Find out the difference between satisfied customers and highly satisfied customers and the impact on your business.
I was recently reading a Harvard Business School case study on Starbucks.
Being one of the few people who do not drink coffee, I am not the most frequent Starbucks customer. But, the wireless internet access and Chantico drinking chocolate have gotten me in there regularly.
But I digress.
The study talked about many facets of the success of Starbucks. The part that interested me most was the difference between satisfied customers and highly satisfied customers.
For ages, many businesses have aimed for customer satisfaction. However, the pot-of-gold is in the highly satisfied category—getting each and every customer to not only be loyal, but also to recommend your brand.
As you wrestle with the payoff of enhancing your customer service training investment, consider these findings in the study:
- The satisfied customer visits 4.3 times per month, spends $4.06 and is a customer for 4.4 years.
- The highly satisfied customer visits 7.2 times per month, spends $4.42 and is a customer for 8.3 years.
Doing the math, the satisfied customer spends $209.50 per year and is worth $921.78 over the span of their 4.4 year customer life. The highly satisfied customer spends $381.89 per year—an increase of $172.39 or 82 percent more per year—and is worth $3,169.67 over the span of their 8.3 year customer life.
Now, while I was born at night, it wasn’t last night. As the old saying goes, the most powerful force is compound interest. In our case, the most powerful force is getting customers to highly satisfied—an 82 percent sales increase if you can move each customer from satisfied to highly satisfied. Show me another inexpensive (if not free) way to increase your sales 82 percent!
Since many of your customers are already in the highly satisfied category, you won’t see an 82 percent increase. However, reallocate your efforts (and dollars)—stop trying to attract new customers or get the unsatisfied ones to satisfied. The big lever is moving the customers up to highly satisfied and your sales will follow.
Be distinct or become extinct and watch those highly satisfied customers help you make the competition suffer—and your sales grow!
About the Author
T.J. Schier is a service professional, consultant and speaker with over 20 years experience in operations and training. Founder and president of Incentivize Solutions and podTraining, T.J. has helped numerous clients enhance their service and training programs and spoken to tens of thousands of managers, franchisees and operators in various fields.