Client Satisfaction: A direct impact on the bottom line

Client satisfaction is at the heart of business success, even though its real impact on the bottom line has been virtually impossible to measure and quantify. Do happy clients really translate into bigger profits? And do they have the potential to improve business growth? The answers to these questions have vexed many a business leader for years.

But it doesn’t have to! nlighten is currently testing a predictive model as a way for businesses to measure and track client satisfaction, using what we call a Return on Client SAT Index (ROCSI). We have devised a way to track client satisfaction scores and sales over time and have found that consistent client satisfaction does appear to improve sales. Working with our B2B clients, we ran a time series regression model to predict sales based on client satisfaction and time (trends). Setting certain assumptions as points of departure, and based on the further assumption that no disruptive or other variables would influence one another, the results suggest that client satisfaction can predict sales over time.

In short, our model has shown that higher levels of client satisfaction (an average CSI score of 70%) over a period of time (a minimum of two years) measurably leads to higher sales.

What we are suggesting is that linking customer service to sales is an attempt to enable marketers to account for their marketing effort and justify spend. But bear in mind, for sales and client satisfaction to be linked, there must be consistent service over a period of time if a clear correlation is to be seen (this is called a lag effect). Once the correlation is established, any decline in client satisfaction would not necessarily suggest a decline in sales because brand equity will have been established over the period in question.

Of course, using only client satisfaction to predict sales does have its limits, because various factors influence sales (for example, workforce, economy and brand equity). Moreover, various factors that are not included in our model come into play in predicting sales. But the statistical analysis shows that by merely linking sales with client satisfaction over time, it is safe to conclude that high levels of client satisfaction can lead to a considerable increase in sales over time—an increase of up to 30% is entirely feasible.

That is a dramatic improvement to any bottom line in today’s global economic reality, in which marketers are increasingly expected to rationalise their objectives for the allocation of marketing budget. Using the ROCSI model monthly, quarterly or biannually can quantify the contribution marketing makes towards the success and sustainability of an organisation, vindicating its continued relevance in the world of business.


View another nlighten article by Nathalie Schooling: How Customer Experience Impacts Bottom Line Growth

nlighten. enhancing customer experience: www.nlighten.co.za