Marketers often ask: What is the best metric for determining the effectiveness of a B2B product or service?
We are told time and again that conversion rates and revenue are the best metrics for determining marketing and sales performance. But one metric deserves attention since it presupposes the other two: customer satisfaction.
Clearly, knowing how your existing clients receive your product and service gives a glimpse at how your efforts are making an impact on the market as well as your business performance.
Other than that, Client Heartbeat shows six other reasons why measuring customer satisfaction is important for businesses not only in terms of brand enhancement, but also in terms of creating consistently effective lead generation and appointment setting campaigns.
- It’s a leading indicator of consumer repurchase intentions and loyalty
Customer satisfaction is the best indicator of how likely a customer will make a purchase in the future. Asking customers to rate their satisfaction on a scale of 1-10 is a good way to see if they will become repeat customers or even advocates.
- It’s a point of differentiation
In a competitive marketplace where businesses compete for customers; customer satisfaction is seen as a key differentiator. Businesses who succeed in these cut-throat environments are the ones that make customer satisfaction a key element of their business strategy.
- It reduces customer churn
An Accenture global customer satisfaction report (2008) found that price is not the main reason for customer churn; it is actually due to the overall poor quality of customer service.
Customer satisfaction is the metric you can use to reduce customer churn. By measuring and tracking customer satisfaction you can put new processes in place to increase the overall quality of your customer service.
- It increases customer lifetime value
A study by InfoQuest found that a ‘totally satisfied customer’ contributes 2.6 times more revenue than a ‘somewhat satisfied customer’. Furthermore, a ‘totally satisfied customer’ contributes 14 times more revenue than a ‘somewhat dissatisfied customer’.
- It reduces negative word of mouth
Customer satisfaction is tightly linked to revenue and repeat purchases. What often gets forgotten is how customer satisfaction negatively impacts your business. It’s one thing to lose a customer because they were unhappy. It’s another thing completely to lose 20 customers because of some bad word of mouth.
- It’s cheaper to retain customers than acquire new ones
This is probably the most publicized customer satisfaction statistic out there. It costs six to seven times more to acquire new customers than it does to retain existing customers.
If that stat does not strike accord with you then there’s not much else I can do to demonstrate why customer satisfaction is important.