Improving your customer satisfaction – where is the proof that it pays?


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While many companies know the importance of improving their customer satisfaction and loyalty, focus on this area is often driven by a need to be seen to be doing something rather than as a way to drive bottom line profitability and market value.

Most CEOs would agree that increasing customer satisfaction is a good thing. Many however have little or no evidence of the specific ROI to their own organisation.

Customer satisfaction can be measured in numerous ways, even some would argue, ‘over-measured’. The range includes basic CustSat and NPS calculations through to wide-ranging and indepth customer interviews.

But what is the real, final, ‘pounds and pence’ reason for doing this?

Over the years we at Bsquared have worked with many companies ranging from multi-nationals through to SME’s and not-for-profit organisations. As these companies have improved their customer engagement and the confidence their customers have in them has increased – we measure it through the Customer Confidence Index (CCI) – their performance and profitability has in many cases also improved.

Whilst we may not have the financial data to prove this categorically, we do know, and can evidence, that as an organisation’s confidence in dealing with it’s customers improves – and is measured – the effect snowballs. We can see this in the impact it has on their relationships, the new business created, reduction in waste, the ease with which they are able to create new service or product propositions.

We can also measure and assess the maturity of their customer engagement against our model, providing a calibration against best practice and where their strengths and weaknesses may lie.

All of this adds value to the bottom line of the organisation and ultimately to the worth of the company.
Recent research from the US supports this. The American Marketing Association states that a 1% improvement in customer satisfaction can yield a 4% improvement in market value. The Harvard Business Review also published the fact that a 1 point change in ACSI (American Customer Satisfaction Index) is associated with a 4.6% change in market value.

When what would appear to be such a little change can yield such a big impact why wouldn’t you invest in improving your customer engagement?

Rob Brickle
Rob Brickle is Managing Director of Bsquared Consulting, a company which specialises in helping organisations improve their business-to-business customer engagement and loyalty. Rob has many years experience advising business leaders on change and strategy and has a passion for helping organisations maximise the lifetime value of their relationships with key customers, suppliers and other key stakeholders.