Intuition tells us that Customer Satisfaction (CSAT) is important. But when it comes to retaining and growing your customers, it may not be as important as you think. What is important is usage – if your customer is using your product, they are more likely to renew, even if they are not totally happy. And vice-versa. If they are not getting value from your product, no amount of great customer service will result in a renewal.
Many of you have probably experienced this situation – “I’m really happy with you, and the customer service I get from your company. But I don’t see the value in the product so I’m not going to renew”. This happens more often than we would like and demonstrates that customer satisfaction is not the only thing that customers care about.
With that said, keeping customers happy is still important because (a) it does increase the likelihood that they will renew and (b) they can act as brand advocates for you with other actual or potential customers.
The most commonly used measure of CSAT is Net Promoter Score (NPS). Introduced by Bain & Company in 2011, it asks customers 1 single question:
“How likely are you to recommend our product/service to a colleague”
For more information on NPS, how to calculate and how to benchmark, please visit https://www.bain.com/insights/introducing-the-net-promoter-system-loyalty-insights/
And there are lots of tools available to help deploy NPS – a quick search on google reveals at least half a dozen options, and that’s just on the first page of the search results.
The bigger question is what do you do about it. The answer is easy – communicate with your customer. If they are a Promoter, maybe they can turn into a customer reference, or a case study or a brand advocate. If they are Passive, find out the 2-3 simple things that need to be addressed to turn them into Promoters. And if they are a Detractor, someone needs to immediately reach out to the customer to find out what’s going on. In any of these instances, a simple phone call and/or email can be extremely powerful.
Again, a happy customer is not guaranteed to renew. Likewise, an unhappy customer is not guaranteed to not renew. But understanding a customer’s state of satisfaction is a critical component to make sure you’re maximizing the chance that the customer will stick with you.
We have 20+ years of experiencing in implementing, and acting upon, Customer Satisfaction programs. If you would like help in implementing a Customer Satisfaction program, please contact us at email@example.com.
Azim Nagree is an ex-Bain consultant with 20+ years in leading strategy, growth and operations transformations.