Business

Customer Satisfaction Vs. Customer Retention: Connecting The Dots

2 Mins read

Businesses are obsessed with statistics, and for good reason: in a competitive environment, it’s the only way to have some sense of certainty and to know where you stand. That being said, those numbers don’t always offer an accurate representation of how customers will behave. This is particularly true when it comes to customer satisfaction metrics.

What’s the problem with emphasizing customer satisfaction when trying to gauge your operation’s success? It lies in the gap between satisfaction and retention. Happy customers don’t always stay, despite their positive experiences and if businesses can’t close that gap, then it loses its value. 

Measuring Satisfaction

In order to understand why satisfied customers don’t stay with your business, it’s important to start by looking more closely at this measurement, and it’s a simple one. Shorthanded as CSAT, businesses typically ask customers to rank how satisfied they are on a scale of 1 to 5. The scores are then added together and divided by the number of respondents to determine the overall score. That’s not a particularly nuanced measurement and many experts find it reflects efficiency more heavily than quality, but these surveys don’t have to be so reductive.

Instead of just asking customers to rank their satisfaction levels on a scale, smart businesses customize their CSAT surveys with added questions and greater nuance, which helps them understand what those numerical responses mean. If a customer is satisfied, does that mean that they received the product they wanted, or that they had a great customer service experience? Were they impressed by the quality or the speed of your third-party shipping provider? Businesses need to know these things in order to actually use the feedback. A number alone isn’t enough.

Escaping The Churn

Customers leave businesses for many reasons, but if yours is ready to escape the churn that’s costing them money, the people you really need to focus on are the satisfied customers who don’t stay, and that means you need better retention strategies. One approach that can really help your business stand apart is investing in customer relationships.

When customers build relationships with team members, rather than with your brand, your business is humanized. There’s a clear understanding among customers today that they can often get a better offer or treatment if they jump ship and explore the other options on the market. Sometimes it’s the first-time buyer deals or the simple emergence of new options since they first connected with your company. There are new things out there to explore.

Another tool that can take even ambivalent customers from flighty to long-term buyers is the development of more advanced loyalty programs. There are a lot of platforms that can help you do this, but what really matters about such arrangements is that customers can read them as a kind of mutual commitment or an invitation from your business to them, with the promise of perks. You don’t have to offer a lot, but you have to offer something, or else it’s easy for customers to walk away.

Social media and digital marketing have both made it abundantly clear to consumers just how many choices they have when it comes to goods and services and, at the end of the day, that has led to a decoupling between satisfaction and retention. With competition as stiff as it is, businesses need to do more than generate satisfied customers. 

What will you do to make your current customers stay?

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