Customer satisfaction is a hot topic these days. Blog post upon blog post note its  importance and everybody seems to agree. 

But, why is customer satisfaction so important? Many businesses are aware of the popular advice to keep customers happy but most don’t realize the key benefits of customer satisfaction. They end up losing a great opportunity to grow their businesses.

Here are our top 4 reasons to take customer satisfaction seriously!

 

Benefit #1: A positive customer experience takes the focus away from price.

A major benefit from increasing customer satisfaction is that it reduces reliance on price reductions in order to capture and retain your customers. In a McKinsey article, consumers report that more and more, their purchase decisions revolve around buying into an idea and an experience.

When it comes to making a purchase, 64% of people find customer experience more important than price (Gartner).

Focusing on increasing customer experience rather than price can help business in crowded markets as it redirects them away from the Anti-Core Drives, i.e: motivation to not want to take a Desired Action.

 

Benefit #2: Reduce cost from poor customer satisfaction.

Poor customer satisfaction can be costly to businesses as it can pull customers away to other competitors. A recent Salesforce poll showed that 74% of people are likely to switch brands if they find the purchasing process too cumbersome. Even worse, 51% of customers will never do business with that company again.

Poor experiences lead to formation of Anti-Core Drives mentioned earlier. The motivation to avoid a difficult or even negative buying experience is pulling customers away from continuing their businesses with the company. This is a combination of Anti-Core Drive 2 (Accomplishment) and Anti-Core Drive 8 (Avoidance). Addressing this is the first step to building customer satisfaction so that businesses don’t miss out on both short and long term sales.

 

Benefit #3: Increased retention rates from higher customer satisfaction.

Increasing retention rates can increase profits anywhere from 25% to 95% and can be achieved through an increase in customer satisfaction. But many companies focus more on increasing acquisition rates rather than retention rates which doesn’t necessarily increase long term profits and instead can be anywhere from 5 to 25 times more expensive for businesses, according to Harvard Business Review.

Gamification is a highly effective way to increase customer satisfaction and loyalty, but only if it is designed well. From the Octalysis Framework we know that a mainly Black Hat design (such as scarcity, fear, and unpredictability) creates mainly short term engagement. Most of the time when companies focus on acquisition rates only, holding on to customers is at risk. Black Hat strategies are usually employed, such as using FOMO (fear) or limited time offers (scarcity). These strategies are effective for acquisition because they create urgency for consumers to start to interact with the business, but it does not lead to long term engagement.

For that we need to balance it with White Hat design (Development and Accomplishment, Epic Meaning and Calling, as well as the ability to choose and strategize). Shifting the focus from Black to White Hat (meaningful, empowering, and seamless) experiences to boost customer satisfaction therefore help increase user retention rates.

 

Benefit #4: Increases employee engagement.

An added bonus is that higher customer satisfaction can increase employee engagement. Companies that make a concerted effort to improve their customer experience also see employee engagement rates go up by an average of 20% (McKinsey).

As customers increase feedback to the company, more opportunities arise for employees to engage with customers and to express creativity in customer support and innovation of positive experiences for them. In the Octalysis Framework, Core Drive 3 (Empowerment of Creativity and Feedback) and Core Drive 5 (Social Influence and Relatedness) create White Hat and Intrinsic motivation, leading to long term engagement and enjoyment for both customers and employees.

 

Quick tips to increase customer satisfaction

Knowing these benefits of increasing customer satisfaction, how can we achieve it? A previous article by Joris Beerda expands on how to increase customer loyalty with Octalysis gamification, but here are also a few quick tips.

  • Get to a live agent faster

The goal for the company is to reduce Anti-Core Drives experienced by the customer. Resolve issues swiftly and get users to interact with a live agent. 75% of customers believe it takes too long to reach a live agent (Harris Interactive).

  • View the customers as part of the solution, not the problem.

As customers provide feedback and report their issues, use this as a chance to improve the experience. Ask them to be part of the solution. Ask them to help solve the problems they’re facing. The customer’s problem is also the company’s problem. A collaborative mindset and engagement allows both customer and business to feel purpose, ownership, achievement, ownership, creativity, and social relatedness. 

  • Enable customers to be better.

As Kathy Sierra states in her book, Badass: Making Users Awesome, “‘Fabulous Customer Service’ sounds user-centered but it’s often just a company-centered focus masquerading as user-centered. … The role of customer service is to support and enable users to not just feel better, but to be better.” 

Focus on White Hat Core Drives when designing experiences. This allows customers to believe that the company’s product or service empowers them. Give them meaningful social interaction, strategy and a non-linear experience. 

Quick Summary

Benefits of customer service

  1. A positive customer experience takes the focus away from price.
  2. Reduce cost from poor customer satisfaction.
  3. Increased retention rates from higher customer satisfaction.
  4. Increases employee engagement

 

Quick tips to increase customer satisfaction

  • Get to a live agent faster
  • View the customers as part of the solution, not the problem
  • Enable customers to be better

 

Increasing customer engagement has many benefits for your business.  It reduces cost; generates higher retention rates; customers become less price sensitive; and other added bonuses are gained such as higher employee engagement. 

The best customer engagement is achieved when you base your designs on behavioral science and gamification. The Octalysis Framework, is a great starting point. 

Contact us for an initial free consultation and advice on your program or ideas.

victoria@octalysisgroup.com