One of my favorite thing about shopping at Trader Joe's -- besides the vegan cookie butter sold there -- is its generous return policy:
Customers can return any product if they're not happy with it -- even if it's already been opened and consumed.
Talk about customer satisfaction.
This policy is no doubt an expensive one for Trader Joe's, but customer satisfaction programs like these pay off for businesses -- and end up earning them more revenue.
I tell all of my friends and family about this policy because I'm so wowed by it, and now, I'm sharing it with everyone reading this blog post. In fact, I started shopping at Trader Joe's after hearing about the store's policy and affordable prices, and the business didn't have to spend any marketing or sales dollars to get me into the door.
Customer satisfaction is a critical concept for customer success professionals to understand and live by, and it's actually about more than a money-back guarantee. In this post, we'll start discussing customer satisfaction: what it is, and why it's important for your business to start measuring.
Customer Satisfaction Definition
Customer satisfaction (CSAT) is a metric used to quantify the degree to which a customer is happy with a product, service, or experience. This metric is usually calculated by deploying a customer satisfaction survey that asks on a five or seven-point scale how a customer feels about a support interaction, purchase, or overall customer experience, with answers between "highly unsatisfied" and "highly satisfied" to choose from.
When it comes down to it, customer satisfaction is a reflection of how a customer feels about interacting with your brand. And businesses and brands quantify this positive or negative feeling primarily using customer satisfaction surveys.
These responses can give you an idea of your average level of customer satisfaction -- along with a picture of customer loyalty, which predicts the likelihood of customer referrals (like the one Trader Joe's got when I first walked into the store).
Why is customer satisfaction important?
If you don't measure customer satisfaction, you can't identify unsatisfied customers that could churn or leave you negative customer reviews. You also can't identify happy customers you could activate as evangelists or referrers. Finally, you can't predict or prevent customer churn to plan proactively without metrics to analyze.
1. CSAT helps you identify unsatisfied customers.
You can't analyze unhappy customers' feedback, or make changes to your product or service to make them happy, if you don't know customers are unhappy in the first place. Make sure you're deploying CSAT surveys, analyzing, and acting on negative customer feedback, no matter how tough it is to hear, as your top priority, so you can prevent them from churning, leaving negative customer reviews, or warning against your brand to friends and colleagues.
2. CSAT helps you identify happy customers.
If you don't measure customer satisfaction, you can't identify your happy customers who are finding success with your product or service. And if you aren't prioritizing customer success, odds are, your company isn't growing -- at least,that's what we found in a surveyof nearly 1,000 business leaders across industries.
Growing companies prioritize customer success, and a key way to identify and activate successful customers is to requestcustomer feedbackto identify your satisfied customers.
These customers are the ones who will shout your praises to their friends and family, and they'll refer new customers -- growing your business faster than sales and marketing, at nocost of customer acquisition.
Without measuring CSAT and similar customer success metrics, it's hard for customer success teams to plan and inform priorities. Without metrics to inform how healthy (or unhealthy) your customer base is, customer success teams can't work with Sales to improve customer expectations, with Product to incorporate product feedback, or Marketing to improve the end-to-end customer experience. Leaders need data and trends to forecast team performance over the next month, quarter, and year to adapt strategy, if needed.
So, there you have it. Customer satisfaction is important because it helps you solve problems, prevent churn, and identify happy customers that can become your advocates and evangelists.