Why Satisfying Customers Is Not Enough

David StewartMay 4, 202230064 min

Customer satisfaction is all the rage. There are dozens of books on the topic and whole consulting practices devoted to helping firms find ways to improve customer satisfaction. Academic journals are filled with papers that seek to carefully parse the determinants of satisfaction and define its antecedents and consequences. Companies appoint people to positions with titles such as chief satisfaction officer and director of customer delight. There are few concepts in business that are as sacred as the need to satisfy customers. But what does customer satisfaction really do for a business?

Of course, truly dissatisfied customers are unlikely to do business with a firm in the future. At the extreme, a dissatisfied customer can be a terrorist damaging the reputation of a business, diverting attention of personnel from more productive pursuits, and even doing physical damage. These are good enough reasons for assuring some minimal level of customer satisfaction, or deciding not to do business with customers you cannot satisfy, but what returns does real customer satisfaction produce for a business? The answer, demonstrated in study after study, is not much.

A satisfied customer will consider doing business with a firm again. Nothing more.

While failure to satisfy a customer will likely lead to a loss of that customer, satisfaction means only that the customer will consider the product or service of the firm the next time they purchase, along with other alternatives also thought to be satisfactory. There is really nothing that distinguishes a product that just meets expectations. So, the satisfied customer buys another, different “satisfactory” product that is on deal, is conveniently available, or is “new” with the promise of being better.

But what about the customer whose expectations are exceeded? Does exceeding expectations produce positive outcomes for the firm? Isn’t this why firm’s measure and try to maximize the “top boxes” on satisfaction surveys, that is, the number of customers who give the firm a “4” or “5” on a five–point scale? Unfortunately, research has shown that a “4” on a five–point satisfaction scale is merely “satisfied.” It does not matter that it is near the top end of the scale nor does a label like “very satisfied” mean much. A firm or product that is receiving “4’s” may seem like it is delivering a high level of satisfaction but that is not how consumers use such scales. A “4” on a five-point scale is no cause for celebration or complacency. A “4” means the product or service performed as expected and will be considered at next purchase occasion along with all the other “satisfactory” alternatives.

Recognition of the limitations of customer satisfaction has produced a new vocabulary and set of measures ranging from “customer delight” to “willingness to recommend.” There have been calls for firms to create “raving fans,” which is the title of a popular book on customer service. Some firms are able to do this – Apple comes to mind. But most products and services are too mundane and too trivial a part of the customers’ lives to produce “delight”.

The reality is that most products and services have a greater potential to disappoint than to delight.

Does this mean firms should give up the quest for customer satisfaction? No. It is important that customers be satisfied, but it is also important to recognize that satisfaction alone will not produce a loyal customer. There is a need for firms to develop and promote other reasons for the consumer to select an otherwise satisfactory product over other “satisfactory” products. Such reasons might include a unique feature, identification with a specific benefit or use occasion, something new, or just a high level of comfort and trust. This is a reason for continuous improvement and innovation. Brands and loyal customers are important assets of a firm, but like other assets, they must be actively managed.

Make no mistake. Satisfaction is important but it is not a substitute for innovation, differentiation, and strategic action. I am told my great grandfather had a horse with whom he was satisfied and even delighted; but he bought an automobile anyway.

Contributed to Branding Strategy Insider by: David Stewart, President’s Emeritus Professor of Marketing and Law at Loyola Marymount University is Los Angeles. He is also a past editor of the Journal of Marketing and author of Financial Dimensions Of Marketing Decisions.

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