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A Guide to Customer Satisfaction

June 23rd at 1:43pm by Susan Levermann

"The product was delivered really quickly and my child is very happy. It is as robust as described and also endures energetic play, therefore I give it top marks.“

"I'm really not happy with the T-shirt, the color looks different to the pictures and it doesn't fit at all. At least the package was there quickly, otherwise I would have given zero stars."

"In my experience, the quality is fine for the price I paid. If you want something better, you have to reach deeper into your wallet."

Three different products, three buyers, three reviews – but they all have one thing in common: the reviews clearly show how satisfied or dissatisfied customers are with the product they purchased and to what extent their expectations were met. Consumer satisfaction seems to be an important point for the question of whether a company and its performance are rated well. It’s here we’d also like to bring up an extremely important topic in everyday business and marketing: customer satisfaction. In many marketing departments, such as corporate management, it is hardly on the radar, in other departments it is hyped like nothing else. Of course, hardly any company will say that customer satisfaction is not important to them. After all, a child can explain what happens to sales when customers are dissatisfied.

But what is the right way to deal with such a topic? What factors influence consumer satisfaction and what measures can a company take to adapt its performance to its customers’ needs? To find out that, and much more, we're going to follow the trail of customer satisfaction.

What is Customer Satisfaction?

The concept of customer satisfaction originates in social research. Here it is described using the so-called Confirmation Disconfirmation model or C-D paradigm. According to this model, customer satisfaction is the "difference between expectations and fulfillment of expectations".

In marketing, customer satisfaction has its place. Here it is assumed that every customer sets individual expectations, experiences, wishes, and demands against both each purchase and provider. The sum of these expectations can also be called a target state. This is compared by the consumer with the actual state of affairs, i.e. the comprehensive performance of the company. The comparison can be negative, neutral, or positive. If the actual and target state are close together, the expectations of the customer were probably met and he or she is satisfied. If, on the other hand, the target and actual state are very far apart, the customer is either disappointed with the product or has a “wow” experience.

Which of these two states was achieved depends on whether the actual state far exceeded the target state or did not meet it at all. From the company’s point of view, it is desirable as a minimum to meet customer expectations with your offerings, and far better to exceed them. However, since the latter is very difficult to achieve, isn’t it enough just to meet customer wishes?

The Goal of Customer Satisfaction

In principle, it is already positive that a customer's expectations have been met, as making expectations correspond with reality is a good step on the road towards customer satisfaction. However, the company's goal is to make the customer so satisfied that they buy again. It is precisely at this point that opinions diverge - it is not clear from the outset whether it suffices to meet expectations or if they need to be exceeded. If everything meets expectations, the customer is satisfied, but the lasting effect is not as strong as when exceeding expectations. Therefore, every entrepreneur should aim to exceed them - simply because a high level of customer satisfaction leads to customer loyalty. This commitment is based on a very high level of customer satisfaction; this again can only be achieved by exceeding the expectations which were set. In other words, the “wow” effect ensures customer loyalty to the company or brand.

This principle makes customer satisfaction a key factor for business success, as it can be (together with customer loyalty) the asset in the eternal struggle for buyer favor. It is also an indicator of the relationship between the consumer and firm and clearly shows how your performance is perceived. In short, customer satisfaction is clear feedback about all of the company's offerings and shows how they are perceived and used by buyers.

If buyers are satisfied, they will most likely buy again from the company, re-purchase the products, and engage with the brand again. This means satisfied customers become re-purchasers. They are demonstrably willing to pay higher prices, buy more products, and shop both more often and spontaneously. At best, these buyers communicate their satisfaction publicly, for example in review portals or in conversations with friends. Review portals especially are often the first point of contact for customers to research suitable products. In doing so, they rely on credible reviews from other customers. All of this falls under the word-of-mouth propaganda and is authentic, unadulterated advertising for the company – and therefore priceless!

If the popular evaluation sites are full of positive comments, then this has concrete consequences for the company - prompting existing customers to shop regularly, as well as attracting new customers who test the product range and become existing, highly-satisfied customers. It all sounds very desirable, doesn't it? By now, at the latest, marketing and management should have customer satisfaction high up on their strategy list.

Many Factors Influence Customer Satisfaction

Customer satisfaction is based on emotional and cognitive impressions collected throughout the customer journey. These form the expectation of the target state, which is then compared with the actual state.

In short, there are many factors that influence customer satisfaction. Here are some basic factors which are important to most customers and should, therefore, be known in marketing:

  • Payment Methods:
    Payments can only be made in cash or there’s a minimum €10 spend for a debit card transaction? This is really annoying for customers who spontaneously want to buy something quickly. There are plenty of alternative businesses that accept both debit cards, credit cards, and cash. Online, it becomes even more intricate if, for example, methods such as PayPal, direct debit, instant transfer, or invoice payment are not possible.

  • Shipping options and delivery
    One point that plays a major role online is the various shipping options. Depending on the item, parcel delivery is either an excellent or terrible proposition. Therefore, from the customer's point of view, it is optimal to be able to choose how the package is shipped. In addition, the costs should be communicated openly, either directly on the product pages by means of a further link or as a clear indication in the shopping cart. Customers don't like it at all if the shipping costs first appear just before the end of purchase.

  • Assortment Range
    It should be clear what you actually offer, and in the area, you specialize in the assortment should be sufficiently broad. Customers visit the stores or online shops with a certain expectation and if you do not meet them half-way, you will potentially lose an existing customer. For example, if a sports shop does not sell sports shoes, this is usually incomprehensible from the customer's point of view. As a consequence, they will turn to another supplier, who has a broader product range and also fulfills other wishes.

