In this episode of Actionable Marketing In Minutes we chat with Bobbi Parke about the benefits of a satisfied customer.
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Did you know the average business loses up to 40-percent of their customers each year? Though you’re probably aware that you are experiencing a certain level of churn, I’ll bet you’re pretty shocked at that high number.
A few years ago, The Griffin Group conducted a customer loss survey and reported these startling statistics:
* 46% of marketing and sales executives do not know how many customers they lose each year;
* 77% of firms do not know how many lost customers they successfully win back each year.
Even if you’re one who is distinctly aware of your grim data regarding lost customers, do you consider it just part of doing business and simply let those customers go – doubling down on other aspects of your marketing strategy, such as trying to figure out how to get new business?
That approach could be a costly mistake. One simple and yet profound customer retention solution is to take customer satisfaction very seriously. Customer satisfaction is the degree to which a buyer is happy with your product, service or your company. And, it should be the goal of every business to maintain and to continually increase customer satisfaction.
Today, Bobbi Parke, a Local Directive contributing writer, is here to speak to us about customer satisfaction. Thanks for joining us, Bobbi.
Good to be here, Lisa.
Please tell us: what constitutes customer satisfaction?
We can break down customer satisfaction into two distinct areas: that of the product or service and that of the process.
1. Did the product meet or exceed expectations?
2. Was the process as simple as it could be? How was the customer service experience? Or, post-purchase warranty interactions?
Why is customer satisfaction so important to business success?
* Though there are quite a few benefits of customer satisfaction, I think one of the most significant is it is more cost-effective to retain current customers than it is to get new ones.
* Customers are better apt to accept price increases if they are satisfied.
* It reduces customer churn – that is, the rate at which your customers are leaving.
* It sets you apart from your competition.
* It increases customer loyalty, which in turn increases both repurchase intentions and recommendations.
* It increases customer lifetime value.
Please explain what customer lifetime value is.
Lifetime value – or LTV – is the projected revenue a customer will generate during their lifetime.
How difficult is it to measure the level of customer satisfaction?
It can be as simple or as complicated as we make it. Our ultimate goal is to understand why our customers do what they do. Then, we can create programs or campaigns to meet their needs. A few methods are:
2. Feedback boxes on your website.
3. Reach out directly and ask them.
4. Monitor user activity. This is easily done by installing an analytics application, such as Google Analytics, on your site. Matching customer feedback to the data gleaned in analytics helps us get a much clearer picture of their habits which oftentimes reveal their satisfaction, or lack of it.
5. Usability Tests. This is the action of observing users navigate your website to see if they perform the way you’ve planned. Doing this could be as simple – and cost-effective – as asking friends or colleagues to make a purchase and watch to see if they have problems or unforeseen challenges.
We, here at LD, especially understand the importance of usability testing. We know that 45% of consumers will abandon an online transaction – or leave the site completely – if questions or concerns aren’t addressed effortlessly and quickly.
Back to feedback methods: it sounds like we have a lot of options available to us. One of the most common myths about maximizing customer satisfaction is that it will significantly increase costs. What do you have to say about that?
Besides the fact that a good amount of annual growth comes from the vigilant nurturing of existing customers, it’s 6- to 7-times more costly to attract a new customer than it is to retain an existing customer. Here’s why:
1. The lost or inactive customer is already familiar with your products or services.
2. You already have buying preference data which you do not have with a first-time customer.
3. You are also able to give them more personalized attention than that of a new prospect.
So, by nurturing existing customers, we actually experience decreased acquisition costs. That enables us to apply those freed-up marketing dollars toward other projects. That’s great news!
Bobbi, thanks for joining us today. We appreciate your time.
My pleasure, Lisa. Thanks for having me.
When developing customer satisfaction programs and then sifting through the resulting data, there is a chance you might become overwhelmed. No need for that. As Bobbi mentioned, there are two main areas of customer satisfaction: product or service and the process.
Simply get answers to these 3 questions and you will have a good foundation from which to work.
1. Is our product or service and process meeting or exceeding customer expectations?
2. For the most part, how happy are customers with their interaction with our support team?
3. How likely are customers to recommend us to their friends and colleagues?
We are certain that by utilizing what you’ve learned today, you will experience the myriad of benefits associated with increased customer satisfaction.
We hope you’ve found this information helpful. We look forward to hearing about your customer satisfaction programs. What’s working for you? Please connect with us on Twitter @DirectiveGroup or on LinkedIn and be sure to share it with in your networks using hashtag #actionablemarketing. Join us next time for more actionable marketing in minutes.