How does Customer Satisfaction Affect Sales?

By on December 2, 2014 | Topics: Customer Service, Operations

Did you know that a full one star boost in Yelp scores could lead to a 5-9% increase in a restaurant’s revenue? This is evidence that customer satisfaction really does have an effect on sales. But this is true for every business, not just restaurants. Companies spend a lot of time figuring out how to increase the bottom line – cutting costs, reducing labor, etc. However, a 2% increase in customer retention has the same effect as decreasing costs by 10%. So what does this mean? It means companies need to focus a lot more on improving customer satisfaction.

The best part of increasing your customer-satisfaction levels is that customers keep coming back. These retained customers cost less than new customers. Why? Because you aren’t spending big marketing bucks trying to get them in your stores – activities you’re already doing are convincing them to come back.

How to Improve Your Customers’ Experiences and Retain Them

  • Offer a good mix of products: Offer products that range in price and features.
  • Keep your store easy to navigate: Keep your aisles clear and set up a good flow. There are some great merchandising tips here.
  • Focus on clean: When I was in high school I worked for a restaurant, and if we ran out of things to do, we would sometimes just lean up against the front counter. Obviously management didn’t like this much and came up with the saying, “If there’s time to lean, there’s time to clean.” This is true for your company, too. Train your managers to assign cleaning tasks to employees if they complete their other tasks. There is always something that can be polished up!
  • Train your employees to handle complaints better.
  • Ask your customers for feedback. When you show that you care and that you’re willing to listen to your customers, they will appreciate it and want to give you their business.

Creating Brand Advocates

Companies that continually provide excellent customer service gain loyal customers. When customers are loyal and love your company, they advocate for you. An example of brand advocacy would be how Apple customers are passionate about the company and its products. They only buy Apple products, and they tell all their friends, family, and coworkers how great Apple is. Apple, Apple, Apple. The point is Apple fans advocate for the company without any extra marketing effort (as a matter of fact my boss is talking about Apple right now). They’ve even created such a strong community that all of their customer support is done from customers answering other customers’ questions.

There are so many statistics supporting that customer service has an effect on sales, yet so many companies still disproportionately focus their efforts on other sales-impacting activities or cost cutting. It’s time to take your customers’ experiences to the next level to benefit not only them, but your company too!

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