Acclaimed American business expert Peter F Drucker once famously noted: “The purpose of business is to create and keep a customer”.
It’s a simple sentence but a complex practice that involves knowing who your customer is, how they interact with your business, and how they feel about the service or products you provide.
Getting to the heart of this is all about customer feedback, and it allows business to understand a range of things.
Here’s an insight into the importance of customer feedback and the valuable tools it provides business.
Know thy customer
Most established business feel they know their customer – they’re the people who buy a product or service, right? But the likelihood is customers change across the years of business or there is an untapped market waiting on the fringe.
The key to really knowing your customer is gaining an insight into who they are, what makes them tick, what they look for in life, and the triggers that may prompt them to buy from you.
It’s all about seeking information from your current clientele to establish a customer persona that allows you to market to them, price for them and service them more effectively.
The golden rule
“The golden rule for every business man is this: Put yourself in your customer’s place.” – Orison Swett Marden
Seeking customer feedback allows you to understand how a service or product lived up to a consumer’s expectations. Did it offer the quality they anticipated? Was it delivered in the time they expected or did the staff they interacted with meet their needs?
All these questions allow a business to gauge how well they operate compared to the mission and vision they espouse, and in relation to their competition.
Once the level of satisfaction has been gauged, it enables a business to alter its systems and procedures accordingly to ensure delivery meets expectation and a product or service experience is second to none.
“A satisfied customer is one who will continue to buy from you, seldom shop around, refer other customers and in general be a superstar advocate for your business.” – Gregory Ciotti
Importantly, seeking feedback allows you to ascertain any dissatisfaction that may not otherwise be revealed, with statistics indicating:
- A typical business only hears from 4% of dissatisfied customers: 9% don’t voice complaints and 91% will never come back. (Source: “Understanding Customers” by Ruby Newell-Legner)
- On average, loyal customers are worth up to 10 times as much as their first purchase. (Source: White House Office of Consumer Affairs)
- There is a 5-20% probability of selling to a new prospect, and a 60-70% likelihood of selling to an existing customer (Source: Marketing Metrics)
- It takes 12 positive experiences to make up for one unresolved negative experience. (Source: “Understanding Customers” by Ruby Newell-Legner)
- News of bad customer service reaches more than twice as many ears as praise for a good service experience. (Source unknown)
But seeking customer feedback is about more than looking to establish what’s wrong with your business, it also offers the opportunity to tailor your products and services to the type of customer you have.
By contacting your customers and working out what they like and don’t about your business, you have a better insight into products that may work in the future, or the types of services and staff operations that resonate with clientele.
Nextpond software gives you powerful real-time client feedback with step-by-step actions to successfully transform your business. You can learn more about our software here, or contact us for further advice.