Customer sat­is­fac­tion

Satisfied customers are happy customers: But what exactly does the term customer sat­is­fac­tion mean? Many things in the company depend on this value. You’re prac­tic­ally shooting yourself in the foot if you aren’t 100% sure what customer sat­is­fac­tion means, how you measure it, or what needs to be done in order to turn dis­sat­is­fied customers into satisfied ones. We’ll explain everything.

Customers are satisfied when positive ex­pect­a­tions are met. If the expected is actually exceeded, then the sat­is­fac­tion also increases. But if wishes and hopes are not fulfilled, the customer will in­ev­it­ably end up dis­sat­is­fied. This is just as true in the en­tre­pren­eur­i­al context as it is for any other cir­cum­stance in life. In a business re­la­tion­ship, however, the focus is always on customer sat­is­fac­tion: it can determine whether an oc­ca­sion­al buyer becomes a long-standing regular customer. To achieve this, the customer must have as many positive ex­per­i­ences as possible on their customer journey.

Customer sat­is­fac­tion is about the con­nec­tion between companies and people, and is therefore a part of psy­cho­lo­gic­al marketing. A company’s aim is to improve the customer’s ex­per­i­ence and send them positive signals - before, during, and after they make their purchase. Various factors are important for this: On the one hand, good products and services at reas­on­able prices play a major role. On the other hand, con­sult­ing, support and the design of the web store have an influence on customer sat­is­fac­tion.

In order to measure customer sat­is­fac­tion, regular surveys are necessary. Only by con­duct­ing these surveys, can you know exactly how satisfied your customers are and also what you can do to improve.

Customer sat­is­fac­tion can be explained by the so-called C/D paradigm (Con­firm­a­tion/Dis­con­firm­a­tion). This involves comparing the how things should be (target situation) with how things actually are (actual situation). The target situation is de­term­ined by the wishes (including emotional ideas) of the customer. The actual situation is the actual state of the product, service, and company. The customer’s desired (target) per­form­ance level is compared with the actual per­form­ance level. Customer sat­is­fac­tion results from the dis­crep­ancy:

• Actual < Target: If the ex­pect­a­tions of the customers are not fulfilled, they will be dis­sat­is­fied. This is known as non-con­form­ity.
• Actual = Target: In this case, the customer re­quire­ments cor­res­pond exactly to the condition of the product. Customer sat­is­fac­tion can be assumed.
• Actual > Target: If the company exceeds the ex­pect­a­tions of its customers, this is referred to as con­form­ity. This can further increase customer sat­is­fac­tion.

Every company strives for profit, i.e. wants to generate the highest possible turnover at the lowest possible cost. But this can never be possible without customers buying the products and using the services. Therefore it is important to satisfy customers with what you’re offering and to also continue pleasing them even after the initial purchase. This is where customer sat­is­fac­tion comes into play. If the customer is satisfied with their purchase and the company, they will consider buying again.

Customer sat­is­fac­tion is therefore very important for the company since this factor con­trib­utes to further effects. Satisfied customers are more likely to stick with the company on a long-term basis and therefore help with the company’s success. In addition, satisfied customers often pass on their positive ex­per­i­ences and become brand am­bas­sad­ors.

If you do everything right and your customers are generally satisfied with you and your services, you can look forward to these effects.

• Customer loyalty: A satisfied customer will feel a certain degree of loyalty towards your company and will consider buying more of your products next time they want to buy - even trying out products from a different range.
• Customer retention: If a customer is per­man­ently satisfied, they will stick with your company and continue to buy from you without con­sid­er­ing any other companies on the market.
• Lower price sens­it­iv­ity: A satisfied customer won’t just ditch the company even if prices increase slightly.
• Will­ing­ness to recommend: A high level of customer sat­is­fac­tion ensures that customers recommend you and your products or services to friends and family.

If you manage to retain a customer in the long term, you will have more planning security on the one hand and lower costs for customer ac­quis­i­tion on the other. It is cheaper to keep an existing customer instead of trying to win new ones over.

An un­sat­is­fied customer, on the other hand, can cause serious con­sequences. Not only will they not buy from you again, they might also pass on their negative ex­per­i­ences to other people and therefore cause a further loss in sales.

• Com­plaints: An un­sat­is­fied customer may contact you with their dis­ap­point­ment and require a lot from you to make them change their mind.
• Going elsewhere: If the customer is really dis­sat­is­fied, they won’t consider your company again when making purchase decisions.
• Negative pro­pa­ganda: Negative ex­per­i­ences are passed on. Un­sat­is­fied customers are in­creas­ingly using the internet to dis­cour­age other people from buying from you.

