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Customer Surveys - The Link to Loyal Customers

Updated on June 5, 2015
Customer Loyalty - A Key Performance Metric
Customer Loyalty - A Key Performance Metric | Source

Surveying a customer is the deliberate activity by a business to understand their customers level of either satisfaction or disapproval of services they offer. This type of information is gathered discreetly or in open campaigns using a variety of methods.

Customer loyalty is the conscious decision by a customer to continue purchase goods and services from a particular business even though their may be competitors that offer lower prices or better products. The motivations associated with such practices are driven by many factors, but are usually a reflection a company’s capability to distinguish their business from the competition.

Customer surveys need not be costly for the business, but should have a specific objective such as to improving relations with customers or upgrading their products to meet or identify evolving market opportunities. Ideally, performing customer surveys should be a routine event to ensure the company is responsive to customer needs. Customers will reciprocate by being loyal to the business, providing referrals, and communicating their satisfaction in the marketplace.

Customer loyalty and satisfaction are positively correlated with the revenue growth and profitability. The measurement of customer loyalty and satisfaction should be actively managed by business owners and should never be allowed to decline of deteriorate. Primarily because the cost of acquiring new customers (customer acquisition cost) is more expensive than servicing existing customers. In short, loyal customers are more profitable.

In contrast, moderately satisfied customers (a rating of 3 out of 5) will not be strong advocates in the marketplace, even though they will continue to transact with them. Customers in this category represent an opportunity foe a company to improve their performance.

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Customer Survey Objectives

The final category of customers are those who are unsatisfied with the company and will most likely leave them for a competing product or service. Businesses should assess the viability of enticing them back or letting them go because they may have already decided to leave irrespective of any last minute efforts. Studies show that companies should focus on:

First Impressions

Customers evaluate their first contact with the business very highly. Therefore, businesses should ensure the customer experience for new customers is engaging and satisfying to begin building customer loyalty from the first impression.

Customer Service

The ability to make customers feel special and appreciated is related to how employees feel about the company. Happy employees provide exceptional service and they are a critical part of forming a strong bond with customers and building long-term customer loyalty.

Customer Loyalty Programs

Companies should reward loyal customers for their feedback, purchases, and referral of new customers. Loyal reward programs, when properly implemented, can increase sales volume customer satisfaction. Conversely, non-existent or missing customer loyalty programs provide competitors with an excellent opportunity to acquire new customers especially when switching costs are low.

The above categories represent key areas for managers to focus on and data collection from customer surveys is a good tool to evaluate business performance in each area. In addition, another key metric to evaluate related to this topic is the cost of acquiring a customer.

Customer Value is the Key to Profitability
Customer Value is the Key to Profitability

Why is the Customer Acquisition Cost Important?

According to Wikipedia, the Cost of Customer Acquisition (CoCA) is the cost associated in convincing a customer to buy your product or service. The CoCA is the total cost is incurred by the organization to convince a potential customer to purchase. This cost is inclusive of the product manufacturing cost as well as costs associated with research, marketing, and fulfillment. The CoCA is an important business metric and should be reported to management on a routine basis. It plays a major role in calculating the value of the customer to the company and the resulting return on investment (ROI) of acquisition. The calculation of customer valuation helps a company decide how much of its resources can be profitably spent on a particular customer. Fundamentally, his metric helps to decide the worth of the customer to the company.

How To Perform a Customer Survey

Develop Survey Questions
Collect Customer Contact Information
Identify Incentives (if any) for Participation
Determine Survey Method (email, paper, or telephone)
Launch Survey/Collect Data
Analyze Data
Develop Plan(s) to Address Concenrs/Problems
Monitor Progress and Results
Develop Key Performance Metrics
There are many ways to conduct a customer survey and their are several products offered in the marketplace to assist companies performing customer surveys.


In summary, loyalty describes the degree to which customer choose to continue to purchase products and services from their existing supplier. The link to customer loyalty is the ability understand customer needs and ultimately exceed their expectations. The process of understanding customers begins with collecting information in the form of a survey (online, internet, focus groups, or telephone). Customer loyalty is deeper than just satisfaction because satisfied customers may not necessarily be loyal; therefore, the cost of maintaining a customer is equally important.

Collaborate with Us

If you are interested in learning more about performing customer surveys or receiving a spreadsheet on calculating your customer acquisition cost, send us a note. For information on related topics, you can subscribe to our newsletter here.

Supplemental Reading

  • Go to Market Strategy: How Much Are Your Customers Worth?

    Assign resources based on customer value.

  • 4 Business Metrics You Can't Afford to Ignore |

    Profit and revenue tell you a lot--but they don't tell you everything about the health of your business.

  • New Rules For E-Commerce -

    Guest post written by Will Hsu Will Hsu is co-founder of MuckerLab, a Los Angeles-based startup accelerator.


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