Why you should monitor customer satisfaction and retention
The customer experience journey is ever-changing and never-ending, this blog has been updated with the latest information in Customer Experience for 2022.
Customer retention is about impressing the customers you already have enough so that they won’t turn to a competitor for their next purchase. But the relationship between satisfaction and retention is not so cut and dry. That’s why data collection is crucial. When you’re regularly collecting customer feedback you’ll also see areas of your business where you can improve the customer experience and reduce churn.
Customer churn costs U.S companies billions of potential revenue every year, so it’s important to gain an understanding of the ways you can prevent it. Customer satisfaction doesn’t stop at being satisfied just once, it’s an ongoing relationship.
One common reason for the switch is value. Customers may no longer see the value in what you’re providing. Remember, this doesn’t have to mean lowering your prices to compete. The priority is that the customer feels they’re getting back from you the same or more than what they’re paying for.
Poor customer service
Poor customer service can be a huge killer of loyalty. 33% of Americans say they’ll consider switching companies after a single instance of poor service, no matter how loyal. Ensuring that you’re providing a high standard across all channels (website, social media, phone calls, chatbots, in-store, etc) can help keep your customers happy and shopping with you.
Benefits of monitoring customer satisfaction and customer retention
By monitoring customer satisfaction and retention you can understand the correlation between the two and any gaps.
Satisfaction and retention are useful behavioral metrics
Their satisfaction refers to their intentions - yes, they like your business. But the retention is their behavior - are they going to act on their intention and stay with you? Monitoring both of these metrics can help you gain insights into customer behavior.
Complex data leads to more sophisticated service
Alongside the above changes in customer satisfaction, you also want to be on the lookout for when their intentions don’t align with their actions. Unhappy customers that do leave give you the option of researching the costs of providing what would have made them happy. Happy customers that leave also give you insights.
For example, they may be happy with what you’re providing but still switch brands because the price is an important factor in their decision making. If there is a cheaper competitor, they may still leave. Learning this may lead you to develop a cheaper option for cost-sensitive customers.
Ways to improve customer satisfaction and retention
So what are some of the ways to increase both your customers’ satisfaction and your retention rate?
Prioritize customer experience
Providing a great customer experience helps increase your customers’ loyalty to you and your business. Think of each interaction they have with your business and ways that you can make it smoother, easier, more enjoyable or better in some other way. Little interactions that go above and beyond really do make a difference.
Implement customer experience software
Customer experience management software is an invaluable tool used to measure customer loyalty, understand how to best respond to their needs and ultimately take the necessary actions to improve customer experience, and therefore customer retention.
Educate your customers
Ensuring your customers see value in your product or service early will increase stickiness, satisfaction and long term retention. Within your business is a wealth of knowledge about why you created your product or service, the best way to use it, surprising uses for it, additional pieces that make it even better… There’s just so much information that you and your team have. Educating your customer can add so much value to their experience. You can do this through a blog or video series, social media posts or online tutorials.
Gather customer feedback
Gathering customer feedback will provide so many insights into how you can increase customer satisfaction. There may be a process that is unknowingly laborious, a slow loading website or a new product that your customer would love. You’ll also find out what you’re doing right, which you can then look to replicate elsewhere in your business. You’ll also hear what your customers love about you, which can be powerful for advertising campaigns.
Track satisfaction data over time
Tracking all of this customer satisfaction information over time is important. You’ll be able to see areas of your business where you need to improve. This could be times in a customer lifecycle, certain stores, online versus offline or an overall change in results over time. You’ll also be able to see the effects of changes that you put into place based on past surveys. You can test changes and see if customer satisfaction improves. Using a system like Net Promoter Score makes this process simple and easy to compare over time, location or other factors.
Now is the time to review your customer retention rates. Then you can start diving in to see what you could have done to keep those that are leaving. Most actions you take to improve customer satisfaction will have a positive flow on effect to customer retention as well. Tracking this over time will show the impact your overall customer experience actions have.
Interested in learning more? Want to learn more about winning customer experience? We made a free guide for that.