The benefits of ensuring customer satisfaction

Keeping customers happy is certainly good for business. Companies do not have to sacrifice profitability to keep their customers satisfied. Companies which consistently rank high on customer satisfaction also rank high in profitability and hence have more loyal customers. Beside customer loyalty, by providing superior customer satisfaction any organization can gain the following competitive advantage.
Less wasted effort
The organization is likely to get to know its customer better, to know their wants and needs. Less time will be wasted in trying to assess what their needs are. Customers do not always know what they want but by knowing its customers well, the firm can get down to basics more quickly, reducing money spent on fruitless market research surveys.
Customer loyalty
Satisfied customers will certainly be more loyal. They are more likely to keep coming back and buy and this higher repeat rate leads to greater revenue and more profits.
Price advantage
Satisfied customers are willing to pay more for the satisfaction they derive from better service. This is not easy to quantify though but depends on many factors such as whether customers are highly price sensitive, whether the market is competitive, the type of purchase and the way the company positions its product in the market. Yet an extra margin is usually obtainable.
Selling costs
It is often easier to make a repeat sale than to conclude a first time sale with a new customer. Greater customer loyalty translates into lower sales expenses – more time is spent in persuading the customer to buy. The salesperson would merely have to take the order and answer the customer’s questions. Satisfied customers also act as an unpaid sales force through networking. This introduces an element of objectivity and greater credibility to the firm. Communication thus becomes less expensive. Word-of-mouth promotion, also known as referral, can be most effective in assisting businesses to establish their brand in the market.
Brand switching
Satisfied customers are less likely to change to a competitor’s product or chose to use another supplier whose products are cheaper.
Taking the customer for granted
Businesses tend to become less customer orientated and continue to take orders and forget to interact with the customer. The result is that a once loyal customer defects to the competition.
Effective workforce
Staff who deliver good customer service receive their customers’ appreciation and are motivated to offer good customer service in the future.
Creating a niche
By emphasizing customer service during your daily operations as well as your marketing strategy you will indeed set yourself apart from companies who don’t.