Just about any industry you enter with your small business is going to be highly competitive. Even if you have a better product or service, you need customer satisfaction to create a successful business. Here are a few reasons why it’s so incredibly important:
Customer satisfaction creates loyalty, which is vital to the success of your small business. Every customer you have is necessary and you cannot afford to lose a single one. When a customer is happy, they will stick with your product or service, and they may even recommend it to a friend.
However, unhappy customers will not only find a competitor to use, but they are also more likely to tell others how much they don’t like your product or service. If you want loyal customers, you need to be sure you are creating an environment with excellent customer satisfaction.
Less Customer Turnover
Every company has a specific customer acquisition cost. When you spend money marketing, it cost you a specific amount to gain a new customer. If customer satisfaction is one of your strong points, you are less likely to lose your new customers.
This means, you won’t have as much customer turnover and you won’t have to spend as much to replace customers leaving your company. When customer service is at its best, you will not only keep your current customers, but also gain new customers from any incoming leads.
Higher Lifetime Value of Customer
With loyalty and less customer turnover, your customer lifetime value becomes higher. For example, if you spend $50 to acquire a new customer and they place a one-time order of $150, you have a lifetime customer value of $100.
However, if this same customer orders again and again over the next five years, you will see an increase in the lifetime value of the customer. Instead of just making a $100 return on your marketing investment, you may turn this into $1,000 or even $5,000 over the life of the customer. This increases your ROI just because you take care of your customers and keep them satisfied.
Less Negative Word of Mouth
Did you know, there is a 13% change an unhappy customer will tell more than 20 people about their experience? Most unhappy customers will tell between 10 and 15 people, which is still quite a bit of negative word of mouth.
One of the fastest and easiest ways to reduce the negative word of mouth associated with your company is with better customer service. When your customers are satisfied, they are less likely to spread anything negative about your company. This can keep you from losing customers you didn’t even know you had the chance to gain.
More Cost-Effective than Acquiring a New Customer
Once you’ve started to build any type of relationship with a new customer, they are cheaper to retain compared to the cost of getting a new customer. Often, you don’t have to do much to retain a customer if they are satisfied.
They probably know how to find you online and with a simple blog, you can keep them updated on anything new. You may already have their email address, as well. This opens the door for a newsletter promotion and the opportunity to turn them into a paying customer once again.
There are many reasons why customer satisfaction is vital to the success of your small business. Happy customers will help drive more business through your doors and will come back to reorder often. Make sure you put an emphasis on keeping customers satisfied with your products and services.