The Full Story Behind Customer Satisfaction

Many companies spend a lot of time focusing on that one all-important number from their customer satisfaction research: average overall customer satisfaction.  Bonuses or other incentives might be tied to that figure. However, an increase in customer satisfaction is not always a positive for the organization.

Satisfaction can go up because your dissatisfied customers are leaving.

A major wrench in the customer satisfaction paradigm is that it is very difficult to increase both customer satisfaction and market share. If, for instance, your competitor offers a salient switching deal and attracts a sizeable proportion of your dissatisfied customers, your average overall satisfaction will increase as your market share drops. Satisfaction must be understood in conjunction with sales data and customer churn and for this reason, customer satisfaction and market share should always be measured simultaneously.

Satisfaction can be steady even if you address your service inconsistency.

Of course, we all hope that efforts to make the customer experience more consistent will ultimately increase overall satisfaction. However, the same standards that allow service consistency may also suppress truly exceptional customer service experiences. In this case, increasing the consistency of service may not have a positive effect on overall satisfaction.

Satisfaction can change if your product mix is changing.

With new products come new customers who have different expectations. If your product mix is changing, expect that your customer satisfaction benchmarks may also change. In particular, if you introduce a product that appeals to a very different market segment, the satisfaction of these individuals may have a significant impact on your overall results.

Satisfaction can change depending on when you ask.

Should satisfaction be measured at the same time or as an ongoing transactional program?  An ongoing customer satisfaction program can allow an internal monitoring team to address issues in a timely manner; however, depending on your business, you may be more interested in the customers’ satisfaction after a certain time period, such as once they have been using your product for a while. These customers may be able to provide more valuable feedback on the long-term desirability of the product

Satisfaction can change due to a changing competitive landscape.

Your competitors are also trying to increase their customer satisfaction and sometimes their actions have an impact on your customers’ satisfaction, especially if they start offering perks or other value-add services that you do not. Likewise, competitor missteps can also increase your customer’s satisfaction with your offerings even if you have not made any changes.

Measuring your competitors’ satisfaction in a blind study can be as or more informative as evaluating your own customer satisfaction.  You not only gain information about what your customers appreciate about you but also about what they like about your competitors. Then you can make an informed decision about whether or not to incorporate those features.

Satisfaction can change depending on customer tenure.

If you are in the business of offering a subscription service, keeping customers happy over the long term is a great challenge. While loyal customers may be more willing to accept one poor experience as an exception, those who have recently switched from another provider may be even more forgiving if they have had a very negative experience with their past provider. Perceptions and expectations matter in keeping customers satisfied, and your interactions with customers, positive or negative, are what shape those expectations.

Satisfaction is only one piece of the puzzle.

Although measuring customer satisfaction is important, it is just one part of a strong customer experience strategy.  Market share, customer churn, and competitor satisfaction can also provide important information that customer satisfaction alone does not capture.  As well, investigating the variance of your customers’ satisfaction, identifying any pain points, determining satisfaction by customer tenure, and looking at the differing satisfaction levels by customer category are also important to provide a clear assessment of your company’s customer experience journey.