Measuring the Financial Value of Customer Satisfaction
Succeeding in the service delivery and product quality results most often in high customer satisfaction.
But what does high customer satisfaction exactly mean from the point of view of sales? How could it be quantified or the monetary value identified in comparison to lower levels of satisfaction? The presumption that high customer satisfaction leads to more, or better sales is naturally correct if we concentrate on the “big picture”, but things are likely to get tricky once we try to determine the exact difference in monetary value between high customer satisfaction and low customer satisfaction.
If I ask the following question: “Could you determine the difference in expenditure between the high satisfaction and low satisfaction customers at your business on an annual basis?” Most would be unable to give the correct answer, because it is virtually impossible to identify the difference in monetary terms, unless it has been systematically researched and measured.
A lot of academic and non-academic articles have been written about customer satisfaction, but very few have addressed and concentrated on this point of view…