Why Customer Satisfaction is Important in Business
No matter how much you want to please your customers, you will not please every one. That is not news to anyone running a business. Customer satisfaction is important in business because the customer decides whether your product is useful, relevant, and worth buying again.
The harder part is dialogue. Dissatisfied customers speak up, but the silent majority often leaves without warning. If you only listen after the complaint arrives, you may miss the expectations, perceptions, and relationship signals that tell you whether the business is still earning trust.
What Is Customer Satisfaction In Business?
Customer satisfaction in business is the degree to which customers believe your goods, services, documentation, support, and relationship have met their expectations. It includes factual requirements, such as safety standards or delivery commitments, and perception-based requirements, such as whether the company feels responsive, fair, and easy to work with.
Customer satisfaction is important because it affects repeat purchases, referrals, complaints, refunds, support load, and the company’s ability to understand its market. A business spends marketing dollars to attract customers, but the long-term economics depend on keeping customers satisfied enough to purchase again.
Why Is Customer Satisfaction Important In Business?
Customer satisfaction is important in business because it gives management a practical signal about whether the company is solving the right problem for the right customer. When customer satisfaction is treated as a priority, product decisions, service standards, policies, and procedures become easier to evaluate.
Again, not a breathtaking revelation. Yet a rare opportunity from a customer can reveal the gap between what a business believes it provides and what a customer believes they bought.
- Why is it that only dissatisfied customers get in touch?
- Why are their expectations often far outside the norm?
- What about the silent majority? Why do they not dialogue with us?
One customer, called Hans here, did not like that a policies and procedures manual did not contain a complete, up-to-date listing of every national law affecting or related to the subject matter of the manual. Hans asked when the product had last been updated. The answer was less than two years ago.
To Hans, this was unacceptable. For what he paid, he believed he should have received much more than he got. If new laws had been enacted in the last year and a half that could impact the way he does business, he needed to know about them.
Many Customer Segments To Satisfy
Hans had a point in principle. Customers do need to understand laws, standards, guidelines, and regulations that affect their business. The problem is scale. Bizmanualz has an international audience with many customer segments to satisfy, and the number of laws on any given subject can be enormous. Countries are adding and revising laws all the time.
This is one reason international standards, like ISO 9001 quality management, are critically important. Every market you can think of, especially food, health care, manufacturing, finance, and safety-sensitive industries, is heavily regulated in most countries. ISO standards help harmonize expectations around the world, so a company that complies with relevant international standards is often better positioned to comply with local regulations, too.
It is not possible for a single manual to keep up with all the regulatory changes occurring around the world, so a good framework has to defer to established authority. For instance, in the Finance Policies and Procedures Manual, the manual does not just mention GAAP and leave it at that. It also includes reference to IFSB and explains its importance. Rather than restate every applicable rule, regulation, and guideline, the better approach is to include references and links to authoritative sources.
If a manual tried to be all-inclusive, it might never get to market. If it did, imagine the shipping charges. More importantly, the customer might still need qualified local legal counsel, because a manual framework does not replace jurisdiction-specific legal advice.
Provide A Solid Customer Framework
The practical answer to Hans was that the product is designed to provide the greatest good for the greatest number. It might be prohibitively expensive for many customers if every P&P manual were tailored to each customer’s unique circumstances.
That can be done, and has been done, for companies on a for-hire basis. Still, many companies purchase standard policies and procedures because they are a lower-cost alternative and provide a solid framework for their unique circumstances and documentation requirements.
Customer satisfaction does not always mean saying yes to every request. It means understanding the customer’s need, explaining the product boundary clearly, and deciding whether the business should change the product, change the communication, or change the target customer definition.
What Is The Importance Of Customer Satisfaction?
Seen hanging on an office wall:
Rule 1: Customer is always right.
Rule 2: If you think the customer is wrong, refer to rule 1.
In essence, this is not that different from what McDonald’s founder Ray Kroc said: “if you work just for money, you’ll never make it, but if you love what you’re doing and you always put the customer first, success will be yours.”
Maximizing Customer Satisfaction
Some might argue that not all customers have high integrity, and a few may take advantage of a customer-centric attitude. That may be true in rare instances, but if you have a product that the customer needs or wants, and a business culture focused on maximizing customer satisfaction, the benefits usually surpass the disadvantages.
