The Benefits of Providing Good Customer Service, Essay Example

One of the greatest benefits of customer satisfaction is that satisfied customers become brand ambassadors and often provide valuable word-of-mouth marketing to the company. Another benefit of satisfied customers is that they help reduce operating costs. First of all, there will be lesser need for marketing. Second, satisfied customers are more likely to remain loyal to the company which lowers the need to acquire new customers. It costs more to acquire new customers and establish relationship with them than retaining existing customers (Business Case Studies). Satisfied customers also help ease competitive pressure on the company and may give it greater pricing power. Ensuring that customers are satisfied becomes an even more important goal in an environment of intensive competition. First of all, customers have wide range of choices so they may easily switch to the competition. Second, just as satisfied customers help spread good word about the brand, unsatisfied customers may also spread negative word about the brand and result in valuable loss of potential customers.

Companies should invest in customer satisfaction research because it helps the company better understand customers’ perceptions of the company and/or the products and services. The research may also reveal the strengths and the weaknesses of the company and its products and the insight could be used to strengthen competitive position. The company may also better understand the relative importance of different factors such as product quality, pricing, customer service, and distribution channels etc. to the customers and may devote more resources and efforts to the factors more important to the customers. The customer satisfaction research may also yield new insights that the company could use to further strengthen customer satisfaction and loyalty.

Reference

Business Case Studies. (n.d.). The benefits of providing good customer service. Retrieved July 4, 2014. Web.