{"id":1675,"date":"2015-07-08T09:52:20","date_gmt":"2015-07-08T14:52:20","guid":{"rendered":"http:\/\/flevy.com\/blog\/?p=1675"},"modified":"2015-07-15T17:45:26","modified_gmt":"2015-07-15T22:45:26","slug":"how-customer-satisfaction-drives-sales-growth","status":"publish","type":"post","link":"https:\/\/flevy.com\/blog\/how-customer-satisfaction-drives-sales-growth\/","title":{"rendered":"How Customer Satisfaction Drives Sales Growth"},"content":{"rendered":"

You\u2019ve been told you should be measuring your customer satisfaction, but you\u2019re wondering if it\u2019s really worth it. Or, maybe you\u2019re trying to drive sales growth and wondering whether improving your customer satisfaction will help.<\/p>\n

Well the short answer is “yes, customer satisfaction has been proven to drive sales growth.” Improving your customer satisfaction really will boost your sales. But don\u2019t just take my word for it.<\/p>\n

A National Customer Satisfaction Survey<\/h2>\n

In 2012 the Institute of Customer Service (ICS) surveyed 26,000 consumers in a study specifically designed to test the link between customer satisfaction and business performance.<\/p>\n

The ICS study found that:<\/p>\n

\n

Amazon had the best customer satisfaction (91.7) and achieved the strongest sales growth (20%).<\/span><\/p>\n

By contrast, the four retailers with the lowest customer satisfaction all suffered a serious decline in sales. Comet posted the biggest sales fall (-14%) and scored lower customer satisfaction than most retailers in the survey (71.7).<\/span><\/p>\n<\/blockquote>\n

Perhaps this result isn\u2019t surprising. In the battle between \"9044202806_42bcb98ac3\"Amazon and Comet it\u2019s easy to argue that there are other factors at work.<\/p>\n

So let\u2019s take a look at a more straight-forward comparison. How about supermarkets?<\/p>\n

The 2012 ICS report showed that:<\/p>\n

\n

The two food retailers with the highest customer satisfaction ratings were Waitrose and Aldi, both scoring 84.6.<\/span><\/p>\n

Despite having very different models and target customers, they also achieved the greatest gains in market share over the Christmas period \u2013 Waitrose by 0.2%, Aldi by 0.4%.<\/span><\/p>\n<\/blockquote>\n

Sustained Growth<\/h2>\n

At the time of the report the ICS were able to draw a clear link between customer satisfaction and sales growth. But could that be quirk of the data? And does it play out over the longer term?<\/p>\n

Grocery News recently published the Kantar supermarket industry growth figures for 2013-2014. These latest figures not only support the previous finding that customer satisfaction drives growth, but emphasise them even more strongly.\u00a0 Aldi not only grew its market share faster than any other supermarket, but significantly out-grew its closest competitor, Lidl \u2013 who had a lower customer satisfaction score in the 2012 report. And at the other end of the market, Waitrose grew their share faster then any other non-discount supermarket, including Sainsbury\u2019s and Tesco, who again showed lower customer satisfaction scores in the 2012 report.<\/p>\n

