Why do organisations conduct customer satisfaction research?

One of the great things about teaching an undergraduate course in market research is that it makes you re-visit fundamental questions, such as “Why do organisations conduct customer satisfaction research?” The flippant answer would be because a) everybody else does and b) the textbooks say you should. But if we address the question properly, I think the answer is something like: The Business Case There is a widespread belief that: Satisfied customers are good for business Dissatisfied customers are bad for business Key assumptions, factors and beliefs Customers have choices, if they don’t like what you are offering they can take their business elsewhere. Acquiring new customers is more expensive than retaining existing customers. Satisfaction makes re-purchase more likely and leads to positive word-of-mouth (WOM). Dissatisfaction makes re-purchase less likely and leads to negative WOM. Customers can tell you useful things about your own products and services, including how to improve them and how to meet unmet needs. The process of engaging and empowering the customer is itself a good strategy for improving brand equity/loyalty/affinity/love Note, many of the assumptions above may not actually have been tested in your specific business and may not always be applicable. However, they are […]