If You Do One Thing to Improve Customer Satisfaction, Do This

Ben Gran, The Motley Fool


A cafe employee standing behind the counter and happily talking with two smiling customers.
A cafe employee standing behind the counter and happily talking with two smiling customers.

Image source: Getty Images

Many small business owners are worried about finding new customers, acquiring new customers, and selling to customers -- but are you spending enough time listening to customers?

It costs five to 25 times as much money to acquire a new customer (think of all the expenses of marketing, advertising, and sales) as it does to keep an existing customer happy. But many small businesses put too much effort into customer acquisition, and not enough into customer retention.

Let's look at how your business can get better at listening to your customers -- and why it matters for boosting your sales.

Ask your customers for feedback

Small business marketing tends to focus on talking to customers -- sending out email marketing, posting on social media, using search engine advertising to reach customers and put a message in front of customers. But are you listening?

Try to build this into your everyday business processes: ask your customers for feedback. This can be as casual as interpersonal conversations when customers are making a purchase, or more formal like customer comment cards. If your customers have agreed to share their phone number and email addresses with you, you could ask for feedback in simple ways by following up after a purchase. "How did your recent purchase go? Did we meet your expectations?"

Even simple, limited types of customer feedback can be helpful in uncovering larger issues or trends. Sometimes people are more willing to provide constructive feedback via email or text message than they are to tell you to your face. In case there's a problem with your business, or something that could be improved, or some way that your product is not meeting expectations, it often helps to be proactive and ask customers to share their opinions.

If your product is failing to meet customer needs or your business reputation is falling behind your competition, it's better to find out from customer feedback than from declining sales.

Conduct customer satisfaction (CSAT) surveys

Big corporations have sophisticated, data-driven ways of measuring customer satisfaction, or "CSAT," as it's known as a key performance indicator (KPI). Improving CSAT scores is an entire area of business expertise for larger companies. If customers are becoming less satisfied, that's a warning sign that a product line is suffering and that a brand might need to make big changes and invest big money to improve customer retention.

Your small business doesn't need all the corporate bells and whistles to measure CSAT. But you should at least have a ballpark estimate of how satisfied your customers are feeling with your products or services, and how your business can improve.

There are a few tools you can use to create simple customer satisfaction surveys, including:

You don't need a full-on, multi-page, scientifically valid survey. Your CSAT survey might not be statistically perfect and it doesn't have to uncover every last detail of how your customers feel. Sometimes a short survey will be more effective, because it's easy for customers to respond.

Even a quick, simple, non-scientific survey can help you learn more about how your customers think about your business, why they might keep buying from you, and what might motivate them to switch to your competitors. Be sure to ask some open-ended questions so customers have a chance to really be honest -- not just "yes or no" questions or five-point scales.

Bottom line

Small businesses have an important competitive advantage: Because of your small size, you are closer to your customers, and you have the opportunity to know them better than the big corporations. Be sure to listen to customers, as well as just "talk to" and sell to them.

Gathering useful customer feedback and using customer satisfaction (CSAT) surveys can help small businesses keep more of your best customers, improve your marketing, and deepen your existing customer relationships. Just listening to your customers can help unlock big insights into how your business can grow and thrive.

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