British Supermarket Share<\/strong><\/h3>\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Supermarket<\/td>\nOctober 2014<\/td>\n\u00a0\u00a3 Billion<\/td>\nOctober 2013<\/td>\n\u00a3 Billion<\/td>\n% Change<\/td>\n<\/tr>\n
Aldi<\/td>\n4.8%<\/td>\n1.17<\/td>\n3.8%<\/td>\n0.92<\/td>\n+27.3%<\/td>\n<\/tr>\n
Lidl<\/td>\n3.5%<\/td>\n0.85<\/td>\n3.0%<\/td>\n0.72<\/td>\n+18.1%<\/td>\n<\/tr>\n
Waitrose<\/td>\n5.2%<\/td>\n1.25<\/td>\n4.9%<\/td>\n1.17<\/td>\n+6.8%<\/td>\n<\/tr>\n
Asda<\/td>\n17.2%<\/td>\n4.16<\/td>\n17.3%<\/td>\n4.20%<\/td>\n+1.0%<\/td>\n<\/tr>\n
Co-op<\/td>\n6.4%<\/td>\n1.55<\/td>\n6.4%<\/td>\n1.56<\/td>\n-0.4%<\/td>\n<\/tr>\n
Iceland<\/td>\n1.9%<\/td>\n0.46<\/td>\n2.0%<\/td>\n0.47<\/td>\n-0.7%<\/td>\n<\/tr>\n
Morrisons<\/td>\n11.6%<\/td>\n2.66<\/td>\n11.9%<\/td>\n2.71<\/td>\n-1.8%<\/td>\n<\/tr>\n
Sainsburys<\/td>\n16.1%<\/td>\n3.92<\/td>\n16.7%<\/td>\n4.04<\/td>\n-3.1%<\/td>\n<\/tr>\n
Tesco<\/td>\n28.8%<\/td>\n7.01<\/td>\n30.1%<\/td>\n7.27<\/td>\n-3.6%<\/td>\n<\/tr>\n
Total<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n+0.7%<\/td>\n<\/tr>\n
Inflation<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n-0.2%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n
Source: grocerynews.org via Kantar<\/div>\n

So customer satisfaction scores collected in 2012 were a successful indicator not just of growth in that year, but of sustained growth in the following years. It\u2019s the reason some of biggest, fastest growing and most successful companies on the planet are obsessed by customer satisfaction.<\/p>\n

Saga Holidays were another of the companies that were rated in the 10 top for customer satisfaction in the UK. In their 2013 Annual Report one of the very first things that Andrew Goodsell, the Chief Executive, noted was how proud he was that they had retained their position at the top of an Ipsos Mori customer satisfaction survey. The only thing he mentioned above that was the fact they\u2019d grown their turnover by 6.4% to \u00a32.2 billion and their profit 4.9% to \u00a3621 million!<\/p>\n

Customer Satisfaction for Every Business<\/h2>\n

If it works for the big companies, what does it mean for the rest of us?<\/p>\n

Regardless of company size, the fundamentals still hold. And it doesn\u2019t matter if you call it customer satisfaction, customer experience, customer delight or anything else. The more satisfied your customers are the more often they\u2019ll return and the more they\u2019ll recommend you to others. All of which drives sales growth without you having to spend an extra penny on advertising, marketing or sales.<\/p>\n

If you still need to see it to believe it, why not try it for yourself? Head over to\u00a0satsum.com<\/a>\u00a0for a free trial of the quickest and easiest way to start tracking and improving your customer satisfaction.<\/div>\n

References:<\/p>\n

\n

ICS Survey 2012:http:\/\/www.instituteofcustomerservice.com\/1768-8887\/The-missing-link-How-customer-service-drives-sales-and-market-share.html<\/a><\/p>\n

Saga \/ Acromas Annual Report:http:\/\/www.permira.com\/site\/report\/13\/13.pdf<\/a><\/p>\n

grocerynews.org\u00a0http:\/\/grocerynews.org\/2012-06-16-08-27-26\/supermarkets-market-share\/grocery-stores<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

You\u2019ve been told you should be measuring your customer satisfaction, but you\u2019re wondering if it\u2019s really worth it. Or, maybe you\u2019re trying to drive sales growth and wondering whether improving your customer satisfaction will help. Well the short answer is “yes, customer satisfaction has been proven to drive sales growth.” Improving your customer satisfaction really… How Customer Satisfaction Drives Sales Growth<\/span><\/a><\/p>\n","protected":false},"author":54,"featured_media":1677,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"","neve_meta_content_width":0,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","footnotes":""},"categories":[85,81],"tags":[837,455,838,839],"class_list":["post-1675","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-organization","category-strategy","tag-customer-sastifaction","tag-customer-service","tag-ics","tag-institute-of-customer-service"],"_links":{"self":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/1675","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/users\/54"}],"replies":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/comments?post=1675"}],"version-history":[{"count":3,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/1675\/revisions"}],"predecessor-version":[{"id":1695,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/1675\/revisions\/1695"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media\/1677"}],"wp:attachment":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media?parent=1675"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/categories?post=1675"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/tags?post=1675"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}