenue. The customer will be more likely to buy because they’re already happy with the product and customer service.
8. Benefits other departments
Your agents are the front line for your current customers. They are the people who speak to customers — happy or not — to identify their needs. You have the ability to take the feedback you receive from these customers and share it with other departments.
For example, if you work together with the marketing department, you can help them better understand the pain points of the customers to inform marketing campaigns. This way they can create marketing messaging that explains how your product or service solves potential or existing customers’ problems. You can also tell the sales team what people tend to complain about after they’ve purchased so they can preemptively reduce buyer’s remorse.
Using tools can help a great deal with cross-team communications and could raise overall productivity by 25%. Better communication allows everyone to understand expectations, receive information quickly, and react to the insights faster.
Having a cohesive cross-department communication flow will allow for a holistic picture of the customer experience. Then you can see where the process needs improvement to create a better end result and more satisfied customers.
Customer satisfaction is key to your success
Creating an environment where your customers and agents are happy 100% of the time is impossible. But now that you understand the importance of customer satisfaction, you can tackle setting and achieving goals for this essential customer service metric, while also making sure your customers and agents feel appreciated and understood.
Kaizo helps customer service teams boost their efficiency, productivity, and quality to provide a better overall customer experience. Customer Support Team Leads can use the tool to measure and, eventually, manage customer satisfaction rates and prevent customer churn. Book a demo to see how you can increase your CSAT today!