Satisfying Customers (SQA National 5 Business Management): Revision Note

Exam code: X810 75

Lisa Eades

Written by: Lisa Eades

Reviewed by: Steve Vorster

Updated on

Why is customer satisfaction important?

  • Customers are vital to every business because they are the people who purchase and use products or services

  • Customer satisfaction is closely linked to customer service

    • This covers the experience customers receive before, during and after a purchase, such as how easy it is to get help, how staff treat them and how problems are resolved

Why customer satisfaction matters

Reason

Explanation

Repeat purchases

  • Happy customers are more likely to come back, giving the business regular income

Reputation

  • Satisfied customers are likely to recommend the business to friends or post positive online reviews

Competitive advantage

  • In a crowded market, good customer service helps a business stand out from rivals

Meeting objectives

  • When customers are satisfied, businesses can achieve aims such as profit, survival or increased market share

Case Study

Illustration of a woman milking a cow with the text "Mackie's of Scotland" beneath, depicting a traditional Scottish dairy theme.
  • Mackie’s is an ice cream brand based in Aberdeenshire that focuses on customer satisfaction through high-quality products and sustainable production

  • During lockdown, many people bought Mackie’s ice cream as a small treat to enjoy at home, attracted by its strong reputation for taste and quality

  • The company continued producing a variety of popular flavours using local ingredients and environmentally friendly methods

  • This helped Mackie’s attract new customers, increase sales, and build strong brand loyalty even when shoppers had many other options

Consequences of unsatisfied customers

  • If customers are unsatisfied, the effects can be damaging for a business:

Consequence

Explanation

Loss of sales

  • Customers who feel ignored or mistreated are likely to buy from competitors instead

Damage to reputation

  • Bad service often leads to negative online reviews or word-of-mouth, harming the brand image

Lower staff morale

  • Staff dealing with constant complaints may feel demotivated, leading to higher staff turnover

Failure to meet objectives

  • Poor customer satisfaction makes it harder for businesses to reach goals such as profit, survival or growth

Ways to maximise customer satisfaction

  • Businesses can use a range of methods to keep customers happy and encourage their loyalty

Methods of maximising customer satisfaction

Method

How it helps

Selling quality products and services

  • Supplying reliable, well-made products prevents disappointment and builds trust

Organisation of customer complaints

  • Clear systems for dealing with issues fairly and quickly can turn a negative experience into a positive one

Carrying out market research

  • Identifies what customers need and want, so goods and services can be adapted to meet these

Providing effective after-sales service

  • Support after purchase, such as returns, refunds, warranties and advice, reassures customers and encourages repeat business

Commitment to staff training

  • Well-trained staff give accurate information, solve problems quickly and create a friendly, professional impression

Case Study

Black hexagonal logo with "ooni" in bold white letters above "PIZZA OVENS" in smaller text, against a light grey background.
  • Ooni, based in West Lothian, has become a global success by focusing on customer satisfaction

  • The company noticed that more people were cooking at home and wanted restaurant-quality food during lockdown

  • In response, Ooni invested in market research to follow food and lifestyle trends, and improved its after-sales support with online recipes, video guides and extended warranties

  • These actions helped Ooni build a loyal global community of customers who trust the brand for both its product quality and customer care

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Lisa Eades

Author: Lisa Eades

Expertise: Business Content Creator

Lisa has taught A Level, GCSE, BTEC and IBDP Business for over 20 years and is a senior Examiner for Edexcel. Lisa has been a successful Head of Department in Kent and has offered private Business tuition to students across the UK. Lisa loves to create imaginative and accessible resources which engage learners and build their passion for the subject.

Steve Vorster

Reviewer: Steve Vorster

Expertise: Economics & Business Subject Lead

Steve has taught A Level, GCSE, IGCSE Business and Economics - as well as IBDP Economics and Business Management. He is an IBDP Examiner and IGCSE textbook author. His students regularly achieve 90-100% in their final exams. Steve has been the Assistant Head of Sixth Form for a school in Devon, and Head of Economics at the world's largest International school in Singapore. He loves to create resources which speed up student learning and are easily accessible by all.