Although customer satisfaction is a measure that helps us understand how a company’s products or services meet or exceed consumer expectations, it is essential that we all appreciate the importance of customer satisfaction and recognize how how it helps us manage and improve our business.
While there are hundreds of strategies to improve customer satisfaction, they are not always applied. However, a satisfied customer is a customer who returns and who passively contributes to the increase in revenue and profits of a company without budgetary expenditure to acquire new customers.
Every company or work team asks questions about the benefit of a satisfied customer and how to recognize if a customer is really satisfied with the service?
For this reason, in the following lines we have decided to answer these questions and define the key aspects to achieve it.
The Benefits of Generating Customer Satisfaction
To achieve profitability and positioning, it is important not to target only the brand of actions aimed directly at attracting new customers.
The viability and profits of a brand or a business also depend on building a solid relationship with already won over customers.
In addition to contributing to profitability and the life of the business itself, generating satisfied customers offers multiple specific benefits for marketing, brand exposure, sales management and even decision-making.
A few things to think about:
- it is an indicator of whether a consumer will make another purchase;
- it is an element that differentiates you from the competition;
- helps you reduce churn (customers stop doing business with a company over a given period of time);
- it helps you increase positive word of mouth referrals and generate more customers;
helps you retain your customers.
The role of logistics in customer satisfaction
Economists have long recognized that logistics is part of a fundamental knowledge that allows companies to meet the real needs of their customers, this is particularly the case with the use of CRM software, specialized in customer relationship management. .
The way to create a model of sustainable growth, revenue over time and to develop competitive advantages that allow you to retain and increase the volume of your customers.
Generally speaking, one of the main purposes of price monitoring is to create an appropriate pricing strategy for your business. This means being able to set prices that adapt to the real market situation and that are sufficiently competitive among your competitors’ products.
Successful companies seek to implement strategies to reduce costs and thereby increase customer satisfaction:
- productive improvements: can only be achieved if learning is encouraged among workers;
- automation: technology replaces labour;
- global operations: the total price of products produced in industries is reduced by the advancement of technology used in logistics operations;
- outsourcing: in the competitive world, companies must focus on what they do best.
The Importance of quality
Quality is above all at the service of the company’s performance and constitutes one of its main conditions. It makes it possible to optimize the means and resources available with the aim of improving the organization and its efficiency, in particular by facilitating the circulation of information.
According to Professor David Garvin, customers use eight factors to define quality:
- performance of a product;
- characteristic that distinguishes a product;
- product credibility;
- product conformity;
- product life cycle;
- after sales service ;
- the aesthetic appearance of the product;
- perceived quality.
Quality would be the most important reason for a purchase decision, much more decisive than price.
Delivery service management
It encompasses the management of various resources, including: a fleet of vehicles dedicated to journeys between the company and the end customer or partner distributors; a team of couriers or drivers; tools for planning and scheduling routes.
Your ability to deliver is one of the most important sources of differentiation in the industry. One-off operations are seen as added value, not only for customers, but also for logistics managers.
How do you know if the customer is satisfied?
Fortunately, the Web and digital marketing have provided us with several indicators to measure satisfaction levels!
The Net Promoter Score (NPS)
The NPS is based on a simple question: on a scale of 0 to 10, how likely are you to recommend our products/services to a friend?
The average score your customers give you is the NPS and, of course, the higher it is, the more satisfied they are.
You can use this method for 1-5, 5-10, or Likert (1-7) scales.
The objective is to segment the responses into 3 distinct categories. Say you used the 1 to 10 scale method:
Low effort: customer who gave a rating of 1 to 3
Moderate Effort: Customer rated 4-7
High Effort: Customer rated 8-10
CES = [% high effort] – [% low effort]
The result obtained is then positioned between -100 (minimum effort level) and +100 (maximum effort level).
For example, let’s say that 400 customers answered the satisfaction questionnaire. 250 customers gave an effort rating between 1 and 3 (62.5%) and 150 customers gave a rating between 8 and 10 (37.5%). With the calculation, the CES score will be 25%.
Comments and brand mentions
Monitor your brand valuation on sites and forums via customer review reviews, like Capterra and TripAdvisor, as well as any portal where you can gather your consumer perception.
It is a metric which, in turn, can be measured by other metrics. In general, it refers to the level of customer engagement, which gives an indication of their satisfaction and appreciation.
One of the ways to assess customer engagement is to calculate the response rate of messages and communications sent to customers through the various networks.
If the vast majority have responded and are ready to interact at any time, these are great signals! Now you understand the importance of generating satisfied customers and what are the key actions in customer management to achieve this. So remember, it is always cheaper to retain a customer than to win a new one.
CES [Customer Effort Score] which is used to obtain customer feedback on their user experience.
The CES (Customer Effort Score) is a fairly recent performance indicator, which appeared in 2010 in the Harvard Business Review. It measures the ease (for a customer) of getting in touch with a company, for example to solve a problem.
If a customer has difficulty reaching customer service, their level of satisfaction will be affected. As a result, he risks disengaging, turning into a detractor and turning to the competition. So, to avoid this vicious circle, the company has every interest in guaranteeing an “effortless” experience.
The “Average of marks” method
This method is the simplest to measure the CES. The objective is to obtain an average score (out of 10), by adding up all the scores received and dividing by the number of responses obtained.
The calculation is as follows:
CES = [Sum of all scores obtained] / [Number of scores]
If 100 people answered the satisfaction questionnaire and the total sum of the scores is 400, then the CES score will be 4 out of 10.
The Net Easy Score
Here, we measure the degree of ease with which the customer was able to interact with the brand. Despite this small nuance, the Net Easy Score still measures the notion of customer effort. The idea is the same but the logic is reversed.
The Net Easy Score method
This type of calculation can be used when the question is based on a notion of ease. For example: “How easy was it for you to contact our customer service?”
Once again, it is necessary to divide the answers obtained into 3 categories. Let’s say you used a method from 1 to 7, ranging from:
Easy: score from 1 to 2
Neutral: rating from 3 to 4
Difficult: score from 5 to 7
CES = [% Easy] – [% Difficult]
Customer Effort Score Net Easy Score method
For example, let’s say that 100 customers answered the questionnaire. If 70% of customers found interacting with your customer service easy, but 30% found it difficult… Your CES score will be 40%.
Whatever formula you choose, remember:
The lower the level of effort, the more the customer is satisfied (and he can be loyal).
The higher the level of effort, the less satisfied the customer is (and may disengage). In this case, solutions such as the deployment of self-care tools can be considered, to improve the customer experience.