With growing competition in the midst of the digital age and the on-demand economy, engaging customer feedback should be a top priority for every business. Knowing what customers think is about more than just being able to boast of high satisfaction rates. It is about driving revenue and increasing profits by retaining customers long-term.
Without a doubt, feedback is intrinsically linked to profits. Positive feedback indicates a company is doing those things necessary to meet and exceed customer expectations; negative feedback suggests there is work to be done to keep customers happy. The feedback a company collects, and how that feedback is eventually addressed, will ultimately determine which direction profits move.
Retaining Customers and Saving Money
Companies spend tremendous amounts of money marketing to new customers they hope to add to the fold. There is nothing wrong with that in and of itself, but it can cost as much as four times more to land a new customer as compared to retaining an existing customer. Furthermore, statistics show that 80% of a company's long-term revenue is generated by just 20% of its loyal customers.
Initiatives as straightforward as sending out customer surveys can go a long way toward retaining customers by finding out what they think and then responding appropriately. Every customer retained is a customer more likely to spend in the future. Companies will increase their profits by increasing spending among customers while also reducing the amount they spend themselves on marketing.
Satisfied Customers Grow Revenues
Satisfied customers tend to return to the same businesses whenever they need the same products and services. As a natural result, their shopping habits translate into revenue growth for the companies they patronise.
Knowing this, it should be obvious that getting feedback is critical to revenue growth. Companies need to know what things are most important to their customers so they can make sure expectations are met and exceeded. When that happens, revenues grow right along with loyalty and satisfaction.
Happy Customers Make for Good Reputations
A company's online reputation in the digital era is a critical determiner of success. A bad reputation can destroy a business more quickly than just about anything else. On the other hand, a good reputation lends itself very well to growth. This is why many businesses have such a love/hate relationship with online review sites. Good reviews improve a company's reputation; bad reviews tear it down.
Customer surveys are relevant here in that the data companies collect from them can be used to improve their online reputations. Customers that know the companies they do business with are actively working to improve their experiences are companies worth doing business with. Simply put, a company's online reputation will be solidified by customers who know that company genuinely cares about them.
Satisfied Customers Motivate Employees
The ability of positive customer feedback to motivate employees is sometimes unbelievable. Nonetheless, nearly every employee wants to go to work knowing that his or her contributions actually amount to something. They see positive feedback as proof of that. So when employees know that customers are satisfied, they are more motivated to do better. They are motivated to exceed expectations in order to generate even more positive feedback.
The link between feedback and profits is undeniable – even when a company fails to collect feedback. The lesson to be learned here is that it is always in a company's best interests to find out what customers think about their products and services for the purposes of always working toward improving the customer experience. Doing so will all but guarantee better profits.
Keywords: customer feedback, customer surveys
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