Why is customer satisfaction important? thumbnail image Published on 5th April 2023 by Gemma Harding

Customer service is a part of our everyday lives. According to Pwc, 86% of customers are now willing to pay more for a better experience. For this reason, it’s paramount to businesses that they get it correct more than ever before.


At the same time, customer satisfaction is at its lowest point since July 2016 according to the 2019 report by The Institute of Customer Service. This is to say, the proportion of customers experiencing an issue with a brand has increased by 1.2% and is at its highest point ever recorded however satisfaction levels with complaint handling is also at its highest ever point.


In this guide, we explain exactly what customer satisfaction is. We will then run through why this metric is so important and how keeping tabs on it can benefit your business. 


What is customer satisfaction?

Customer satisfaction (CSAT) is a metric that allows businesses to better understand how happy customers are following an interaction with a business. A key indicator of business health and success, CSAT is typically measured using customer satisfaction surveys. Areas addressed by customer satisfaction usually include:


  • The quality of products and services
  • The value of product and services
  • The availability of product and services
  • The shopping experience – atmosphere, cleanliness, friendliness of staff in physical stores, etc. 
  • The quality and availability of customer service support


Why customer satisfaction is important

Customers are more likely to leave a review if they have a bad experience than if they have a good one; one angry customer will tell up to 16 people about their service and this is set to have a more profound impact as more customers take to social media to complain therefore reaching a wider audience. Negative online reviews are up 8% since 2013, this could be attributed to the knowledge that negative reviews often result in quick action from the company in question – much quicker than an email or phone call complaint. When any grievances from customers are easy to air and responded to quickly and helpfully, this signals the completion of a successful and pleasing customer journey. The next step is usually to leave reviews, share the experience and repeat a purchase and start the cycle again.


Bad customer service can have a profound effect on business. This happened to energy giant Scottish Power who was fined £18m in 2016 by Ofgem for failure to provide satisfactory customer service. Customers had to wait for unacceptably long periods of time before their calls were answered. Complaints were also handled unprofessionally and took an extended time to be resolved. The fine Scottish Power received is the third biggest to be handed to one of the big six emergency providers. An Ofgem regulator said the emergency provider had failed to provide even the basics in customer service.


The difference between good and great CSAT


The vast majority of companies can provide good customer service but no business should become complacent. A good salesperson can sell consistently to new customers but if that salesperson lacks interpersonal skills, the business will not be able to survive very long on new customers alone. Excellent service is what retains customers, the product or service which you offer will attract them initially and possibly bring them back a second time. Loyal customers are created by building trust and providing them with consistent, barrier-less customer service.


Customers like to feel valued and prefer a company that treats them as a human being and not just an order or reference number. By providing great service to your customers, you are not only building a following for your brand, but also a group of supporters who may even refute any bad press about your company on your behalf, and therefore proving that one instance is not a usual occurrence.


Benefits of customer satisfaction


Above we have outlined some of the negative implications of poor customer satisfaction levels. However, to what extent can good customer satisfaction benefit your business? Below we take a look at some of the key benefits of good customer satisfaction and why all businesses should make it a key priority. 

  • It identifies brand strengths and weaknesses

Customer feedback represents the best way you can learn as a business. This is a double-edged sword. Firstly it can allow you to better understand your strengths. This is to say, when a positive pattern is identified as part of a customer satisfaction survey, you can use this information to continue focusing on this positive and emphasising this strength.


On the other hand, CSAT surveys can also provide valuable insights into where your business needs to improve. After all, identifying and addressing the causes of negative feedback is essential for any successful business. For example, if you’re regularly receiving feedback relating to the perceived poor value of a product/service you offer, you can use this information to assess your pricing structures or improve the quality of the product/service in question. Acting on negative feedback in this way not only allows you to improve product/services, it also shows unhappy customers that you value their opinions and are willing to make changes as a result. This can help when it comes to customer retention. 

  • It can increase revenue 

Simply put, businesses that take customer satisfaction seriously typically boast a more healthy revenue. Indeed, according to research from management consultants Bain & Company, brands that have a true customer experience/satisfaction mindset drive revenue 4-8% higher than those that don’t


This is because a focus on good satisfaction levels helps businesses to retain loyal customers and protect a steady stream of revenue in the way of repeat business. After all, satisfied customers tend to stay loyal to a brand. This means they are more likely to interact with, buy from, and recommend your business going forward. All of this contributes to larger revenues. Naturally, if a business’ customer satisfaction levels are low, the opposite effect can take hold, negatively impacting revenue. 

  • It can reduce marketing costs

Positive word of mouth recommendations from satisfied customers is an incredibly effective way to acquire new customers. If your brand focuses on CSAT and is able to foster a culture of customer referrals among its customer base, revenue can be boosted without the need for expensive marketing and/or promotional campaigns. 

  • It creates a safety net

This is known as the customer support pillar effect. In a nutshell, this means that satisfied costumes are more likely to stay loyal to your brand in the time of a crisis. Indeed, according to software company Sprout Social, 85% of customers are likely to stick with a business during crises if they are satisfied with how transparent the business has been with them in the past


 For example, if your business experiences a data breach, or has to recall a popular product due to a fault, customers that have a long history of satisfaction with their past dealing with your business are more likely to stand by you and support you through the crisis. Businesses can never be sure when a crisis may strike. This means having a loyal customer base is extremely valuable. 


How can CallCare help?

Research carried out by New Voice Media shows that 27% of the customers who switched to a competitor did so because they were on hold for too long. On average, customers will hold for 11 minutes before ending the call. 


CALLCARE can assist you to maximise business efficiency when you outsource your switchboard. Every call made to your company is answered by CallCare in a professional and friendly manner by our team of trained operators. Calls are directed to mobiles, where appropriate, or messages are taken, enabling you to maintain a high level of customer service which is sure to impress your clients. Our service is flexible and will be tailored to your exact specifications.


For more information about CALLCARE’s call handling service to improve your customer experience, contact us today.