The rising importance of customer satisfaction in 2022

The rising importance of customer satisfaction in 2022

Customers are willing to pay more for a better experience, so much so that more than half of them could be willing to pay more for better customer service and experience. Sharpening the customer experience can help you tremendously in your quest to improve customer satisfaction — generating customer satisfaction that leads to product and brand loyalty.
Customer acquisition usually takes priority over customer satisfaction, especially for new companies and start-ups. The reason for this is that companies prefer to show an increase in users and growth metrics rather than focus on the satisfaction of existing customers. 

How does customer satisfaction relate to customer retention?

In the short run, focusing on acquisition and retention may work well, but without focusing on customer satisfaction — the growth of a company and the acquisition of new customers won’t be sustainable. More and more companies are realizing this in 2022 and are discovering the benefits of fostering customer satisfaction that turns customers into product champions and real-life revenue growth engines.

What is customer satisfaction?

Many organizations define customer satisfaction as 'keeping your customers happy’. While that's true in many scenarios, this definition does overlook key aspects of customer satisfaction. 

Customer satisfaction is the cumulative experience your customers have while using your product and the level at which they’re able to use it to achieve their goals and objectives. The way your customers experience your product and how they go about adopting and interacting with it is an important component of customer satisfaction.

Customer satisfaction usually revolves around 3 key components:

  1. Expectations - When customers sign up to use your product or service, they begin their experience with definitive expectations. They expect your product to solve an existing problem or optimize a certain process. How well your product or service meets their expectations determines their level of customer satisfaction.  Mismatched customer expectations can lead to low levels of customer satisfaction and hence customer expectations should be aligned with your deliverables right from the start.
  1. Value - Each company in today’s market was built and grown to bring a certain amount of value to its customers' lives and businesses. The more value you generate, the more satisfied the customers will be with your services.
  1. Quality - The quality of your product and your customer service directly impacts your customers’ satisfaction. If the perceived quality of your product and services is high, then you’ll generate higher levels of overall customer satisfaction.

Why is the importance of customer satisfaction on the rise?

The pandemic has brought about an era of rapid digitization. Existing companies adapted to the new challenges and many new players entered the market. In such a scenario, existing companies focus on retaining customers; providing a better customer experience while competitors target existing companies’ dissatisfied customers. 

Unhappy customers are always at the risk of churn, despite any financial commitments that they may have made to your company. In this competitive landscape, higher levels of customer satisfaction and experience becomes a selling point for companies as customers are willing to pay more for a better service. 

Customer Experience Trends

The onset of the pandemic also brought about a change in other market trends. Companies now aim to provide customers with a more human-centric, customized approach rather than an automated, one-size-fits-all approach. 

Automation does greatly improve customer experience, it also risks de-personalization of customer service and experience.

Recent trends indicate a rise in personalized customer experience and services. In my experience, emphasis on customer satisfaction helps reduce churn and turns your customers into your very own product champions.

Advantages of having better levels of customer satisfaction:

  1. Higher Lifetime value (LTV) - High levels of customer satisfaction help drive more revenue from existing clients and increase each customer’s LTV. This doesn’t involve any extra customer acquisition costs, as you can upsell to existing customers or promote their subscriptions to additional services.
  1. Organic Marketing - Another benefit attributed to customer satisfaction is that it helps you achieve your marketing initiatives. Customers can distribute user-generated content that promotes your services and offerings. 
    You can then promote this organic user-generated content through your own marketing channels. Customers can also provide you with referrals and leave good reviews which can further improve your brand credibility in the market.
  1. Reduce Churn - Emphasizing customer satisfaction helps you not only predict, but also prevent churn. Satisfied customers are less likely to switch to your competitors or be poached by them.
  1. Internal Employee Morale - Internal Employee Morale is an often overlooked aspect of having better customer satisfaction. According to this McKinsey article on customer attraction, employees are quitting their jobs due to exhaustion and demotivation. Higher levels of customer satisfaction improve internal team morale, leading to a more positive work environment. Thus, higher customer satisfaction can also help reduce employee churn, as employees spend less time firefighting, and instead focus on providing a better customer experience.

