What is Customer Satisfaction? WTF Marketing Jargon Busting 015

What is Customer Satisfaction? is the fifteenth video in our exhaustive WTF Marketing series where we are cutting through the marketing BS to support businesses to be more successful.

In this episode Martin Henley of The Effective Marketing Company answers the questions What is Customer Satisfaction? Why is Customer Satisfaction important? How do you do Customer Satisfaction? What should you be asking in your Customer Satisfaction? and What should you do with the results of your Customer Satisfaction?

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If you prefer to read this is the start of the transcript - you will find the full transcript here:

What is customer satisfaction?

Hello there my name is Martin Henley, this is the what the series and in episode number 15 we are answering the question what is customer satisfaction and is customer satisfaction the answer to all the mysteries of marketing?

How are we going to define customer satisfaction?

In addressing the question what is customer satisfaction there are six things we'll be sharing with you. We are going to give you a definition of customer satisfaction; we're going to think about why customer satisfaction is so important; how to do customer satisfaction; what to ask in your customer satisfaction; when to do customer satisfaction and what to do with the results of your customer satisfaction.

Let's get this started Ricky.

Did we find a definition of customer satisfaction?

In addressing the question what is customer satisfaction we're going to need a definition and we found one at Wikipedia. What wikipedia tell us is that “customer satisfaction often abbreviated to CSAT is a term frequently used in marketing to measure how products and services meet or surpass customer experience.” I am excited about this definition of customer satisfaction because I am excited about meeting or surpassing customer expectations. For me the only issue with this definition is that it isn't quite broad enough, it's not just about how the products and services meet or surpass customer expectations it's about the whole customer experience. Customer satisfaction goes to your service, it goes to your presentation, it goes to everything that the customer experiences when they are buying from you.

Why is customer satisfaction important?

Now you might be asking the question - customer satisfaction sounds great but why is this so important?

Well there are some very good reasons you should be thinking about customer satisfaction. The first very good reason is about profitability. You will know from video number 12 when we spoke about cost of customer acquisition that you pay in money, in time, in energy for every single customer you win - the longer they stay with you, the more they buy - the higher their value to your company the more profitable your business will be. This goes to retention; Michael LaBeouf in his book How to Win and Keep Customers Forever tells us that customers leave for one two three four five reasons. The first reason, one percent of your customers leave, because they died - there’s not very much you can do about that. The second reason, three percent of your customers will move away - there's not much you can do about that. The fourth reason, a whopping 68 percent of customers, will leave you because of indifference expressed by your company or your staff to them, they don't they don't feel like you value them, they don't feel like you like them. Fourteen percent leave because they are dissatisfied by the product and nine percent leave for competitive reasons - maybe they can get the the product or service you're offering cheaper somewhere else.
The issue here is that 82% of your customers are leaving because they feel you don't like them or they're not happy with the cost of the products or services that you're providing. so you could retain 82% more of your customers by showing them a little bit more respect, a little bit more friendliness, showing them that you like them and knowing if they are happy with the product or service that you're providing. Customer satisfaction gives you the opportunity to address the reason that 82% of your customers are leaving you.

Beyond that this goes to the message that you send when you do customer satisfaction. For me, if somebody reaches out to me and says I care about your opinion then I instantly think more of those people - I have more respect for those people.