Monday, June 5, 2017

Marketing Question of the Week: What's A Good Way to Gauge Customer Satisfaction?

Ask yourself this. Are your customers happy? 

A good indicator of this is to track your customer referral numbers. If you already have a slew of customer referrals, you’re obviously doing something right and your customers are satisfied. Otherwise they wouldn’t be running around singing your praises. So you can keep on keepin’ on with what you’re doing.

If your referral numbers aren’t as high as you’d like though - or if they’ve dropped - then your customers are either indifferent (meh) about your company, or they’re not happy with it. 

Neither of these situations is going to generate customer referrals. The latter might even create customer deferrals. 

You want customer referrals because they are the one marketing effort in which 90% of customers actually trust. (Which once could surmise means that 90% of people trust their friends and family to guide them well, while the other 10% believe their friends or family to have sketchy opinions. We’re not going to delve into relationship stuff.)

The bottom line - you definitely don’t want your customers disliking you. 

But indifference isn’t a whole lot better. 

You want your customers to be enthusiastic and feel good about you. You want them to be loyal. Here’s why:
  • It costs a lot more to acquire new customers than to retain current customers. 
  • Repeat customers typically spend anywhere far more than new customers do. 
  • Loyal customers will give you customer referrals.
Then there’s these stats from Referral Saasquatch - a company that specializes in referral marketing:
  • 65% of new business comes from referrals – New York Times
  • 92% of respondents trusted referrals from people they knew – Nielsen
  • People are 4 times more likely to buy when referred by a friend – Nielsen
  • Non-cash incentives are 24% more effective at boosting performance than cash incentives – University of Chicago 
  • Offering a reward increases referral likelihood, but the size of the reward does not matter – American Marketing Association
  • The LifeTime Value of a new referral customer is 16% higher – Wharton School of Business
  • 83% of consumers are willing to refer after a positive experience—yet only 29% actually do – Texas Tech

Customer loyalty is vital to the success of your business. 

And this is another reason to track your customer referrals. They will indicate how loyal your customers are. 

If your numbers are low, you may want to consider setting up a simple system that rewards clients for referring friends to your business, like half off a product or service. Or you could set up a customer loyalty program in the form of punch cards, point systems or tiered rewards. These incentives keep your customers coming back and developing a relationship with you. 

So first, you want customer referrals. And then you want to keep tracking them because doing so is an inexpensive way to determine how happy your customers are and whether they’re going to stick with you. 

If only other relationships were that easy.