General Motors learned hard lessons about customer satisfaction, market relevance, and operational focus over many years. There were many reasons for its difficulties, including sheer size, inefficiencies, corporate hubris, an outmoded business model, and weak attention to what customers actually valued.
- Its sheer size and the attendant inefficiencies
- Corporate hubris, perhaps reflected in the famous statement, “What’s good for the country is good for General Motors, and vice versa”
- An outmoded business model
- Lack of customer satisfaction
Satisfying Customer Requirements
IATF 16949, the automotive quality standard similar to ISO 9001 2015 Procedures and based in part on QS9000, places great emphasis on satisfying customer requirements. The IATF 16949 overview describes the standard’s focus on automotive quality management system requirements.
Customer requirements are often fact-based, such as safety standards, legislation, specifications, and delivery terms. Just as often, they are based on perceptions. A company can compile a lengthy, detailed checklist of customer requirements and still miss important information when that checklist is not reexamined on an ongoing basis.
If that checklist becomes the “Commandments of Manufacturing,” the company using it runs a serious risk. Ask GM. The lesson every remaining business must take to heart is simple: customer requirements change, customer perceptions change, and the company has to keep listening.
Who Is The Target Customer?
When did you last have an open, honest discussion with your customers, maybe not all of them, but certainly your best ones, to see how they feel about your goods and services? Do your customers consider your product and your company useful and relevant?
When did you last reevaluate your definition of your target customer? Do you use the best tools for getting and evaluating your customers’ perceptions? Are you doing all you can to cultivate customer relationships and maintain them? Are you making an effort to anticipate customers’ needs? Are you making an effort to enhance customer satisfaction?
Taking care of your customer, listening to them, and acting in their best interest pays off. The primary goal of any business is to provide goods or services to its customers. So why not treat such an important component with utmost priority?
What Should You Measure?
Customer satisfaction should not be reduced to one score. A single survey number may be useful, but it can also hide the operational cause of the problem. A business should look at complaints, repeat purchases, response time, returns, refunds, support notes, delivery misses, warranty issues, and the questions customers ask before they buy.
Those measures help management separate a product issue from a communication issue. If customers misunderstand what is included, the sales page, documentation, onboarding, or support script may need improvement. If customers understand the product and still cannot get the outcome they expected, the product or service process may need to change.
The measurement system should also include qualitative feedback. Numbers tell you that satisfaction is rising or falling. Customer comments, support conversations, renewal calls, and refund requests tell you why. That is the material that helps a company decide whether to improve the product, adjust the target market, or reset expectations before the next dissatisfied customer walks away.
Dissatisfied Customers
Most customers will walk away without complaining. They do not announce that they are taking their business elsewhere. They just do it. They do not give you a chance to explain yourself because they feel they have been let down all along.
Dissatisfaction is rarely the result of a one-time occurrence. It happens over a period of time. If, from the outset, communication is poor or nonexistent, the foundation for customer dissatisfaction is being laid. If you do not continue to make your customer feel valued and welcome, the relationship that might have been never is.
How Does Customer Satisfaction Support Repeat Business?
Customer satisfaction supports repeat business because satisfied customers have fewer reasons to search for alternatives. They understand the product boundary, trust the company to respond, and believe the relationship is worth continuing.
A business spends marketing dollars to attract customers. The better question is how many dollars, hours, policies, procedures, and management reviews are spent keeping customers happy and satisfied so they repeat and purchase again. That is why customer satisfaction is important in business. Your business future is counting on it.
Frequently Asked Questions
Why Is Customer Satisfaction Important In Business?
Customer satisfaction is important because it affects repeat purchases, referrals, complaints, refunds, and the company’s ability to understand whether its product still meets customer expectations.
How Can A Business Improve Customer Satisfaction?
A business can improve customer satisfaction by listening to complaints and quiet customers, clarifying product boundaries, reviewing requirements regularly, and acting on feedback before customers leave.
What Is The Silent Majority In Customer Feedback?
The silent majority is the group of customers who do not complain, even when they are dissatisfied. They may simply stop buying, which makes proactive dialogue essential.
Why Do Customer Requirements Change Over Time?
Customer requirements change because laws, standards, market expectations, business conditions, and customer perceptions change. A company has to keep reviewing requirements instead of relying on old assumptions.
How Does Customer Satisfaction Lead To Repeat Business?
Customer satisfaction leads to repeat business by reducing churn, increasing trust, and making customers more likely to purchase again instead of searching for another provider.
