Customer satisfaction can make or break a company—especially a services organization. When your customers are satisfied, they’re more likely to continue using your services and recommend them to others in their network.
On the flip side, when customers aren’t satisfied, they may end up taking their business elsewhere. In fact, one 2018 report found that consumers are four times more likely to stop supporting a business following a poor experience.
That being the case, it’s important to do everything you can to track and improve customer satisfaction at your service organization. But before we take a look at how you can do that, let’s get our definitions straight.
What Is Customer Satisfaction?
Customer satisfaction refers to the level of happiness and contentment a consumer feels when buying and using products and services from a particular company. It’s about whether their experience meets or exceeds their expectations—or leaves a lot to be desired.
Generally, customer satisfaction is composed of the following components:
- A product that’s well-received and well-designed, creating a stellar purchase experience
- A top-notch service that’s delivered by talented and friendly people
- Projects that are completed in a timely manner (e.g., your project followed the expectations you set for timelines)
- Customer support that’s available in the event that a problem materializes
Now, let’s explore some of the reasons why customer satisfaction is perhaps more important than ever before for professional service organizations (PSOs).
Why Is Customer Satisfaction Important for Service Organizations?
Whether your business is a professional services organization, a managed services organization, or even a software-as-a-service (SaaS) organization, you have ongoing relationships with your customers.
Think about the business partners you rely on regularly. Then, compare them to retailers that simply close a sale, ship their products, and essentially disappear from the equation afterward.
Happy customers make happy, profitable businesses (and recurring revenue). On the other hand, unhappy customers tend to signal bad things—such as churn and decreased profitability.
Keep in mind that customer satisfaction isn’t just about your products and services. You might offer the best services in the world, but your team might be a nuisance to work with. Or you might have amazing customer support, but your offerings come up short within your target market. Either scenario can bring you down.
With all this in mind, here are some of the most persuasive reasons why your services organization should prioritize customer satisfaction.
1. It’s easier to switch brands than ever before
In the age of the internet, it comes as no surprise that finding a substitute is easier than it used to be. To illustrate, 76 percent of customers say that it’s easier than ever to take their business elsewhere, according to figures from Salesforce.
Add it all up, and deliver subpar experiences to your customers at your own peril. In theory, all it takes is one bad experience before your customers decide to stop supporting your brand for good.
2. Customers are more likely to talk about negative experiences
One study found that 95 percent of customers share details about their bad experiences, whereas only 87 percent of customers share details about their good experiences. In other words, people are more likely to tell others about the negative experience they had with your company than sing its praises for a job well done.
These days, sharing a bad experience involves more than talking to your friends over dinner. Depending on the customer, it could involve writing online reviews that don’t put your organization in a favorable light. Because 91 percent of people read online reviews and 84 percent of them trust those reviews as much as they trust their friends, this could have serious implications.
3. It’s more expensive to sell to new customers than to existing ones
Every company has customer acquisition costs. What’s more, one study found that, whereas the probability of selling to an existing customer is 60-70 percent, businesses only have a 5-20 percent likelihood of selling to a new customer.
Are you more likely to buy your favorite meal from your favorite restaurant or roll the dice on a new place you’ve heard might be OK?
Customer satisfaction and customer retention go hand in hand. The more satisfied your customers are, the more likely they will be to continue supporting your brand.
4. Customers who are satisfied are more likely to become loyal
Customer satisfaction is also correlated with loyalty. And that’s a big deal. Although loyal customers may account for only 15 percent of your customer base, they can be responsible for as much as 70 percent of your revenue.
That being the case, your services organization would be wise to prioritize customer satisfaction because it increases the chances of developing loyal customers.
By now, you understand what customer satisfaction is and why it’s important. Next, we’ll turn our attention to another important piece of the puzzle: measuring and tracking customer satisfaction.
How to Track and Measure Customer Satisfaction
When it comes to measuring and tracking customer satisfaction, you have many options. Here are three of the most impactful ones.
1. Study your customer churn rates
Customer churn rates measure how many of your customers have stopped doing business with your company over a certain time period. You might measure churn rates by month, by quarter, and by year. By comparing these figures over time—e.g., how many customers left in July 2018 versus July 2019—you can gauge customer satisfaction. The more satisfied your customers are, the lower your churn rates will be.
2. Launch an NPS program
Net Promoter Score (NPS) is a metric you can use to measure the customer experience. Generally, NPS indicates a customer’s loyalty and their likelihood to recommend your brand to their peers. By launching an NPS program and measuring and optimizing NPS data over time, you can build an increasingly satisfied customer base.
3. Automate check-ins at certain times in your quote-to-cash cycle
Your quote-to-cash cycle references your firm’s ability to acquire new customers and close deals. The longer your quote-to-cash cycle is, the more likely your customers will be to search for competing products or services. During the initial onboarding process, you’ll want to check in with your customers to make sure everything is going smoothly. With the right tools in place (more on that in a bit), you can facilitate that outreach automatically.
Now that we’ve taken care of the measuring and tracking piece, let’s focus on what you can do, specifically, to improve customer satisfaction.
Ways to Improve Customer Satisfaction
Improving customer satisfaction is all about building better products, offering better services, and providing better customer support. Here are some ideas as to how you can do that.
1. Invest in technology
If your professional services organization is still using the same tools it’s been relying on for a long time, chances are that your employees’ jobs are harder than they need to be. For example, they might spend a lot of time completing the same kinds of manual tasks over and over again—tasks that could be automated with the right tools in place.
By investing in professional services automation (PSA) technology, for example, you can make work easier for your team by taking repetitive work off their plates. As a result, they can reclaim time that they can then use to focus on delighting customers.
Unfortunately, you can’t just decide to purchase any old solution and expect great results. You need to do your due diligence, research your options, and find a platform that works best for your company. For more on that, here are seven factors to consider when evaluating PSA software.
2. Survey your customers
What better way is there to improve customer satisfaction than by directly asking your customers what you can do more effectively? Survey your customers at regular intervals and act on their best ideas.
3. Survey your employees
While you’re at it, survey your employees to get some of their ideas on what you could do to build a more customer-centric operation. Put their best ideas into practice, and your customer satisfaction metrics should improve.
4. Increase your support offerings
Don’t overlook this critical aspect of customer satisfaction: support. The more support resources you are able to provide to your customers, the better. For example, regularly publishing support content and sharing it on your company’s blog and social channels is a great way to add more value to your relationship.
At the same time, consider expanding your company’s support offerings. If phone support is available only during standard business hours, see what it would take to provide 24/7 support (assuming that makes sense). You can also incorporate new support mediums—such as live chat—to improve the customer experience.
Ready to Improve Customer Satisfaction at Your Organization?
Customer satisfaction can make or break your company. When customers are happy, so too is your business and its profitability. When customers are upset, tough times may be right around the corner.
The good news is that your company has the power to set the tone for customer satisfaction. You can’t control how your customers respond to interactions, but you can do a number of things to increase the chances that your company gives them a great impression time and time again.
To learn more about how your company can improve customer satisfaction, check out our e-book: Professional Services and Customer Centricity: Bridging the (Consumption) Gap.