Question

High customer satisfaction, which is driven by a products and services consistently meeting or exceeding expectations, is a key indicator of retention. If you set the expectations too low, people will not buy the offering. But if you set the expectations too high, you run the risk that your buyers will be dissatisfied. What is the importance of setting the right expectations for customer satisfaction?

1) It helps in retaining customers
2) It increases sales
3) It reduces customer dissatisfaction
4) All of the above

Answer 1

Setting the right expectations is crucial for customer satisfaction because it helps retain customers, increases sales, and reduces dissatisfaction. A good reputation is essential in signaling quality to customers and securing their trust in the absence of perfect information.

Step-by-step explanation:

The importance of setting the right expectations for customer satisfaction is multifaceted. Fundamentally, it helps in retaining customers, as satisfaction leads to repeat purchases and customer loyalty. Moreover, it has a direct impact on increasing sales because satisfied customers are more likely to recommend the business to others, broadening the customer base. Finally, setting appropriate expectations reduces customer dissatisfaction by aligning what customers anticipate with what they actually receive, thereby minimizing the likelihood of regret or avoidance of future purchases. Establishing a good reputation is crucial for a business as it conveys quality and reliability to the customer, especially in cases where the information available about the product or service is imperfect or unclear.