Acquiring new customers can be a goal in its own right, but your efforts should not stop there. Once they are customers, you can begin a new type of relationship based on commitment. In return for their money, your customer now expects you to meet their needs.
There are different ways of meeting the same need and different ways of maintaining your customer relationship, which you must do to gain their loyalty.
Deliver a Shopping Experience That Meets Your Customers' Expectations
To better understand customer satisfaction, consider this:
Satisfaction = lived experience − expectations
Some customers naturally have high expectations and some lower. Some even have negative expectations! In any case, if you deliver a customer experience that is lower than customer expectations, they will be dissatisfied.
In addition to striving to deliver the best possible experience, you can play on the customer's expectations.
Be careful not to create expectations beyond what you can deliver.
By contrast, don't set expectations that are intentionally lower than what you can deliver. You will ensure positive customer satisfaction, but you'll also have a harder time acquiring customers if you under-sell your offer.
Find a balance between over- and under-selling your product. You should describe your offer accurately before the sale and provide just a bit more than what you committed to during and after the sale. 😀
Promise delivery within five days and do it in three.
Add a gift to the package.
Offer a promotion on the next purchase.
The least you can do is to ask the customer if they were happy with their purchase. Even if they were not completely satisfied, the simple fact you asked shows that you're attentive and want to improve. If the customer decides that they don't like some part of your service, you're allowing them to express their frustration rather than having it build and talk to someone else.
Measure Customer Satisfaction
There are several ways you can measure customer satisfaction (or dissatisfaction). I'll introduce you to two of them.
Measure Customer Satisfaction With CSAT
The CSAT (Customer Satisfaction Score) is the first and most popular method. You may not know it by that name, but you have certainly used it as a customer before.
The CSAT simply asks your users or customers to give you a score from 1 to 5:
Not at all satisfied.
This method allows you to collect data that is relatively easy to process and requires minimal effort from your customer.
If a customer finds that your product or service was not satisfactory, you can ask them what they didn't like. To do this, allow them to explain why they are dissatisfied in an optional text field. You will collect quantitative feedback (score out of 5) and qualitative (an explanation of the problem).
The NPS (Net Promoter Score) is another method that asks how willing the user would be to recommend your product to their friends or colleagues on a scale from 1 to 10.
This method is slightly different because the question asks the user's satisfaction and if they think their friends would like it. It makes it possible to measure the probability that the user will become an ambassador for your offer. The question is also an implied invitation to recommend your product.
Ultimately, it's not the case that one of these two indicators is better than the other; they just measure slightly different things:
The satisfaction of a user at a specific time (CSAT).
The likelihood that this user will recommend you, in general (NPS).
Turn Satisfied Customers Into Brand Ambassadors
They say that happy customers are the best sellers. To turn your customers into ambassadors, you must make their enthusiasm for your product contagious.
To achieve this level of loyalty, the user must find your product rewarding, and your relationship must go beyond the transaction. Your customer must be emotionally invested in your business to the point of identifying with your brand. A strong brand image at this stage can make the difference.
If you've ever spoken with an Apple products fan, you know what I'm talking about.
Enthusiasm for Apple products breaks records.
It's sometimes referred to as evangelist marketing, which refers to all marketing techniques that aim to create more than trust: a real faith in a product or a company (hence the religious terminology).
The value Apple has that resonates with so many people is creativity. By articulating its brand image around this value, Apple's message speaks to all consumers who aspire to live a creative life.
Not all organizations have the resources to build a brand platform as powerful as Apple's. If yours isn't so lucky, other techniques may be easier to implement to retain your customers and turn them into ambassadors.
Two examples are the share button and sponsorship programs.
Note that the loyalty and recommendation mechanisms work best when you reward your user. These rewards can have financial value (e.g., lower prices depending on loyalty) or social (e.g., the pleasure of giving).
Some referral programs go as far as paying users for each referral, which is the case with Uber when they launched their food delivery service (Uber Eats). Each time an Uber Eats customer referred another, they received a €10 discount on their order and gave a €10 discount on the referred person's first order. 🎁
Calculate Each Customer's Value
The customer lifetime value, or LTV, is the sum of the profits made from an average customer throughout the business relationship.
Think of it as a leading indicator because you wouldn't know how much your maximum acquisition cost for a customer should be without it. In other words, up to how much you could pay to acquire a new customer.
In theory, as long as you're below this maximum acquisition cost, your campaign will be profitable. 😌
There are different ways to calculate LTV. If you want the exact lifetime value of a customer, you'll need to consider about ten factors; this information is sometimes challenging to collect. For this introductory course, the approximate lifetime value of a customer will be enough.
Start by using the following simplified formula:
The approximate lifetime value of a customer = (average order value × average number of orders per customer) - average customer acquisition cost.
In the case of the Mimine online store, if:
The value of an average order is €60 (excluding acquisition cost), considering that the average cart is €100 and that the cost price of this average cart is €40.
Each customer on average orders two times.
The average acquisition cost of a customer is €10.
The approximate lifetime value of a Mimine customer is:
Customer = (60 × 2) − 10 = €110.
Logically, Arthur and Zoë do not lose money as long as their cost of acquiring a customer does not exceed €120:
Maximum acquisition cost of a customer = (60 × 2) = €120.
€120 to acquire a customer? That's a lot! 😮
Remember that this limit depends on the average number of orders per customer. Arthur and Zoë estimate that customers will each order twice, which is very optimistic. If customers only order once each, on average, the maximum cost of acquiring a customer will also be divided by 2. They would then start losing money as soon as they pay more than €60 to acquire a customer.
So to increase the profitability of their online store, Arthur and Zoë can:
Retain their customers so that they come back more often.
Increase the average value of an order by increasing the average basket or lowering the cost price.
Lower their acquisition cost.
Your customers can become your best sellers. For this, you must:
Ensure that they are highly satisfied by offering an experience that meets their expectations.
Measure this satisfaction so you can maintain and improve it over time.
Retain your customers by asking them to buy again or recommend you to others.
Calculate the value of each of your customers so you can create a marketing and retention plan.
Congratulations! You're now ready to roll out your marketing action plan at each stage of the sales cycle and optimize its performance.
You've reached the end of this course! I hope you had a rewarding and enjoyable time.
First off, you learned how to define digital marketing and recognize the right applications for it. Then you discovered how to create your own digital marketing plan. Finally, in this last part, you got some keys to move towards action and get results throughout the sales cycle. Take one last quiz to see how much you learned in this last part.
I enjoyed creating this course! Thanks for joining me!