Value Builder Driver #7: Customer Satisfaction

Welcome to the latest episode of the Business Owner Breakthrough Podcast! This week, we’re diving into customer satisfaction, why it’s essential for boosting your business value, and actionable strategies to turn satisfied customers into loyal advocates.

In this episode, Pete Mohr breaks down:
→ How customer satisfaction directly impacts business value and buyer confidence.
→ The importance of Net Promoter Score (NPS) as a loyalty metric.
→ Strategies for creating a customer-first culture that drives retention.
→ How loyalty programs and feedback loops can improve satisfaction.
→ Why dealing with customer issues swiftly is key to long-term success.

Don’t Miss Next Week’s Episode:
We’ll wrap up the Value Builder Series with the Hub and Spoke concept, focusing on how to remove yourself from the center of your business operations.

Key Resources Mentioned:
→ Value Builder Assessment: Take the free assessment and get a personalized action plan to grow your business value: www.exitreadybusiness.com
→ Connect with Pete Mohr and learn more about building a sellable business: www.exitreadybusiness.com

Who This Episode Is For:
→ Entrepreneurs preparing to sell their business.
→ Business owners wanting to improve customer loyalty.
→ Anyone aiming to understand how customer satisfaction impacts business valuation.

Are you looking to make some changes in your business and your life in 2024?  Head over to speaktopete.com and book a chat with me to see if we're the right fit!

Maximize Your Business’s Value with the Value Builder Assessment!

As a business owner, do you know what your company is truly worth? The Value Builder Assessment is a powerful tool that helps you uncover the key factors influencing your business’s value. Whether you're considering a sale, planning for the future, or simply want to grow, this assessment offers actionable insights to increase your business’s worth and appeal to potential buyers.

Don’t leave your business’s future to chance. Click here to take the Value Builder Assessment and start building a more valuable, resilient business today!

Book a no charge Freedom Call with Pete, to see if you’re a good fit for his business coaching or talk to Pete about speaking at your next event head over to http://speaktopete.com to find a time that works for you!

Pete's Websites:

Pete-Mohr.com
The Exit Ready Business
Kolbe Coach
Simplifying Entrepreneurship

LinkedIn at https://www.linkedin.com/in/petemohr/
Instagram at ...

