Customer Satisfaction: Financial Performance

What Would It Mean If Your Organization Consistently Delivered An Exceptional Memorable Customer Experience?

Irrefutable evidence shows, companies that have the highest customer loyalty consistently outperform the rest of their industry in the following:

  • Higher sales growth
  • More profitable
  • Have more brand loyalty
  • More referrals
  • Customers are less price sensitive
  • Customers are more forgiving when something goes wrong
  • Advertise less
  • Are less affected by economic conditions
  • Higher employee engagement
  • Higher employee morale
  • Lower employee turnover

How do those results sound to you? Could your business benefit from some or all of those results?

**Related – Smart CEO’s, leaders, and executive teams who want to disrupt and revolutionize their industry, and ultimately make price irrelevant attend the Secret Service Summit

Satisfying The Customer Pays Big Dividends

You don’t have to look very hard to find proof demonstrating the financial benefits that companies with high customer satisfaction have over everyone else in their industry. According to research from the University of Michigan, customer satisfaction is directly linked to stock market performance. Companies with high scores on the American Customer Satisfaction Index (ACSI) produce higher stock returns than competitors and greatly outperform the stock market.

The study examined the correlation between customer satisfaction and financial success. Over a twelve-year period (April 2000 to April 2012) the top customer satisfaction companies’ stock value went up 390%, where the S&P 500 average stock went down 7%!  So if in April of 2000, you invested $100,000 in top customer satisfaction companies, your cumulative return would have been $390,000.   Compared with investing that same $100,000 in the S&P 500, you would have ended up with only $93,000, a loss of $7,000.

Price Does Not Create Loyalty

“Companies with highly satisfied customers generate superior returns because customer satisfaction is critical for repeat business, and that type of business is usually very profitable,” said ACSI founder, Claes Fornell. “That is, loyal customers tend to be highly profitable as long as their loyalty comes from their satisfaction and not because prices are low.” Let’s read that quote again. “Loyal customers tend to be highly profitable as long as their loyalty comes from their satisfaction and not because prices are low.”

Irrefutable Evidence Hospitality Pays Huge Dividends

Mad Money with Jim Cramer featured the “hospitality index”, demonstrating how the stocks of 17 companies who have mastered the art of hospitality compared with the rest of the market. The report looked at companies like Whole Foods, Amazon, Costco, Apple, Southwest, Nordstrom, and Bed Bath & Beyond. The results are incredible and irrefutable. From before the study started to its completion, the hospitality index outperformed the S&P by four times; the hospitality index gave you a 257% return to the S&P’s 65% return!

“These companies have demonstrated when you take care of your customers, they become more loyal, refer more, spend more, become less price sensitive, have higher employee retention, and lower turnover — which results in superior financial performances,” says Jim Cramer.

Students Lose Harvard Acceptance For Inappropriate Facebook Posts

At least 10 students who had been accepted to Harvard University have already learned an important lesson about real-life consequences for online behavior. They had their offers of admission rescinded after the college learned of their inappropriate Facebook posts. Their posts ranged from racist, bigoted, sexually explicit, or violent. This is a critical lesson our kids and employees need to understand; how their online behavior can have long-term ramifications in their lives.

Watch This Short Video Clip Of John Sharing: The Irrefutable Evidence That Brands Delivering World-Class Service Have Significant Financial Benefits

About The Author

John DiJulius

John R. DiJulius is a best-selling author, consultant, keynote speaker and President of The DiJulius Group, the leading Customer experience consulting firm in the nation. He blogs on Customer experience trends and best practices.

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