If you’re like me and you hardly ever use SMS as a means of communication anymore, most likely your message inbox would be full of ads.
For example, if you use the same cellular provider as mine, I’m pretty sure you have seen an ad about an e-commerce website delivered to your inbox.
A few days ago, a friend of mine posted a screenshot of an ad being shown just before he was redirected to the site he was meant to visit – which was pestered by the internet service provider (the one that has the biggest network coverage in Indonesia but with the worst quality – I hope you know which provider I’m talking about without me having to call out its name).
These so-called forced advertisements can also be found on some of the most popular national news sites in the form of probably the largest popup ads possible that shroud almost the whole article, with probably the tiniest close button possible.
In theory, customer satisfaction would be very positively beneficial to a business. You can read the book Strategic Customer Service by John Goodman (2009) to get to know more about the theory.
This theory has actually been validated by many studies.
You can check one of them in a journal by Lien-Ti Bei (Professor of Dept. of Business Administration National Chengchi University, Taiwan) and Yu-Ching Chiao (Assistant Professor of Dept. of Business Administration, National Chung Hsing University, Taiwan).
If you still have doubts about this particular theory, the following are some statistics of the studies conducted by various institutes that I’ve found.
1. For every 1 customer who complained, there were 26 other customers who were unsatisfied but decided to remain tight-lipped – Lee Resource.
2. 96% of customers who were unsatisfied would not complain, but 91% of them would just leave and never return – 1st Financial Training Services.
3. The cost needed to acquire new customers was 6-7 times more expensive than to get hold of old customers – Bain & Company.
Those are only a few statistical examples. You can peruse other more comprehensive statistics in 15 STATISTICS THAT SHOULD CHANGE THE BUSINESS WORLD – BUT HAVEN’T or in an article published by the Huffington Post.
There’s also one short essay that’s very compelling to read if you want to know more about it.
If you want to read more scholarly references, you can download these ‘short’ journals:
– Customer-Firm Relationships, Involvement, and Customer Satisfaction
– Service Quality, Customer Satisfaction and Loyalty: A Test of Mediation
Those are just a handful of theories and studies in the form of articles or journals that I could find and read in just 180 minutes. I believe you can discover a lot more if you want to allocate more time to learn further about it.
If all these theories and studies are valid, and you agree with my point, the big question is: why are there still many companies that seem as if they don’t care about customers’ needs at all?
Alas, I also don’t know the definitive answer, LOL…
However, there is one theory and fact which state that the greater bargaining power an organization or a company has, the less it needs to comply with customer satisfaction.
Bargaining power can be increased in many ways. In that scenario of my internet service provider, the fact that it has the biggest network coverage in Indonesia puts the customers in a position where they don’t have any other choice if they want to have access to the internet.
This is what we call oligopoly, where the market is in full control of only a few vendors – or perhaps monopoly if we’re considering the fact that my internet service provider is the only one with full network coverage of Indonesia.
In addition to oligopoly, another aspect that can build up bargaining power is customers’ investment – whether in the form of time, energy, or money.
The case of my cellular network provider can also be scrutinized through this perspective. For starters, I have been using the same phone number since 2005 – which means that every friend, colleague, and acquaintance I have in the last 11 years know that number. Ergo, I can’t just simply change my number although I’m very tired of receiving text ads every day.
Nevertheless, if we want to be fair and look at this through the lens of the company’s interests, I can understand how it has become a priority for a company to make profits. I’m personally not in any way anti-ads or anti-profit.
If you have read all the articles in zilbest.com, you should also know that there are some sponsored articles that I made as a way to get revenue because, as a matter of fact, my family and I need money to buy food (and games, hahaha), and other things also need resources to keep going.
Having said that, I’m trying to make a living in a different way. I didn’t put up any display ads (or worse, gigantic popup ads) because I myself am embarrassed with it – plus, I worked for a magazine company for some time, which made me a little bit sensitive when I see a visual design that’s chock-full of ads.
I’m more comfortable with incorporating ads into the content since the visual would still look good, and you, as readers, would still get useful information.
Be that as it may, I know that I can never please everyone since there are still some people who just can’t stand ads at all, even though the ads have been undermined.
Truth be told, my intention isn’t to please everyone because pleasing everyone is, in fact, can only be done through lying. My decision is solely based on my personal idealism in terms of delivering content and making profits.
Yet my condition is obviously very different from what companies are facing, and therefore it’s impossible for them to apply the same idealism since there are a lot more concerns to be considered.
Bigger companies should take into account the large sum needed to pay their employees. Not to mention there are also investors, which means there’s capital plus interests that need to be repaid within a certain period of time.
Moreover, if we want to look at things through a business perspective, I’m quite certain that, in the context of the cellular provider that I mentioned at the beginning of this article, the e-commerce site wouldn’t be as popular as it is right now if it wasn’t crammed inside the text ad that was delivered to tens of millions of customers regularly.
This means that the text ad, whether or not we as customers are okay with it, is very valuable to the company since marketing and brand awareness are difficult as well as expensive.
Ultimately, before you and I are getting drowsy, I think that all of this needs compromise, but the most ideal way to strike a balance between reaping profits and satisfying the customers is really tricky and needs time to be formulated.
Luckily, or also unluckily, we are all pressed for time. Taking too long to find the happy medium can have a negative impact that’s as dire: being abandoned by customers or running out of the capital to advance further – or probably both since those two are very related to each other.
Even when bargaining power is secured already, the market map can change because new competitors will always emerge sooner or later.
In spite of everything, I don’t know, maybe I’m still too unfamiliar about business and that my experience as customers has only been around for 8 years. But what I aim to do with this article is to trigger your curiosity toward the impact of customer satisfaction on paving the future of a company or a product.
So, have fun learning!
Jakarta, November 20, 2016
Yabes Elia
Translated by Glenn Kaonang