Customer Satisfaction Metrics

Customer satisfaction is dynamic, it changes from time to time and hence it’s important to actively keep track of customer satisfaction levels. Tracking customer satisfaction can help you predict and lower churn as well as come up with improvements for your product or service.

Here’s how to measure customer satisfaction:

  1. CSAT - CSAT stands for Customer Satisfaction Score: the overall level of customer satisfaction with your product. It is usually measured on a scale of 1-3 or 1-10. You add up all the scores you received, and divide the sum by the number of responses — this result is your CSAT score.
  1. NPS - NPS stands for Net Promoter Score and is a widely used metric for evaluating the level of customer satisfaction. Ideally, you ask your customers some questions which they respond to with a 1-10 rating, which you then convert to a percentage. Customers that respond with a rating of 9-10 are called “Promoters” while those that respond with a rating of 0-6 are called Detractors. Customers that respond with a rating of 7-8 are referred to as Passives.  To arrive at a final NPS score, you subtract the Detractor percentage from the Promoter percentage — and this gives you your NPS score.
  1. CES - Customer Effort Score (CES) is similar to CSAT and relies on the same calculation mechanism. However, CES focuses on ease of usage and the amount of effort your customers are required to spend on executing operations.
  1. Feedback from the Customer Success Team - The Customer Success Team is usually the team with the maximum amount of client interaction. Logically, this team can easily gauge the pulse of your clients’ product usage and provide you with feedback for measuring the level of customer satisfaction. Your team can also devise a customer success plan for improving overall customer satisfaction levels. Various customer success software allow your team to actively log, track and improve customer satisfaction levels across different stages of the customer journey.

Improving Customer Satisfaction

Now that the importance and tracking of customer satisfaction metrics have been discussed, let’s talk about some implementation techniques for improving customer satisfaction. Once you’ve evaluated the current levels of customer satisfaction with your product or services, you can use some of the techniques mentioned below to try and drive even more improvement.

Drawing a customer journey roadmap

In my experience, the path to customer satisfaction starts right with the onboarding phase. The onboarding satisfaction often dictates how well your customers derive value from your services and how well they achieve their expected goals from your services. I've found that a higher level of onboarding satisfaction typically leads to higher levels of adoption and dependency on your product. 

Customer satisfaction, by the way, is not necessarily limited to the onboarding experience. It extends far beyond the onboarding phase and extends throughout the customer's lifecycle. Thus, it's important to draw up an entire customer journey roadmap. This roadmap should highlight the entire customer journey and also highlight their objectives. 

Once the customer journey has been mapped out, you can use this map as the ideal benchmark for the customer experience you provide. Another great practice is to draw up user personas which are basically character prototypes of the people using your product in order to better understand them and their needs.

Finally, the next step is to analyze the current operational paradigm and see how well it fits with the ideal customer journey roadmap. Identifying deviations from the ideal customer journey will help you understand areas of improvement for your existing customer experience and your overall customer satisfaction. Once you've pinpointed the problems, you can set a plan of action to align the current customer experience with the ideal customer experience.

Here are a few simple steps to improve customer satisfaction:

  1. Provide personalized customer support and service
  2. Make any relevant data and updates on any future actions readily available to your customers
  3. Ensure that there is no mismatch between your deliverables and customer expectations
  4. Be certain that your customer support is genuinely helpful for addressing customer complaints and queries
  5. Ensure that your team develops permanent solutions to problems being reported and actively works on reducing the occurrence of reported problems
  6. Actively keep track of customer pain points and continuously work on addressing them, to increase the perceived value of your product

Satisfaction is on the rise

Customer satisfaction is certainly an important metric to track in 2022. Higher customer satisfaction levels are not just good for business, but also for internal team dynamics. If you’re experiencing high levels of customer satisfaction — figure out what you’re doing right and keep doing it in order to achieve consistently high levels of satisfaction. 


If you’re seeing lower levels of customer satisfaction, then evaluate the root cause behind it and develop a plan for how to improve customer satisfaction, using some of the tactics mentioned above.

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