In this blog we explore why happy customers matter to every organisation, their value to you and the cost of losing them.
When we use the word customer, we really mean anyone who your organisation serves. They may be other businesses, consumers who purchase from you, diners in your restaurant, patients in your clinic, visitors to your attraction or event. They are all customers.
That customer should be at the heart of your organisation, after all they are the reason you are there and without them you would not exist. This quite attributed to Ghandi in his early years, sums it up:
“A customer is the most important visitor on our premises. He is not dependent on us, we are dependent on him. He is not an interruption of our work, he is the purpose of it. We are not doing him a favour by serving him; he is doing us a favour by allowing us to do so”
It’s not rocket-science to work out why happy customers matter. If customers are satisfied, or rather delighted with the services you provide they are more likely to come back to you and more likely to recommend you to others.
That reduces the cost of remedial action to make unhappy customers happier and reduces the cost of churn.
There are many different figures quoted and it clearly varies across sectors and customer types, but the fact remains it costs a lot more to attract a new customer, than it does to retain a current one.
If a customer is unhappy with the way they are treated they are more likely to leave a brand. Often that decision is driven by the way interaction with staff over the product itself.
One bad experience can take a long time and a lot of good experiences to recover from. For an improving organisation that’s a challenge as reputation often lags behind reality and a business that was poor in the past needs to be right for some time before customers accept it is a genuine change.
Great customer experiences come in many different guises:
Consistently good service levels mean customers know what to expect and are confident that the service delivery will meet those expectations. A restaurant that is immaculately clean, serves consistently good food, whose staff are always polite, friendly and efficient and charges a very fair price will provide an experience that customers trust and will likely lead to recommendation to others.
But it can also be the unexpected moments of delight, that can turn an emotionally unengaging transaction into something special. Buying printer ink is, at best a routine purchase and at worst, a distress purchase, choice of retailer driven by cheap prices and hassle-free order and delivery. I ordered the wrong ink – entirely my fault. When I got in touch to sort out a refund and re-order they were incredibly helpful, making sure I had the right ones and arranging free of charge express next day delivery. The speed of refund on the returns was impressive too. They behaved as if it were their fault not mine and provided a level of service you would expect from a premium supplier not a price-driven online retailer. I’m now their no.1 fan!
Clearly, it’s not always possible to keep every customer happy all of the time, though that shouldn’t stop organisations striving for that goal. But it is important to realise the impact that unhappy customers can have on your business.
It would be wrong to assume you know what your customers think without actually asking them. Clearly business metrics such as customer loyalty, basket size, repeat visits, churn rates and so on are important indicators, they tell you how you are performing in the here and now, but you invariably need to know more from your customers in order to improve many of those metrics.
In the past, any individual good or bad experience was shared with a small group of associates. We might ask a colleague or friend for a recommendation, but now it is far more public and social media acts as a multiplier
Review sites are increasingly shaping how we transact. Before we book a holiday we seek out reviews of accommodation providers, travel companies and destinations. Before we buy the latest tech product we read reviews, trying to sift out the paid-for advertorial reviews and awards as we search for the opinions of ‘people like us’. We even check out patient reviews of doctors and healthcare providers, so we can form an expectation before the appointment.
The review culture is making the need to deliver great customer service even more business-critical. It is also impacting the need to make sure that remedial action is swift and effective when things have gone wrong. If you needed any more convincing of this point then look no further than eBay, a business built almost entirely out of the power of reviews. We happily transact with unknown sellers online, based purely on their eBay rating. If it’s anything less than 99.9% we think twice before buying. So don’t ever slip into thinking that the odd negative feedback doesn’t matter!
Review sites can tell you what a minority of customers think, either highlighting strengths to maintain or issues that need to be tackled on an individual customer basis. Reviews often give immediate feedback that can be hugely valuable, but they will only ever be part of the story rarely allowing you to identify the scale of an issue or establish whether they represent the majority view.
So, in summary we can see just how important contented satisfied customers are to every organisation. The more delighted those customers are the more the scales swing in your organisation’s favour.
This content comes from a series of short webinars in which we share our perspective on how best to understand your customers experiences and how to ensure they are happy and loyal. They are jointly produced by Webropol, a web-based survey and analytics tool provider and XV Insight, a market research and insight consultancy.Please share your feedback on our Webinar series here so that we can improve our content. Thank you!
You can view the full set of webinars on YouTube or if you’d like more information please get in touch: