We’ve all heard the old adage, “the customer is always right.”
While that’s not exactly true — customers make mistakes, misconceptualize ideas and misuse products all the time — the core sentiment is clear. In order to attract, retain and upsell customers, you have to keep them happy.
That’s why customer satisfaction may be the most important metric for any business to measure. If you have a satisfied customer base backed by a solid business model, then everything else will follow.
Why is Customer Satisfaction So Important?
The short answer is happy customers come back — and sometimes, they bring their friends.
Every interaction you have with a customer, from the first touch in the sales cycle to long after the initial engagement kickoff, can make a lasting impression with them about your product and brand. If each of those interactions meets or exceeds their expectations, the customer is much more likely to become an evangelist for your business.
Recently, New Breed created a new role to focus exclusively on customer satisfaction: the Customer Experience Manager. The Customer Experience Manager, working closely with the Customer Success Manager, is in charge of ensuring a consistent, personalized and successful experience for customers throughout every engagement they have with our brand.
It’s these consistent experiences that spurn customer delight and word-of-mouth referrals.
What Does Customer Satisfaction Actually Mean?
True customer satisfaction is about so much more than a positive Yelp review.
Firstly, customer satisfaction is about consistency. Customers should know what to expect from every interaction that they have with your brand. That’s not to say that customers need to interact with all the same people in the same exact way, but the guidelines and operational processes involved in those interactions should be standardized across the organization. You might, for example, create a service-level agreement with your clients that promises to respond to all correspondence within 24 hours.
When you create these consistencies in the places they matter most — particularly in times of change, as in the marketing to sales or sales to services handoff — you create a calm, easy and familiar experience for your customers as they continue to cycle through the flywheel.
The foundation for this consistency comes from having a unified, centralized understanding of your customers across marketing, sales and services teams. This understanding can be achieved through the use of buyer personas, as well as internal, cross-channel communication. Buyer personas tell you generally who your customers are, what they need and how they like to communicate, whereas internal communication between teams will help you keep everyone up to speed on the nuances of individual clients.
For example, when salespeople have a good, in-depth understanding of how your product or service works and the way that customers can expect to interact with that product or service, they can do a better job of setting the right expectations before the sale. These sales enablement pieces are critical for selling the right way to the right people.
Which Tools Can Help You Improve Customer Satisfaction?
During the handoff from the high-touch sales process to the engagement kickoff, you should have the operational pieces in place to transfer that knowledge gained during the sales process to the people who will be working on the account.
Our Customer Success Manager oversees some of this handoff manually by documenting relevant customer information and ensuring it reaches the rest of the team, but there are a number of tools you can use to make this process a little bit more automated, including:
A knowledge base, self-service hub or FAQ page to enable customers to answer their own questions without the need to contact your team.
A customer forum where customers can collaborate together on extracting more value from your product or service.
A single customer view for your internal team. HubSpot’s contact record, for example, allows you to integrate all customer communication into one feed. Any team member who’s working with that customer can view who’s already interacted with them, how they interacted with them and the outcome of those interactions.
An easy-to-use project management tool to oversee engagements and provide a single source for plans, updates, reports and other information.
An easy-to-use customer feedback tool to gather feedback from customers and use that feedback to inform and improve your customer service strategy.
Offering customers several flexible channels for easily reaching your team is critical. Even if you don’t have a 24/7 service offering, providing customers with a few convenient, flexible and personalized options is critical.
How Do You Measure Customer Satisfaction?
Satisfaction can be a little tricky to measure, but there are a few solid metrics you can focus on to quantify it:
Net promoter score (NPS)
The NPS survey is a standardized, industry-agnostic survey that businesses regularly send out to their customers, and it’s the closest you can get to truly and accurately measuring customer satisfaction.
When customers are delighted enough with your brand that they’d recommend it to a friend, that’s when you know that you’ve delivered an exceptional customer experience. If customers are neutral or unhappy with your brand, the NPS will alert you that you need to take action to re-engage those customers and make the experience stand out more for them.
It’s cheaper to retain than acquire, but if you can do both at the same time, that’s the goal.
Churn vs. retention rates
Obviously, if you’re struggling to retain customers, that’s a major warning sign that you aren’t delivering a consistent, satisfactory experience to your customers.
Some people make the mistake of thinking that as long as you’re acquiring your customers, you’re growing your revenue. That’s wrong. It’s much more difficult and expensive to acquire new customers than it is to retain existing customers. If you can do both at the same time, that’s ideal — but ultimately, before you work on business acquisition, you need to nail down the experience you’re offering to your existing customers.
Customer lifetime value (CLV)
CLV is the amount of value your customer adds to your business over the entire length of their customer lifecycle. The longer you retain an account, the higher their lifetime value.
You need to consider a number of factors when calculating CLV, including deal size, purchasing frequency, customer lifetime span and more. Regardless, happy customers are likely to buy more at your company. If your CLV is very low, that’s a sign that you need to drop everything and focus on improving customer satisfaction.
Customer acquisition cost (CAC)
CAC is the cost associated with all of the activities required to market and sell to a customer, including marketing expenses, overhead costs and more.
If your CAC is higher than your average CLV, your business is losing money. When you retain and upsell customers, you reduce your average CAC and, in turn, increase your business’s overall revenue gains.
Word-of-Mouth referrals are the icing on the customer satisfaction cake: When customers become some of your best spokespeople, new business will come to you without much time, effort and money spent on your end.
Unfortunately, word-of-mouth marketing is difficult to measure quantitatively, but you can gain an idea of how much word-of-mouth marketing is bringing in new customers by analyzing your NPS score, asking for customer feedback and setting up partner referral programs to track leads that come from outside sources.
Who’s in Charge of Customer Satisfaction?
Ultimately, customer satisfaction is everybody’s job. Any employee who interacts with your customers needs to have customer delight at the forefront of everything they do.
But often, it’s difficult to ensure consistency across the organization without someone dedicated to overseeing the customer experience. Your employees need to have access to the resources they need to deliver on the experience you’ve promised, so defining and enforcing those standards for your service delivery is invaluable.
No matter how you choose to approach customer satisfaction, you need to approach it, period. Customer sentiment can make or break your business, so having defined, visible guidelines for streamlining customer interactions across the organization is key.
Karin is Content Lead at New Breed. She specializes in developing content strategy and copy at every point in the creation process, from persona design to final edits