Are Satisfied Customers Enough?

We hear of the importance of customers and service regularly from newspapers, magazines, and at conventions. Is your customer service good enough to ensure customer loyalty? Are you doing well enough to ensure your future success with customer repurchase decisions and retention?

Conventional wisdom has said that we should focus our attention on ensuring that none of our customers were less than satisfied. Companies have used slogans such as “100% customer satisfaction” or “no dissatisfied customers” and been disappointed when it didn’t produce loyalty and retain market share. Extensive research has been done with all types of organizations to determine the correlation between the level of satisfaction and customer retention and the repurchase decision. This research indicates if customers are just “satisfied” that is not enough. Today, with almost everyone focusing on customers, simply satisfying customers is not enough to build customer loyalty.

This research identified organizations with few dissatisfied customers, yet those customers did not display their loyalty by continuing to do business with, repurchase, or tell others of the company’s benefits. This proved “satisfied” customers are not enough. They must be “very satisfied.” It validated that the probability of a customer continuing to do business with you if they are “very satisfied” is significantly greater.

AT&T, for example, found that a customer who was “very satisfied” had only a 3% jeopardy of leaving and going to a competitor. They also found that if a client had slipped into the “just satisfied” category the jeopardy of leaving increased ten times to 32%.

Xerox Corporation found, of the customers who said they were satisfied, only one in seven would do business with them the next time they were ready to make a purchase decision. However, they found, of those identifying themselves as “very satisfied,” six out of seven would do business again.

Opinion Research Corporation in Princeton found that “completely satisfied” customers were nearly 42% more likely to be loyal than those who were merely “satisfied” customers.

Regardless of your type of business, it is critical for your future success that your customers be not just “satisfied,” but “very satisfied.” Whether it is phrased “totally satisfied,” “completely satisfied,” or “very satisfied,” the investment to attain this level pays dividends.

We cannot afford to follow conventional wisdom that says it is very important to have no dissatisfied customers and all efforts simply should be focused on elimination of dissatisfaction. In the service sensitive ‘90s that is not enough. We must focus our resources on ensuring our customers are “very satisfied” and measure it frequently to ensure that we are investing our resources correctly.