Mehrzad Manuel Ferdows, leading entrepreneur and advisor, has given a speech on the importance of customer satisfaction.
Mehrzad Manuel Ferdows defined customer satisfaction as a measurement that determines how products or services provided by an organization meet customer expectations. He pointed out that customer satisfaction is one of the most important indicators of customer purchase intentions and hence more likelihood of their loyalty to the company. Winning clients’ hearts and being recognizable within target groups is the result of high-standard customer service so inevitably companies need to keep an eye on the quality of customer service especially in the modern business world where social media play such an important role in making decisions. Mehrzad Ferdows stated that companies that do not care about customer satisfaction cannot expect customers to care about services or products.
Mehrzad Ferdows quoted from La Barbera and Mazursky who said to achieve customer satisfaction, organizations must be able to satisfy their customers’ needs and wants (1983). Customers’ needs state the felt deprivation of a customer (Kotler, 2000). Whereas customers’ wants, according to Kotler (2000) refer to “the form taken by human needs as they are shaped by culture and individual personality”.
The Importance of Customer Satisfaction
According to some researches done in the field of customer satisfaction, it is 6 to 7 times more costly to acquire a new customer compared to keeping one. On average, loyal customers are worth up to 10 times as much as their first purchase. Mehrzad Manuel Ferdows stated that banks or mobile providers are examples of organizations who know the value of satisfied customers so they do not have any problems with going the extra mile for a customer who is not quite satisfied and offer him something special. The increasing recognition indicates that the ultimate objective of customer satisfaction measurement should be customer loyalty as high customer satisfaction will result in increased commitment for the firm and that customers will be less inclined to overtures from the competition. Mehrzad Ferdows reiterated that long-term customer retention should be primarily focused on by firms since businesses that exclusively focus on customer satisfaction run the risk of becoming an identical business whose customers believe only that it meets the minimum performance criteria for the category. Moreover, long-term customer retention in competitive markets makes the suppliers go beyond mere basic satisfaction and just building up ties of loyalty that will end in warding off competition.
Customer Satisfaction Helps with Generating Revenue
Mehrzad Manuel Ferdows emphasized the significance of customer satisfaction as a treasure in reflecting company revenue. Customers’ ideas and feelings about the brand can affect, in both positive and negative ways, the essential metrics-such as the number of mentions and repeated transactions, and also customer lifetime value or customer churn. He expressed that gratified customers will not look at your competitor’s offers-they will interact, make a purchase and recommend your product further. Meeting all their requirements and quickly fixing their needs while delivering the best quality of services will end in customer satisfaction. Therefore, a company’s sales will increase. Mehrzad Ferdows stated that measuring customer satisfaction is an all-time daily habit- not something being done from time to time or in the time of crisis.
Customer satisfaction does have a positive effect on an organization’s profitability. Satisfied customers form the foundation of any successful business as customer satisfaction leads to repeat purchases, brand loyalty, and positive word of mouth. Mehrzad Manuel Ferdows stated that numerous studies depict the importance of customer satisfaction. Coldwell’s (2001) study is an example of “Growth Strategies International (GSI) performed a statistical analysis of Customer Satisfaction data encompassing the findings of over 20,000 customer surveys conducted in 40 countries by Info Quest. The conclusion of the study showed that a totally satisfied customer contributes 2.6 times as much revenue to a company as a somewhat satisfied customer. A totally satisfied customer contributes 17 times as much revenue as a somewhat dissatisfied customer. A dissatisfied customer decreases revenue at a rate equal to 1.8 times what a totally satisfied customer contributes to a business”.
Consequences of Customer Satisfaction and Dissatisfaction
Mehrzad Manuel Ferdows pointed out that there are severe consequences of not satisfying customers. Dissatisfied customers may discontinue purchasing the good or service, complain to the company or a third party, and perhaps they return the item or abysmally they can engage in word-of-mouth negative communication. Repurchase is influenced by satisfaction whereas dissatisfaction has been seen as a prime reason for customer defection or discontinuation of purchase. Mehrzad Manuel Ferdows stated that customer loyalty is not a choice but the only way of building sustainable competitive advantage. It has been a core marketing objective to build loyalty shared by chief players in all industries catering to business customers. To build a loyal customer base, organizations need to focus on key customers, generate high levels of customer satisfaction with every interaction, anticipate customer needs and respond to them before a competition, build closer ties with customers, and finally create a value perception.
Mehrzad Manuel Ferdows concluded that though customer satisfaction does not guarantee repurchase still it plays a key role in ensuring customer loyalty and retention. It is a direct determining factor in customer loyalty and a central determination of customer retention particularly in the world of modern business where bad news travels faster than ever. Based on that, organizations should always strive to corroborate that their customers are satisfied to a maximized level.
About Mehrzad Manuel Ferdows:
Mehrzad Ferdows is a leading entrepreneur, advisor, investor, and industrial engineering graduate from the University of Southern California.