  • Usability
    The website should be user-friendly both on and offline. This includes design, music, and customer navigation. Nowadays, no one has to shop on outdated websites and in dusty stores. Shopping is much more fun with lots of light and highly visible product labels. Same on the Website: no one nowadays has the desire and time to dig through an awkward menu with numerous subpages. With a clear search function, it is often easier to get to the desired product. In addition, the pages should load quickly, otherwise, the customer will not buy anything in the online shop. Today, good websites hardly cost huge sums and there are many good examples out there – especially from the respective market leaders.

  • Service
    Service is a really important factor as customers expect friendly and helpful staff, quick and accurate answers, and that employees both make the customers feel dealt with and their questions answered. Problems can occur again and again, but they must be resolved immediately and the customer must be contacted empathically. In other words, even an angry critic must be communicated in a friendly and sympathetic manner. This is an art that needs to be promoted and trained accordingly because customers expect perfect service.

These five factors are essential to meet consumer needs. However, this alone does not achieve a “wow” effect. This only occurs when these basic expectations are exceeded. And this must be an important endeavor in business and marketing because one thing is quite clear: there will always be a provider that will do better. It is therefore also important to recognize the signs of dissatisfaction.

Four Clear Warning Signals from Dissatisfied Customers

Customers who are dissatisfied usually show clear warning signs. For some, it is worth taking a deeper look:

  • Complaints
    Dissatisfaction becomes clear when customers turn directly to the company with their criticism. It is important to document complaints in detail with effective complaint management in order to be able to use them positively later. We will show how this works in the next section.

  • Negative word-of-mouth propaganda
    On review portals, negative entries in social media, such as on Facebook or Instagram, also give dissatisfied customers a voice. Here you should immediately pay attention and analyze what exactly triggered the dissatisfaction.

  • No behavior
    If a customer no longer reacts, this is also a sign of dissatisfaction. When a customer no longer wants to communicate with the company, it shows that he sees no point in an exchange and is already looking for alternatives.

  • Migration
    The clearest sign of dissatisfaction is, understandably, the exodus to a competitor.

These factors do not necessarily build on each other, because not every customer speaks up before switching to the competition. Frequently, customer loss simply happens without the company noticing the growing dissatisfaction. But that is no reason to bury your head in the sand. Instead, you should implement methods to increase customer satisfaction.

Four Tips for Higher Customer Satisfaction

Once you've tackled the basic factors of customer satisfaction, there are other tips that you can build on. Thus, one can surpass the fulfilled target state expectations with the actual state. These tips show you how this can work:

  1. Focus on existing customers
    Marketing puts the emphasis on your customers, which is the right way to go about things. One goes a step further if one attaches importance to your regular customers. Existing customer maintenance can be dealt with, for example, by rewarding purchases with discounts for repurchases, after-sales promotions, accounts, bonus cards, and special discounts after the second purchase. In principle, you can provide regular customers with all-around care when you effectively keep and use their data in a GDPR-compliant manner. In this way, contacts can be personalized and showered with special, personalized offers that are directly tailored to the customer's purchasing behavior. For example, if you buy a pack of diapers, you will likely be interested in a diaper subscription, in which future purchases will be at a lower price.

  2. Aligning quality with customers
    Quality describes not only the feel or the build of the product, but also according to which standard and what values a company operates. The customer determines the quality of a company through the price of the corresponding product. This may sound harsh but is necessary to meet customer expectations. Achieving this involves getting into the customer and looking at where they expect what. This ranges from the quality of the products to the company philosophy and all the services in between.

  3. Perform regular analyses
    How do you know what a consumer thinks? Quite simply, by asking them. Regular surveys and the recording of customer satisfaction are mandatory because this is the only way to get a good picture of the actual state of the company over a certain period of time.

  4. Incorporate the results into your optimization
    If the analysis takes place regularly, the results must be incorporated into the optimization process. The customer does not give his feedback for nothing, he becomes part of the company improvements – and you can also say this clearly and thank the customer for it.

As you can see, customer analysis is an important point in order to continuously improve the business. But how do you go about getting honest feedback from your own customers?

How to Analyze Customer Satisfaction

Anticipating the most important question - yes! You can record, analyze, and evaluate customer satisfaction with various methods and then use the result for your own purposes! Measuring customer satisfaction is a broad topic, so the article Measuring Customer Satisfaction as a Basis for Success examines it in detail.

At this point, it should only be about one of the many methods: the Net Promoter Score® (NPS). This metric helps to find out which customers are really enthusiastic about the company and which are not. This is achieved by a micro-survey, in which a question is answered on the basis of a scale of numbers. In addition, customers can enter their own comments in a field – valuable feedback that can be evaluated with appropriate NPS software and thus made usable.

A company prepared for such steps quickly manages to determine comprehensive data, and on the basis of that, can devote attention to the continuous optimization of their offer.

Customer Satisfaction – The Engine Driving Success

Customer satisfaction must be given the place it deserves in marketing and management. This is because it is a decisive success factor, especially in today's digital age - when you can go shopping on your smartphone worldwide with just a few clicks and swipes. In order to ensure long-term customer satisfaction, it is important to know the expectations of your own target group of consumers and to meet, if not exceed them. A lofty goal that can be achieved step-by-step with a well-balanced campaign.

Customer satisfaction has now been illuminated from many quarters – and yet many questions remain unanswered. Customer satisfaction is such an all-encompassing area that cannot be summarized in a single article. That is why we are dedicating a series of posts on this subject in order to pay sufficient attention to all the important areas. You don't have to read the articles in any particular order, but you can choose the parts that are of interest to your own business:

Susan Levermann

Content Marketing Manager