Member Article

The satisfied customer paradox

Satisfied customers lead to a successful business. This is a hypothesis that many of us take for granted. However, recent research has shown there’s more to it than that. The study indicates there is no correlation between satisfied customers and business results.

Also, a negative correlation exists between satisfied customers and market share. The satisfied customer paradox is almost like a parabola: a small company tries to please its customers, an attitude that builds your market share. At that point, chances are you will create dissatisfied customers and lose market share. This company life cycle has become shorter over the years.

Satisfied customers may be the beginning of the end Many companies aim to keep their customers happy. Small companies understand that their only chance to conquer the market lies in offering a fantastic customer service. It’s in their DNA to go the extra mile for their customers. This approach works in many cases. Success leads to a bigger organization, more procedures, less motivated employees and a deteriorating customer­first attitude. Of course, there are exceptions but I’m sure you’re familiar with this vicious cycle. In other words, the end goal should not be to increase market share. The end goal should be to keep the client­first DNA in your organization, even with an increase in market share.

The satisfied customer paradox is the biggest threat for incumbents

More than ever, incumbents are under attack from agile start­ups. It’s becoming increasingly hard to defend themselves against the rate of change those smaller companies bring. In addition, compared to a decade ago, the market is more open to welcoming new players. Too many incumbents settle for an average customer relationship. Their key focus is on managing financial indicators and customer relationship indicators often come second. Making the customer relationship your priority is the only way of averting the danger of a growing market share based on satisfied customers from the past.

Stay small, even if you are big

How to break the satisfied customer paradox? Well, there is only one way to do it: stay small, even if you are getting bigger. Try to organize your company in such a way that employees are willing to keep going the extra mile for your customers. It’s about having a back end that is aware of this approach, it’s about giving your front end staff the freedom to help customers even if this means a short term financial loss and it is also about installing a reward system based on customer satisfaction.

This was posted in Bdaily's Members' News section by Steven Van Belleghem .