In order for a business to be successful, there must be customers. The definition from the Business Dictionary Definitions, 2013, Customers are considered those who obtain goods or services. Clients may be viewed as those who seek professional advice or guidance. Those who acquire, or agree to acquire, ownership (in case of goods), or benefit or usage (in case of services), in exchange for money or other consideration under a contract of sale are buyers or purchasers.
The purpose of this paper is to investigate the application of measuring customer satisfaction and to demonstrate how a competitive marketplace competes for customer satisfaction. The key element to differentiate business strategy is customer satisfaction. Giving the customers the opportunity to provide feedback on their overall satisfaction level is critical. "Customer wants and needs drive competitive advantage, and statistics show that growth in market share is strongly correlated with customer satisfaction." (Evans, 2010) When a customer has an outstanding experience, they then buy more and tend to be loyal and they then tell their friends and their friends tell their friends, this is more valuable to a company than other customers, and is tied directly to profitability. A well-established research by Bain & Company found that, for many companies, "an increase of 5% in customer retention can increase profits by 25% to 95%" (Bain, 2000). This same study found that it costs 6 to 7 times more to gain a new customer than to keep an existing one. Furthermore, one bad experience can outweigh a whole lot of good experiences. These days with social media, bad experiences can quickly be broadcasted to hundreds or even thousands of other customers that then can magnify its impact and negatively impact on the business. Therefore, it is very important to know right away if the business is doing something that frustrates the customers.
Identification of best practices
Today, competition is fierce, and with many options that customers have, smaller companies have a tough time trying to gain market shares. Per Evans & Lindsey (2008) in managing Quality, "To create satisfied customers, the organization needs to identify customers' needs, design the production service systems to meet those needs, and measure the results as the basis for improvement" (pg. 190) A loyal customer will do whatever it takes to do business with the company regardless of the price of the goods or services. So, if a company wants to engage the customers they need to build customer loyalty.