Here’s how Brian Balfour, former VP Growth at HubSpot, puts it:
Retention affects every part of a business, from the customer acquisition cost to the customer lifetime value to word of mouth and customer loyalty. You can acquire customers as rapidly as you’d like, but if they aren’t sticking around, you don’t have a sustainable business. Specifically, though, what’s the importance of customer satisfaction to business health?Ĭustomer retention is arguably the most important factor in long-term business growth. That’s the general truth about measuring and data. What’s the harm? You might find problem areas that are worth massive amounts in terms of ROI. If you’re open to the idea that you could improve, it’s worth spending the little bit of time it takes to set up measurement solutions and to collect the data. These companies are elite because they measure things like customer satisfaction and act upon the data. The truth is, however, that even the best, most innovative, top-performing businesses all have faults and opportunity areas. Without contact or feedback from the customer, we isolate ourselves in a sort of bubble.
If you can’t control it, you can’t improve it.” If you can’t understand it, you can’t control it. If you can’t measure something, you can’t understand it. “Measurement is the first step that leads to control and, eventually, to improvement. If people churn faster than you can acquire new customers, your business will fail. If you don’t know who is unhappy, you don’t know who will churn, and you can't figure out why they're unhappy. If you don’t measure customer satisfaction, you can’t identify unhappy customers. Still, measuring customer satisfaction can help us do this (no matter what we call the metric). We’ll ignore arguments of semantics in this guide, but it’s important to note that the focus generally shouldn’t be on providing an average experience, but rather, on creating raving promoters for your business. The argument is that we should aim for delight. If you have a great meal at a restaurant, you don’t sit back, smile, and say, “that meal was. In fact, there’s some ruckus around the term “customer satisfaction.” After all, as the argument goes, customer satisfaction is simply the absence of customer frustration. Sometimes we use a five-point Likert scale, and sometimes we use a Net Promoter Score® (NPS®) survey. Sometimes, we collect these measures right after a transaction or other times at a fixed date in the customer relationship. In practice, this could be executed using many different survey design tactics, such as differing questions, survey response scales, and collection methods. Customer satisfaction is one of those terms. Many terms in business are nebulous and vague. In our 2018 State of Inbound report, 61% of respondents noted "generating traffic and leads" as their number one marketing challenge, which can probably be tied back to another problem: They’re also struggling to keep their existing customers.Ī business simply can’t grow sustainably if it has a churn problem, and we can find early red flags of churn by gauging customer satisfaction (and working to improve it over time). Common business wisdom tells you that acquiring customers is 5 to 25 times more expensive than keeping current customers.Ī bad customer experience or bad customer service is also a leading indicator of customer churn (which is massively detrimental to growth). Successful customers can become your best salespeople, as well our research shows that 77% of people have shared positive experiences with companies in the past year.įurthermore, keeping your current customers happy is good business in the long term. Growing businesses are more likely to prioritize customer success than those with stagnant or decreasing revenue. If you don’t satisfy your customers, your business will fail.