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What is Customer Perception? Everything You Need to Know About it

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What is Customer Perception? Everything You Need to Know About it

Mar 12, 2024
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10 min read
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Table of contents

Imagine your business through the eyes of your customers. What do they think about your services? How do they feel when they use your products? These questions center around a crucial concept known as customer perception. 

Customer perception is a collection of thoughts and emotions your customers hold about your business. It is shaped by every interaction they have with your brand. In this guide, we’ll delve deep into:

  • What is customer perception
  • Uncover why it’s a cornerstone for business success 
  • How it influences everything from customer loyalty to your brand’s reputation

Table of Contents

What is Customer Perception?

Customer perception is the mental image your customers form about your business. It is influenced by their experiences, beliefs, and interactions with your brand. It’s a blend of what they think and feel about your products, services, and overall brand identity. This perception shapes their decisions to engage with, purchase from, or advocate for your business.

Let’s take an example. Imagine a local coffee shop. Customers don’t just perceive the brand based on the coffee’s taste. Their perception encompasses the ambiance of the shop, service quality, the friendliness of staff, and even how the brand engages with the community. 

A customer who perceives the shop as a cozy and community-friendly place will not only show loyalty towards the brand but also recommend it to their friends. Thus, understanding how customers perceive your brand and coming up with ways to influence this perception in a positive manner is important for any business. It’s not just about the product but the entire experience your business delivers.

Why is Customer Perception Important?

Let’s delve into why customer perception holds such weight:

  • Drives Purchasing Decisions: How customers perceive your brand directly influences their decision to buy your products or services. A positive perception can lead to increased sales and loyalty.
  • Shapes Brand Reputation: Customer perception forms the foundation of your brand’s reputation. Positive perceptions can enhance your brand image, attracting new customers.
  • Influences Customer Loyalty: A favorable perception leads to higher customer retention. Satisfied customers are more likely to return and make repeat purchases.
  • Generates Word-of-mouth Marketing:Happy customers often share their positive experiences on social media, third-party review platforms and even refer your services to others. This works as free marketing for your brand, which ultimately attracts more customers.

For example, consider a tech company that is perceived as innovative and customer-centric. This perception attracts tech enthusiasts and creates a loyal customer base that is likely to recommend the brand to others. On the other hand, if customers perceive a company as outdated or unresponsive, they might switch to competitors, impacting the business negatively.

Recommended read: How Great Customer Service Can Drive Business Growth

Factors That Influence Customer Perception

Customer perception is shaped by the expectations and experiences your customers have with your business.

Let’s break this down and understand the key factors that shape this perception: 

  • Product Quality: The core part of customer perception often lies in product quality. High-quality, reliable products create a positive perception. For example, a smartphone known for its durability and performance is likely to be perceived favorably.
  • Customer Service: The level and quality of customer service significantly impact perception. Quick, helpful, and friendly service – especially post-purchase – can leave a lasting positive impression. It shows that you’re always available for the customer and that you value them.
  • Brand Image and Marketing: The way a business markets itself can also influence customer perception. A company that consistently markets itself as eco-friendly and adheres to sustainable practices will be perceived as responsible and conscious
  • Price and Value for Money: The pricing of products or services and the perceived value for money can shape perception. For instance, a business offering premium products at a higher price point may be perceived as a luxury brand.
  • User Experience: The overall experience a customer has with your products or services, including ease of use and accessibility, influences perception. A user-friendly website or app can drive a positive perception.
  • Social Proof and Reviews: Customer reviews and testimonials act as social proof. Positive reviews can build trust, while negative reviews can deter potential customers.
  • Word of Mouth: Personal recommendations and experiences shared by others can strongly influence customer perception. A business recommended by a trusted friend is often perceived more positively compared to others.

How To Identify And Measure Customer Perception

Measuring customer perception is key to understanding your brand’s position in the minds of your customers. It involves gathering and analyzing data that reflects their experiences and opinions. 

