One of my favorite things about shopping at Trader Joe's 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 undoubtedly an expensive one for Trader Joe's, but customer satisfaction programs like these pay off for businesses — and end up earning them more revenue.

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. This post will define customer satisfaction, explain why it’s important, and outline the benefits that understanding customer satisfaction can bring to your business.

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Customer satisfaction is ultimately a reflection of how a customer feels about interacting with your brand, and businesses quantify these feelings with customer satisfaction surveys. These responses can give you a picture of customer loyalty, which predicts the likelihood of customer referrals.

Below we’ll discuss the additional benefits of understanding your business’ customer satisfaction score. 

1. Customer satisfaction helps you identify unsatisfied customers.

If you don’t understand why your customers are unhappy, you can’t make changes to your product or services that make them happy and align with the experiences they desire. 

Ensure you’re sending out customer satisfaction surveys, analyzing the results, and acting on negative customer feedback. This is especially important if the feedback is tough to hear, as it will help you ensure that you take steps to prevent customer churn, negative reviews on your product pages or social media, or negative word-of-mouth reviews to family and friends.

2. Customer satisfaction helps you identify happy customers.

Growing companies prioritize customer success, and an essential way to identify satisfied customers is through feedback from customer satisfaction surveys. 

Results will let you know who these customers are and what you’re doing that’s leaving them satisfied with their experiences with your brand. When you have this information, you can continue doing the things they like in the hopes of inspiring customer retention, and you’ll reap the benefits:  

3. Customer satisfaction helps you forecast and work proactively.

Without CSAT, and similar customer success metrics, it’s hard for customer success teams to plan and inform priorities.

These metrics are also helpful for other departments at your business. You can give sales teams the information they need to improve customer experiences, work with product to incorporate customer feedback and make improvements, and marketing can 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.

4. Customer satisfaction drives your inbound methodology.

Customer satisfaction does more than just measure your customer service — it optimizes other departments’ performance by providing them with helpful customer insights. This information is used to improve customer experience, which leads to a cyclical increase in customer satisfaction. You can visualize the process using the flywheel model below: 


Marketing, sales, and product development teams use CSAT to guide their work and interact with customers. Businesses with excellent customer satisfaction can easily attract and engage with customers because they've proven they can provide a delightful brand experience. If your company wants to adopt the inbound methodology, you'll need to integrate customer satisfaction into every function you perform.

5. Customer satisfaction helps marketers attract new leads.

Consumers are more likely to trust their peers than they are to trust marketing. In fact, 9 out of 10 consumers read reviews when making purchasing decisions. Consumers view someone like them (other consumers) as 14% more credible than brand employees. Without excellent customer satisfaction, your company won’t have these reviews to share. 

Your marketers should rely on customer testimonials to attract new leads to your business. Since customers are more willing to trust other users, these reviews are effective in terms of attracting prospects. Positive reviews have also been proven to boost sales by 12.5%. The better your customer satisfaction, the more material your marketers will have to advertise your brand.

6. Customer satisfaction is a selling point for sales teams.

Sales teams benefit from customer satisfaction because it acts as a selling point for closing deals. As mentioned above, customers are more willing to pay for an experience they know is excellent. If your customer satisfaction is superb, your team should highlight that during their pitch to leads.

Additionally, CSAT helps sales teams understand customer expectations. They can analyze happy customer reviews to see which parts of your product or service they should emphasize. That way, when speaking to customers, they can hammer in on distinct advantages that differentiate your business from its competitors.

7. Customer satisfaction guides product updates.

Negative customer reviews act as alerts that let companies know when a product or service has a problem that needs fixing. Product development teams monitor CSAT to identify these issues and quickly resolve them. 

This is particularly important for SaaS businesses that regularly update their software. By keeping a close eye on CSAT, development teams can correct costly product roadblocks that may lead to churn.

8. Customer satisfaction leads to customer advocacy.

If your business has positive customer satisfaction, then you have customers who are loyal to your brand. These customers will refer new leads to your company and generate more testimonials for your marketing team. You can create customer advocacy programs for these users and encourage them to advertise on your business’s behalf.

Customer advocacy programs reward customers for referring your business to potential leads. Customers are given incentives to join the program, then receive gifts or offers in exchange for reviews and testimonials. This creates a mutually beneficial relationship that rewards your best customers and keeps them loyal.

9. Customer satisfaction improves customer retention.

It should be no surprise that the happier your customers are, the better your customer retention will be. After all, happy customers won't have much reason to turn to competitors, so long as you keep them satisfied.On the other hand, unhappy customers will have plenty of reasons to churn, and it'll be up to your team to convince them otherwise.

By measuring CSAT, you can look at individual customer needs and create personalized offers for users who are likely to churn. Since 32% of customers would stop doing business with a brand they loved after one bad experience, you may only get one opportunity to stop someone from churning. Customer satisfaction optimizes your chances by providing you with relevant information about the customer's experience with your brand.

So, there you have it. Customer satisfaction is essential because it helps you solve problems, prevent churn, and identify happy customers that can become your advocates and evangelists.

Want to learn more? Read this post to understand how different types of customer surveys can help you drive business growth.

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Originally published Apr 21, 2021 5:00:00 PM, updated April 22 2021


Customer Satisfaction