In order to prevent an un­sat­is­fied customer from becoming an angry customer, careful complaint man­age­ment is important. The employees re­spons­ible must be trained to deal with the (perhaps even un­jus­ti­fied) criticism of the customers.

In order to check customer sat­is­fac­tion, regular and extensive surveys need to be carried out. Surveys can be carried out by mail, in store, or online. After eval­u­at­ing the surveys, you have a good overview of the customer sat­is­fac­tion situation. However, in order to be able to work ex­tens­ively on customer sat­is­fac­tion, clear key figures should be de­term­ined that enable long-term analysis.

The CSAT value reflects the overall sat­is­fac­tion. In a survey with stand­ard­ized questions, customers are asked to rate their sat­is­fac­tion on certain factors - for example, from 1 (very dis­sat­is­fied) to 5 (very satisfied). In order to calculate the customer sat­is­fac­tion score, only the two highest values (4 or 5) are utilized, i.e. the answers from satisfied customers. The sum of these answers is divided by the number of completed ques­tion­naires and then mul­ti­plied by 100. The result indicates what per­cent­age of your customers are satisfied with the services received.

To measure customer loyalty, which is strongly related to customer sat­is­fac­tion, use the net promoter score. The customer is asked a single question: How likely are you to recommend this company to a friend? The customer can rate the prob­ab­il­ity from 0 (very unlikely) to 10 (very likely). The scale is divided in­tern­ally: All par­ti­cipants who chose 9 or 10 are con­sidered promoters - brand am­bas­sad­ors. Customers who chose 7 or 8 are con­sidered in­dif­fer­ent and all of the others are con­sidered de­tract­ors (critics).

To calculate the NPS, the per­cent­age of all de­tract­ors is sub­trac­ted from that of the promoters. The result can therefore also be negative, which is a bad sign for your company.

In addition to these two stand­ard­ized in­dic­at­ors, in­di­vidu­al in­dic­at­ors can also be con­sidered. The number of com­plaints received, for example, is an in­ter­est­ing factor. In this context, also pay attention to how your brand is being portrayed on social media. If there are lots of positive state­ments about your company, products, or services, you can assume there’s a high customer sat­is­fac­tion. Some form of sat­is­fac­tion can also be seen with sales. If you notice many repeat purchases, i.e. sales made by existing customers, you can also expect satisfied customers.

When you collect customer sat­is­fac­tion data, you need to evaluate it. Therefore, it is also important to conduct customer surveys regularly and com­par­ably. This makes it possible to work out whether customer sat­is­fac­tion is de­creas­ing over a long period of time, and whether the measures being taken are actually working or making things worse.

Customer surveys can also be used to uncover concrete problems. This gives customers the op­por­tun­ity to name the reason for their dis­sat­is­fac­tion. If you notice that the same problems are being mentioned again and again, you can start here. Let employees from the relevant de­part­ment know so they can work together to develop joint solution strategies and finally deliver a better product.

First of all, as already mentioned, you have to carry out regular surveys. Without com­mu­nic­at­ing with your customers, you cannot know what they expect from you and your services. You then work out which steps to take next from the results. Customers often show their dis­sat­is­fac­tion when con­tact­ing the company, for example, via the support hotline or during sales talks in the store. Here employee training courses help to strike the right note, even in difficult situ­ations. Es­tab­lish­ing an effective com­plaints man­age­ment system also helps to increase customer sat­is­fac­tion.

In­cid­ent­ally, in marketing research, it is often debated whether it makes more sense to merely fulfil ex­pect­a­tions or even exceed them. Getting the most out of your product in order to satisfy the customers’ wishes that they didn't even know they had sounds like a great com­pet­it­ive advantage. However, you have to ask yourself if the extra effort and cost is worth it. In order to exceed ex­pect­a­tions, ad­di­tion­al effort is necessary, but this might not make sense if the result ends up being only slightly better than the simply just ful­filling ex­pect­a­tions.

Ex­pect­a­tions also arise in part from your own promises. If you advertise a certain service and cannot (always) deliver it, customer sat­is­fac­tion will decrease. This means either that you have to adapt your service promise or that you have to put more energy into the process in order to meet the ex­pect­a­tions you generated yourself.

Ul­ti­mately, however, you improve customer sat­is­fac­tion by improving the quality of your products and services. If you take the needs of your customers into account, you can count on long-term success.