In short, the answer is “No!” – To the question increasing customer satisfaction means increasing sales, one must do more than simply increase customer satisfaction scores. Researchers at the Chartered Institute of Management Accountants, who have been delving into the customer service practices of a major American homebuilder, hoped to discover that impeccable customer service would make it easier to keep prices high, lower marketing costs, and improve customer service. brand loyalty, all of which would ultimately lead to strong financial performance. But it doesn’t work like that: What they actually found was that while keeping customers happy generally pays off financially, profits start to plummet once satisfaction levels of 90-95% are reached.
So what is going on? Well, simply put, good customer service is expensive. “Businesses can spend too much on satisfaction,” says research expert Kenneth Merchant. ‘Moderate customer satisfaction may be good enough for many companies, as there are diminishing returns on improvements and investments in customer satisfaction. Customer service already accounts for a high proportion of many companies’ costs, up to 60% for high-tech companies, according to the analyst (which is why an increasing number of companies are looking to save their pennies by outsourcing). its operations). And if you had that mind, you could spend a lot more. So at some point you have to draw the line, or your cost of sale will be too high.
This research goes rather against the grain of recent trends. Many UK businesses have upped their customer service game in recent years – led by the likes of John Lewis, our businesses were recently voted the world’s best customer service in the UK’s Customer Satisfaction Index. United Kingdom (by UK punters, that’s right). And such measures have increasingly become among the most important quality performance indicators. But this research reminds us that it can go too far: there are times when good is good enough. Another good example is the lunch experience at a fast food restaurant. When you decided to go to a fast food restaurant for lunch, you decide to use the drive-thru and order a cheeseburger, fries, and a larger coke. First you get into a row of other cars, place an order, pay your money and without a single smile you hand over a bag containing your order. You walk away once you get a chip out hoping it’s crispy and instead it was soggy and tepid. Surprisingly, you received a regular burger instead of the cheeseburger you ordered. Your lunch experience is bad. Suppose fast food is committed to customer satisfaction.
They advertise that if there is any dissatisfaction, they will immediately replace the order free of charge and even deliver a new meal wherever you are. This increases customer satisfaction. However, customer satisfaction alone is not the ultimate goal. Because to be a profitable business, an organization must also be efficient. Therefore, if the fast food restaurant has to hire more people to cook more hamburgers, it will quickly recognize that the cost of being fully focused on effectiveness, without efficiency, will result in a non-profit situation.