Transcript

0:00

Welcome back to another edition of the Business Owner Breakthrough podcast. It's our value Builder series. And in the last episode we discussed monopoly control and how becoming the leader of your niche increases your business's value. Well, today we're going to dig into customer satisfaction and how creating a loyal and a satisfied customer is one of the most powerful ways that you can boost your business's value. So why is customer satisfaction such a critical thing to your business value? Well, it isn't just about making customers happy. It directly impacts your bottom line and the perceived value of your business. When you have an awesome customer satisfaction rating. Because satisfied customers are more likely to become repeat customers. Right. Refer others and generate positive reviews. And all of these build trust and reputation, making your business more attractive to the bankers and the buyers. Because buyers want to know that the custom base is loyal and they'll continue to support the business after they take over as the new owners. Right? High customer satisfaction reduce risks for buyers, we're always trying to reduce risk and increase value. It's a reciprocal because it means the business has a long term revenue potential. So first off, are you even measuring customer satisfaction? And if you are, how are you measuring customer satisfaction? There's lots of different ways, of course. Your Facebook, your Google ratings, the ratings maybe if you have a web store on individual products and different things like that. But the best one from a valuation standpoint is the net Promoter score. It's called nps and it's one of the most widely used tools to measure the customer satisfaction of your business. And it asks a simple question, one simple question, and here it is. How likely are you to recommend our company to a friend or colleague? I'll say it again because it's really important. It's not, did you enjoy our service today? All this other stuff, it's this particular question. It's how likely are you to recommend our company to a friend? And then you put out the rating, and the rating is on a scale of 0 to 10. So the NPS score gives insight into how loyal your customer base is. Because a high NPS score indicates you have strong customer satisfaction, which buyers love to see after nps, understanding your retention rate is another key metric. The higher your retention rate, the more satisfied the customers are and the more predictable your revenue will be. Let's say you have a dance studio and you have a retention rate of 85% of your clients coming back the following year. That's predictable income with a retention rate that people are going to want to know because they don't want to have to go out there and sell it. It's all kind of linked back into this recurring revenue model that we talked about too. But if you do have a high customer retention rate, it's proving that you have high customer satisfaction. To how else are you gathering feedback, gathering information that you can have in a file to show to someone as far as telling them, yes, we do own our area. We have monopoly control. We have great customer satisfaction rates, we have great customer retention. What other feedback mechanisms do you have? Surveys, maybe reviews or direct conversations that have been detailed and dialogued and saved? Do you have a way to check this information, to pull it up when needed and start thinking about collecting this stuff? Because even if you aren't looking to sell your business over the next three, five years, when you are ready, you can't just pull this stuff up in a matter of a week or two. You have to have it there and ready to go. It takes time to build the stats on customer satisfaction and the longer history, the more solid it is and confident your buyer will be. So how can you improve your customer satisfaction ratings? Well, first of all, of course, it's listen to the customers. But it's not just listen to customers. It's not just saying that, because we all say we listen to our customers, but we have to make it easy for them to provide feedback. And more importantly, you have to act on the feedback regularly. Asking the questions for input shows that you care. And when you see these feedback mechanisms coming in, whether it be on Google, whether you know all the different ways your NPS scores, how can you reach back out to them to let them know that you care? It builds and drives deeper loyalty. Step two would be to deliver exceptional customer service. Not just say, I'm delivering exceptional customer service every day, but train your team to prioritize service and go that extra mile. One of the things that we have in our shootopia form is we have what we call the heart of shootopia and it's how we deliver our services at the store. And one of the pieces of that puzzle is go the extra mile and what does that mean? Right? You have to build all this out and train to it and set process to it so that you're delivering that exceptional customer service. Step three is to create a customer first culture. Ensure that everyone in the company from sales to support really understands the importance of customer satisfaction and how this impacts business success. Because when it impacts the business success, it impacts your value. Step number four is to implement loyalty programs. And as much as you can Encourage repeat customers by rewarding these customers for their loyalty. It's easy to shop elsewhere these days. It's quite easy to shop elsewhere, whether it's for goods or for services. But make sure they understand their discount structure, their perks, their access, early access to funding new products. Whatever the case is or a service is, let them know that it matters. And step number five would be to deal with the issues. We all have issues in our business. Don't let them fester and pester along the way. Because the way you handle customer complaints can be a deciding factor in whether those customers stick with you or leave. So you always want to aim to resolve issues in a swiftly and effective manner. That is going to tackle the problem, deal with it upfront and that again drives the value of that customer. And they're going to love the fact that most clients know that stuff happens and the biggest thing is that you take care of. So somebody coming to look at your business, how would they view customer satisfaction for your business? That's how you have to always be putting on the buyer's lens or the banker's lens when you look at your business and I know it's hard because you're digging down there, you're in it every day, all this stuff and. But if you step back and look at it from a buyer's lens or a banker's lens, it really provides a window in the future revenue potential of the business. And a business with loyal customers is far less risky because there's a higher likelihood that the customers will stay after the sale. And businesses with high customer satisfaction can command a higher price because they have built in goodwill. If you've ever bought a business before, you know that line on the balance sheet called goodwill, you've paid for that in the past and you want to get paid for that when it's your turn to sell as well. It's a strong reputation that reduces the buyer's risk. So do you want to learn more about assessing your customer satisfaction levels? All you have to do is head on over to the exit ready business and take the value builder assessment. It's part of this eight part value builder series and really it's going to take about half an hour or so to do that. We'll hop on a call for a half an hour to go over it with you. Build that action plan that you can tackle on yourself. Doesn't cost you anything. I'm happy to have the conversation with you if you want to use me as your coach down the road. That's an option, too, but it's a great little app action plan to get you thinking about the things that you need to do. And you can tackle it yourself, too, if you like. So head on over to the Exit Ready Business, click that little blue green button that says the Value Builder Assessment, and then I'll be in touch with you shortly thereafter. Next week, it's the final it's number eight of the Value Builder series. It's all around Hub and Spoke, which is really how you remove yourself from the center of your business. Are you the Hub and Spoke of your business? Everything goes in and out through you. That's what we're going to talk about, and that's what we're going to talk about in the last piece, and often the most important piece of creating value in your business. So until then, make it a great day.