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Who do you think is the most important person in your company? No, it\u2019s not the CEO. Nor the CFO, CIO or CMO or any other employee on C-level. The most important person is the customer. In every company. That\u2019s why the focus should always be on the customer and why I help companies work on continuous improvement of customer-centricity, customer-friendliness, customer satisfaction, and customer loyalty. Because satisfied customers are good for the company.<\/p>\n
This sounds nice but is it also true? Is there a proven relationship\u00a0between customer satisfaction and profitability?<\/p>\n
Chris Denove and James D. Power IV, authors of the book Satisfaction, asked themselves the same question. They investigated the relationship between customer satisfaction and shareholder value in 29 different American listed companies. Denove and Power compared figures from 2004 with figures from 1999. Customer satisfaction could have risen, stayed the same, or dropped compared to the industry average. They also looked at shareholder value: it could also have increased, stayed the same, or decreased.<\/p>\n
Denove and Power made a discovery that far exceeded their most\u00a0optimistic expectation. The companies that had improved their\u00a0customer satisfaction compared to their competitors had seen their\u00a0shareholder value increase by more than 50 percent! Companies that\u00a0had seen customer satisfaction decline in the previous five years saw\u00a0shareholder value fall by 28%.<\/p>\n
A study in the American automobile industry shows comparable\u00a0figures. Customer satisfaction was measured among 50,000 owners\u00a0of a passenger car. Each car brand ended up in one of these three\u00a0categories after the investigation: low customer satisfaction, average\u00a0customer satisfaction, high customer satisfaction. What turned out\u00a0to be? Car brands with \u2018high customer satisfaction\u2019 had seen their\u00a0sales increase by more than 40% in the period 1998-2003. Brands\u00a0with \u2018low customer satisfaction\u2019 had seen their sales fall by 4%. How\u00a0is this relationship in your company?<\/p>\n
These figures indicate a strong relationship between customer\u00a0satisfaction and shareholder value and a strong relationship between\u00a0customer satisfaction and sales. I have no reason to believe that these relationships are different in other countries. To be absolutely sure, I would be happy to discuss ideas about a crossborder study to see the relationship between customer satisfaction and profitability\u00a0in companies all over the world. If you are interested, don\u2019t hesitate\u00a0to drop me a line to see how we can work things out.<\/p>\n
Frans Reichardt | The Customer Listener<\/p>\n
<\/p>\n<\/span>","protected":false},"excerpt":{"rendered":" The most important person is the customer. In every company.\u00a0That\u2019s why the focus should always be on the customer. Because satisfied customers are good for the company.
\nThis sounds nice but is it also true? Is there a proven relationship\u00a0between customer satisfaction and profitability?<\/p>\n","protected":false},"author":3,"featured_media":9956,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[181],"tags":[276,166,300,297,298,299],"class_list":["post-9954","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog-english","tag-customer-centricity","tag-customer-satisfaction","tag-increase-in-sales","tag-profitability","tag-sales-increase","tag-shareholder-value"],"yoast_head":"\n