Mastering Customer Satisfaction: For Business Success

Customer satisfaction, often abbreviated as CSAT, is a familiar term in business vocabulary. It's a metric many companies use to gauge how well their products or services align with customer expectations. However, if you're aiming to build a truly successful business, mere satisfaction shouldn't be your goal.

 

Principles of Customer Delight

Inc. Magazine outlines eight principles of customer delight that resonate deeply with businesses aiming for excellence:

  1. Timeliness: Being prompt in your responses and actions.
  2. Active Listening: Paying attention to your customers' needs and concerns.
  3. Fulfilling Needs: Providing what customers truly need, not just what they think they want.
  4. Surprise and Delight: Going above and beyond by offering unexpected gestures.
  5. Accessible Support: Offering customers a designated point of contact.
  6. Respecting Boundaries: Giving customers space while still being available when needed.
  7. Flexibility: Having policies but being willing to adapt to individual situations.
  8. Transparent Assistance: Clearly communicating how you can help your customers.

The Value Builder Perspective

The Value Builder program emphasizes that satisfaction isn't enough. Delighted customers not only return for more but also become advocates, referring your business to others. This organic growth through referrals is not just cost-effective but also enhances your company's profitability and appeal to potential buyers.

Listening to the Voice of the Customer

One effective way to gauge customer satisfaction and gather valuable feedback is through surveys. The International Customer Management Institute (ICMI) advocates surveys to listen to the voice of your customers. Online surveys are not only cost-effective but also signal to customers that their opinions matter. Insights from surveys can inform product development, marketing strategies, and customer service improvements.

The Power of the Net Promoter Score (NPS)

Fred Reichheld's research introduced the Net Promoter Score (NPS), a powerful tool for measuring customer loyalty and satisfaction. The key question in NPS surveys—"How likely are you to recommend us to a friend or colleague?"—helps categorize customers into promoters, passives, and detractors. To figure out your net promoter score, simply subtract the percentage of detractors from the percentage of promoters.

% of Promoters 25%
% of Passives 70%
% of Detractors 5%

Net Promoter Score 20%

In Reichheld’s study, the average net promoter score was about 10 – 15%. There were some exceptional companies such as Apple, Samsung and Amazon that scored the “world class” score of 50% or better, but these were very rare. Tracking your NPS provides a forward-looking, predictive measure of your business's success.

Preparing for Sale: The Importance of NPS

For potential buyers, a high NPS signals a loyal customer base and future growth potential. Tracking and improving your NPS well in advance of a sale can make your business more attractive to buyers. By addressing areas for improvement and striving for a higher NPS, you not only enhance your business's value but also ensure its long-term success.

 

All material has been prepared by McKenzie Wealth. McKenzie Wealth is an investment advisor team or Investment Advisor at Richardson Wealth Limited. The opinions expressed in this blog/ video are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Richardson Wealth or its affiliates. Richardson Wealth Limited, Member Canadian Investor Protection Fund. Richardson Wealth is a trademark of James Richardson & Sons, Limited used under license.