Here are some practical methods to accurately capture and measure customer perception:

1. Customer Surveys and Feedback Forms

Gathering direct feedback from customers is essential for understanding their perception of your business. You can collect feedback from your customers through survey forms and then analyze the data to understand customer sentiment. 
 Here are some of the ways you can effectively use surveys and feedback forms:

  • Net Promoter Score (NPS)

NPS measures customer loyalty and the likelihood of recommending your business to others. It’s based on a single question: “On a scale from 0 to 10, how likely are you to recommend our company/product/service to a friend or colleague?” where 0 stands for ‘least likely’ and 10 stands for ‘most likely’. 

How to Calculate NPS:
Based on the ratings, customers are categorized as Promoters (giving a score of 9-10),Passives (giving a score of 7-8),or Detractors (giving a score of 0-6).

Finally, NPS= {(Number of Promoters – Number of Detractors) / Total Number of Respondents}× 100
This formula gives a score ranging from -100 to 100.

  • Customer Satisfaction (CSAT)

CSAT measures customer’s overall satisfaction with your business, product, or service. It is calculated by first asking the question, “How would you rate your overall satisfaction with the products/service you received?”

The responses are usually on a scale of 1 to 5, or 1 to 10; where 1 might represent “Very Dissatisfied” and 5 or 10 might represent “Very Satisfied.”

How to Calculate CSAT:
Once you get all the scores from your customers, add up the scores and divide by the number of respondents.
For instance, On a scale of 1-4, if the total score from all respondents is 400 and there were 100 respondents, the average CSAT score would be 4 out of 5.

Collect customer feedback directly from Gmail See how

2. Social Media Monitoring

Social media is a goldmine for gauging customer perception. Social media monitoring involves tracking mentions, comments, and discussions about your brand across various social media platforms. This allows businesses to capture real-time feedback and sentiment about their products, services, and overall brand image.

Here’s how you can analyze your social media data:

  • Analyzing Sentiment: By tracking mentions and hashtags, you can analyze the tone of the conversations around your brand. Tools like Hootsuite, Hashtagify, Keyhole etc. can help. It is also important to analyse the sentiment of your customers. Are the comments mostly positive, negative, or neutral? This sentiment analysis helps in understanding customer attitude towards your brand.
  • Responding to Feedback: Monitoring social media also allows for real-time interaction with customers. Addressing complaints, thanking customers for their positive comments, and engaging in conversations show that you care about your customers and their opinions.
  • Tracking Trends and Patterns: Over time, social media monitoring can reveal trends in customer opinions. For instance, are there recurring complaints about a particular aspect of your product or service? Or do customers frequently praise a specific feature? These insights can guide business decisions and improvements.

For example, imagine a retail clothing brand launching a new product line. By monitoring their social media channels like Twitter and Instagram, the brand can track customer reactions to the new collection. Tools like Hootsuite or Sprout Social can help. They track the unique hashtag created for the launch. 

The brand can also analyze customer sentiments with tools like Brandwatch to gauge customer reactions. Tools like Instagram Insights or Twitter Analytics help review engagement metrics. This allows them to observe if customers are sharing photos of their purchases and what they’re saying about the style, fit, and quality. Such immediate feedback, provides invaluable insights into customer perception of the new line.

3. Online Reviews and Ratings

Online reviews and ratings refer to feedback left by customers on various third-party sites. These can range from general review sites like Yelp and Google Reviews to niche sites like G2.

Reviews and ratings are often the first things potential customers encounter when researching a brand. They provide a snapshot of what existing customers think about your business and can significantly influence the perception of your brand.

Here’s how you can make the best use of online reviews of your brand:

  • Regular Monitoring: Regularly check review platforms for new reviews. This proactive approach ensures you’re always up-to-date with customer feedback. It is also a good idea to sign up for new platforms relevant to your industry. 
  • Responding to Reviews: Engage with both positive and negative reviews. Acknowledging positive reviews shows appreciation while responding to negative feedback demonstrates your willingness to listen to customers and address their issues.
  • Analyzing Feedback for Insights: Look for patterns in the reviews. Are there specific aspects of your service repeatedly praised or criticized? This can highlight strengths to build upon and areas that need improvement.

Consider a hotel chain monitoring its reviews on TripAdvisor. The management could use this feedback to understand guests’ perceptions of their facilities, cleanliness, customer service, and overall experience. 

For instance, if several reviews point out the friendliness of the staff as a positive, the hotel can capitalize on this strength in their marketing. Conversely, if there are recurring complaints about room cleanliness, it signals a need for immediate action in housekeeping standards.

