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8 Reasons Why Customer Satisfaction Is Your Most Important Metric

By John O'Haver

Last modified: February 15, 2023

These days, customer service has become more important than ever. The modern customer is sophisticated. They have options. They can tell when a company makes customer satisfaction a priority—and they’ll leave the companies that don’t. 

In fact, some statistics suggest that 54% of people now have higher expectations for customer service than they did just a year ago. What does that mean? It means that if your business isn’t delivering the kind of customer service that helps people, then you may already be losing out on customers.

You might find yourself agreeing with this so far. But you might also wonder how a company like yours is supposed to make an investment in customer service when you barely have enough money to pay the people currently working for your business. How are you supposed to invest in customer service when you’re so focused on quality work in the first place? It might feel like you’re supposed to be in two places at once.

Fortunately, customer service is easier to adopt than you might imagine. And it’s more important than ever that your satisfaction rates are high. And you can improve that number without feeling like you’re ruining the bottom line that’s made you a growing business in the first place. Here’s how—and why—you should monitor your customer service satisfaction rates.

Why has customer service become so vital?

Simply put, customer expectations have changed. We already told you that 54% of people have higher expectations of customer service than just a year ago. But did you also know that even more people, 67% in fact, believe that customer service is improving? This means that your competition is investing in their customer service, and it’s showing results.

If you’re going to keep up, you’re going to have to invest in customer service, too.

It might sound like a challenge, especially if you don’t have the money to invest in customer service specialists. When your business has grown mostly through word-of-mouth thanks to your outstanding quality, then it might seem like a frivolous investment. But remember that it’s important to get ahead of these trends if you want to maintain an edge over the competition. You don’t want to wait five years to find out that a business competing with yours has made the investments you never thought to make.

Instead, the time to get ahead of customer service is now. But don’t worry—it’s not as scary a process as you might imagine. 

Don’t believe us? Let’s explore some of the reasons it’s so important that you invest in customer service.

Reason #1: You save money by investing in customer retention rather than acquisition.

One of the most well-known stats in all of the world of business is simple: it’s far cheaper to retain your clients than to acquire them.

It’s not hard to imagine why. When you acquire new clients, you have to do all sorts of expensive work. You have to capture their attention. You have to persuade them to try your business. You may even have to entice them with discounts and unique offers that you don’t always offer your retained customers.

Reason #2: Upselling works best when you have established relationships with customers.

It’s not just that your customers will retain more cheaply than new customers. It’s that they’re also more likely to buy into upsells when they already trust you. Customer service can have a major impact on whether or not customers trust you enough to make a new purchase. Customer service can be the deciding factor for whether they’re willing to buy another product or service from you. It isn’t just down to quality. It’s also about how you make customers feel about their interactions with your company.

Reason #3: Fewer headaches.

Let’s be honest: for most people, customers only call in when there’s a problem going on. That means that if a customer is calling in for customer service, it means that it’s only going to be a headache. The better your customer service is, the more quickly you can solve these problems and send customers on their way.

It isn’t just about the customer service itself, though. If your customers are happier, that will generally mean fewer headaches in everything you do. That means fewer calls coming in. That means customers are more willing to trust you. And overall, it will make for fewer headaches as you learn how to better run your own business.

Reason #4: You can build a better reputation through customer service.

Sometimes, your business isn’t about the marketing budget. It often comes down to a simple equation: are people who buy from you also recommending you to their friends and family? If they are, it means that you’re going to have an easier time marketing and building your business from the ground up. 

In building a business, there’s nothing better than referrals. People who have already been recommending your services don’t need to be sold quite as much as someone who came in from your marketing efforts. When someone hears about your company from someone they trust, much of the sales process has already been done in advance. And if you can use customer service to build a better reputation, it’s hard to quantify its impact on your sales. But you may notice it as you get more and more referrals coming in every day.

Reason #5: Customer service is an investment in your long-term success.

Let’s say you heed the advice you’re reading here. You invest in customer service. You retain your customers for a longer period of time. And, you build a strong reputation as a brand that’s easy to work with. What do you think happens then?

These aren’t bad things for your company long-term. In fact, they’ll strengthen just about every other aspect of your business. You’ll find it easier to make sales. You’ll find it easier to handle your own schedule as customer service takes some work off of your plate. And as you retain more customers, you won’t have to invest so many marketing dollars to have the same results. 

Don’t look at customer service as just an investment in how nice your brand is. Look at it as an investment in your long-term success.

Reason #6: You can’t do much better than word-of-mouth advertising.

Think about this for a quick minute: when you recommend a business to someone else, why do you usually do it? Sometimes it may be due to great service or product quality, sure. But just as often, we’re willing to wager that it’s the customer service that cinches it.

Customer service is essentially two things. First, it serves as a way to make customer satisfaction higher. And that will always help you retain customers. But customer service is also something of an investment in the kind of word-of-mouth marketing you can’t get in any other way. And that reason alone is why your customer service satisfaction rate should be one of the most important numbers in your business. 

Reason #7: Good customer service also makes happy employees.

If the reasons above weren’t enough, let’s consider one more reason you should consider investing in customer service. If you make it a habit to treat your customers right, it has an effect on the well-being of your employees. After all, who wants to work for a company that puts profit above its customers in every situation? Who wants to do their work if they know that they’re only making the lives of their customers that much harder?

Instead, employees will feel more invested in your company if they feel that their work has some meaning. And that meaning can be as simple as doing a job well enough to make a customer’s day. You don’t have to set out to change the world; you only have to commit to good customer service so that you leave every customer feeling a little bit happier than if they hadn’t come to you. That can make employees feel engaged and more satisfied with their work, leading to a better working environment. And it won’t hurt the quality of your services, either.

Reason #8: Good customer service creates new opportunities.

When you treat people well, it also creates networking opportunities. A customer may turn into an investor, for example, because they see how well you run your business. It’s rare, but it’s certainly something you should remain open to. If your business consistently treats people well, then eventually a few of those customers may come to you with other opportunities. It’s simply the way the world of business networking works.

Invest in Your Customer Service Satisfaction

Even something as small and simple as hiring a virtual receptionist can have a positive effect on your customer service satisfaction numbers. And given all that good customer service can do for you, it shouldn’t be surprising if you one day come to view this as one of your best investments. 

For more business tips, explore the rest of our blog here.