The received wisdom is that customer satisfaction – no, customer delight – is one of the most important goals any business should strive for.
No wonder then that our research shows that 57% of businesses measure it. But, should they?
There are arguably situations where striving for customer satisfaction may not be the best commercial decision.”
The five benefits of customer satisfaction
In most cases, the answer is a resounding ‘yes’. Why? Quite simply because customer satisfaction safeguards sales. Not only does a disappointed customer vote with their own wallet, they may well advise potential future customers to look elsewhere too.
But the benefits of investing in customer satisfaction aren’t just about maintaining the status quo and preventing a negative. Customer satisfaction brings a strong upside too.
- It boosts sales exponentially. Happy customers recommend you to others, which creates a bigger customer base, which advocates you to an even larger audience, and so on
- It helps to attract and retain the best staff. After all, who wants to work for the ‘Bad Guy’?
- It keeps regulators and political stakeholders at bay. As your customers are politicians’ electorate, a sure-fire way to increase market regulation or punitive legislation is to annoy customers at scale
- It attracts investors. Customer goodwill has a tangible value in accounting terms and when added to the benefits above, a company with high levels of customer satisfaction is a much more attractive investment prospect
Customer satisfaction doesn’t always matter
So, in most companies there’s a very strong case for setting customer delight as a central business goal. However, whilst that will be a smart move in most circumstances, there are arguably situations where striving for customer satisfaction may not be the best commercial decision.
- In some markets, customers have little choice whether or not to work with a supplier, e.g. if they hold a monopoly or there are high barriers to exit
- In some scenarios, customers are willing to accept dissatisfaction in many areas because there are other things that make it worth ‘grinning and bearing it’, e.g. the price might justify compromises in other areas
- In some circumstances, inertia may mean that satisfaction is low, but changing supplier simply isn’t worth the time or effort
In these situations, the temptation will be to forgo investments in building customer satisfaction to boost profits or invest elsewhere. In the short term that strategy may pay off. However, in the long term it’s a recipe for disaster.
Maybe a new competitor will shake things up, maybe that product or price advantage will be challenged or maybe inertia will disappear as customers become more motivated. That’s when having a bank of goodwill becomes critical – happy customers are more likely to stay loyal when the situation changes.
And if the ‘Ghost of Christmas Future’ isn’t persuasion enough, don’t forget that the upside benefits of customer satisfaction still apply even in these scenarios.