Recommended read: Customer Feedback Guide: How to Collect and What to Do With It?

4. Website Analytics

Your website often serves as the first point of contact between your business and potential customers. Utilizing website analytics is crucial for understanding how users interact with your site and how they perceive the brand.

Tools like Google Analytics, Hotjar, or Crazy Egg can provide in-depth insights into user behavior, such as which pages they visit most, how long they stay, and at what point they leave. 

These tools can help you track key metrics mentioned below, offering valuable data to enhance the user experience:

  • Bounce Rate: The percentage of visitors who leave after viewing only one page. A high bounce rate might indicate that your site isn’t engaging or relevant to visitors.
  • Session Duration: The average amount of time users spend on your site. Longer sessions suggest that users find your content valuable and engaging.
  • Conversion Rate: The percentage of visitors who take a desired action, like making a purchase or signing up for a newsletter. This reflects how effectively your site turns visitors into customers or leads.

Here’s how you can analyze your website for your business:

  • Evaluating User Experience: Analyze which pages are most visited and how users navigate your site. This can reveal what attracts users and where they might be getting lost or frustrated.
  • Identifying Pain Points: Where do users typically exit your site? Or what are the pages with high bounce rates? These could be areas where the user experience needs improvement.
  • Measuring Effectiveness of Changes: After making adjustments based on analytics, continue to monitor these metrics to see if there’s an improvement in user engagement and satisfaction.

For example, an e-commerce business can use website analytics to understand customer behavior during the shopping process. For example, if analytics show a high drop-off rate at the checkout page, this might indicate a problem with the checkout process, such as having limited payment options on the checkout page. Addressing these issues can improve user experience and potentially increase sales.

5. Sales Data and Conversion Rates

Analyzing sales data and conversion rates is a direct approach to understanding customer perception and its impact on business performance. This method provides tangible insights into how customers are responding to your products or services.

Utilizing a Customer Relationship Management (CRM) system like Salesforce can significantly enhance this analysis. A CRM can aggregate and organize sales data, making it easier to spot trends such as seasonal fluctuations, responses to promotions, or shifts in buying patterns. 

These insights are crucial in understanding what motivates customer decisions and how they perceive your offerings at different times. Moreover, a CRM can segment this data by customer demographics or behavior, allowing for more nuanced analysis of how different groups respond to your products or services. This comprehensive view offered by a CRM is invaluable in shaping strategies to improve customer perception and drive business growth.

Here’s how such comprehensive data can help your business:

  • Product Performance: You can evaluate which products or services are performing well and which aren’t. High-performing products might benefit from further investment, while low-performing ones may need re-evaluation or discontinuation.
  • Marketing Effectiveness: Analyzing how different marketing strategies and campaigns impact sales can help in strengthening those efforts. This can reveal what messaging resonates with your audience and how they perceive your brand under various marketing efforts.
  • Customer Segmentation: Break down the sales data by different customer segments. This helps to understand how various groups perceive your products and whether certain demographics are more engaged than others.

A retail business, for example, can use sales data to track the success of a new clothing line. If the conversion rate (the percentage of website or store visitors who make a purchase) is higher for this line compared to others, it suggests that customers have a positive perception of the new line. 

6. Customer Support Interactions

Evaluating customer support interactions is a crucial method for gaining insights into customer perception. These interactions often provide direct feedback on your products, services, and overall customer experience.

This is were a a helpdesk system, like Hiver can be helpful. It organizes and categorizes customer inquiries, within your Gmail inbox allowing you to identify common issues and gauge overall customer sentiment. 

By analyzing tickets, chat logs, and email interactions stored in the helpdesk, you can understand the nature and frequency of customer concerns, as well as the effectiveness of your support team’s responses. Effectively leveraging a helpdesk system for evaluating customer interactions can thus play a significant role in enhancing customer perception and satisfaction.

