Customer satisfaction plays a large role in operating a successful business. In fact, maintaining it can be as important as revenues and profit margins. It can even be said that they are directly related. Though everyone understands the significance of providing a positive customer experience, it isn’t always consciously incorporated in the operating environment such as more tangible factors might be.
Vafa Akhavan, executive director of diversified solutions at J.D. Power and Associates, spoke about the dynamics of customer satisfaction in the auto rental industry at the Car Rental Show in September. Based on a number of J.D. Power syndicated studies, he examined car rental as compared to other industries to see where customer satisfaction factored in, and how it should be regarded in looking toward the future.
“What can we do to leverage customer satisfaction?” Akhavan asked those in attendance to consider as he opened his program. “How can we leverage customer experience to generate greater performance for our organization? Whether corporate or independent, it doesn’t matter.”
Dynamics of Customer Satisfaction
Akhavan explained that there are three essential elements of the customer experience in terms of how it becomes value for a business: the customer’s experience, the employee’s experience and the environmental experience. The environmental experience encompasses both the customer’s understanding of what’s going on and the employee’s perception of the working relationship.
In other words, it is the total experience — the customer, the employee and the market. A positive customer experience translates into increased acquisition and retention. If a customer has a positive experience, then the outcome would be the acquisition of a new customer. The customer with a positive experience is more likely to recommend the rental company. A customer with a great experience, and one who experiences consistency in that excellence, will become an advocate to others, therefore increasing acquisition without advertising expense. With a positive experience, a customer is more likely to return, which, as Akhavan explained, leads to retention of that customer.
In retaining a customer, an organization can likely expect that customer to spend more with them. And spending leads to market share and increased revenues. But acquisition and retention are also important with a business’ employees. If the employee enjoys a working environment, they are likely to stay in that environment, which is a driver for a more productive work force.
As it affects customers, that result generates revenue as well, and cuts costs, as hiring and training new employees requires time and money, in turn seeing less productivity on the whole. The customer experience then becomes a reflection of that employee’s experience. With the two experiences working well together, a business is likely to see profit and growth. “(You have) the value, market share and share of wallet from the customer side, revenues and costs from the employee side, and ultimately, that translates into better economic performance for you,” Akhavan said.