Here’s how you can analyze Customer Support Interactions:

  • Nature of Interactions: Review the types of queries or complaints customers present. Are they mostly about product features, service issues, or user experiences? This can highlight areas where customers may be facing challenges.
  • Frequency and Patterns: This is an extension of the previous point. Identify the most frequent types of support requests or complaints. Recurring issues are indicators of problems that can significantly impact customer perception.  For instance,let’s saya smartphone company frequently receives support requests about battery issues. This recurring theme could indicate a widespread problem with battery life. Such a pattern not only identifies a specific area for product improvement but also highlights a key concern impacting customer perception of the brand’s reliability.
  • Response Effectiveness: Assess how well the customer support team resolves issues. Metrics such as response time and resolution time can shed light on how efficiently support staff answer customer questions.

Here’s how support interaction analysis can help your business:

  • Improving Products and Services: If customers have questions about certain features or aspects of a service consistently, they might need re-evaluation or enhancement.
  • Training and Development: Patterns in customer support interactions can help identify areas where staff training might be required to provide better service.
  • For example,a travel agency consistently receives queries about confusing booking procedures. It suggests a need for staff training to better explain the process and improve customer service.
  • Policy and Process Changes: Frequent complaints about certain policies or procedures can signal the need for changes to improve the customer experience. For instance, if an online retailer frequently faces complaints about its lengthy return process, it indicates a need to revise and streamline the policy to ensure hassel-free returns. This will improve customer experience leading to satisfied customers.

A technology company, for instance, might analyze customer support interactions to understand user issues with a software product. If a significant number of customers are having difficulty with a particular feature, this feedback can prompt a review and possible redesign of that feature. Additionally, if customers express dissatisfaction with speed of service, the company might consider increasing support staff or equipping them with technology that can help handle large volumes of queries effectively. 

Analyze your support interactions directly from your Gmail inbox

Ways to Improve Customer Perception

Enhancing customer perception is critical for business success. Here are effective strategies to positively influence how customers view your brand:

  1. Deliver Exceptional Customer Service: Prioritize quick, empathetic, and effective responses to customer inquiries and issues. For example, a hotel that offers prompt solutions to guest concerns can significantly improve its perception as a customer-centric brand.
  2. Maintain Consistent Quality: Ensure your products or services consistently meet high standards. For example, a coffee shop known for its consistently good coffee and service is likely to be perceived favorably.
  3. Engage Actively on Social Media: Use social media platforms to engage with your customers, share valuable content, and address their concerns. For instance, a retail brand that responds thoughtfully to customer comments and shares engaging content can enhance its image as approachable and customer-focused. Go a step further and get some Instagram likes to boost your brand credibility and create a positive perception.
  4. Act on Customer Feedback: Regularly ask for customer feedback and show that you value and act on it. For instance, a software company that implements features based on user feedback demonstrates that it listens to and values its customers.
  5. Improve User Experience: Focus on making your website, app, or physical store user-friendly and accessible. For example, an e-commerce site with an easy-to-navigate interface and a seamless checkout process will likely leave a positive impression on customers.
  6. Emphasize Transparency and Honesty: Be transparent about your business practices, policies, and product details. For instance, a clothing brand that transparently shares information about its sustainable sourcing practices can build trust and a positive reputation.
  7. Train Your Staff: Ensure that all staff, from customer service representatives to salespeople, are well-trained and embody the values of your brand. A knowledgeable and courteous sales and support team can greatly enhance customer perception.
  8. Personalize Customer Experiences: Tailor your interactions to meet individual customer needs and preferences. Personalized marketing emails or tailored product recommendations can make customers feel valued and understood.
  9. Support Social Causes: Align with social causes that resonate with your brand and audience. A business that actively supports environmental initiatives, for example, can improve its perception among eco-conscious consumers.
  10. Monitor and Respond to Online Reviews: Regularly check and respond to online reviews. For example, a restaurant that addresses negative reviews with offers to rectify the situation can turn a negative perception into a positive one.
  11. Create Quality Content: Develop content that provides value to your audience, such as informative blog posts, how-to guides, or engaging videos. This can establish your brand as an industry leader and a valuable source of information.

Wrapping Up

Customer perception is a crucial aspect of any business, influencing everything from brand reputation to sales. It’s a multifaceted concept shaped by various factors, from product quality to customer service. By understanding and actively working to improve customer perception, businesses can foster stronger relationships with their customers, enhance brand loyalty, and drive growth.

One of the most important factors shaping customer experience is customer service. It is important to diligently respond to your customers’ queries proactively. This shows your brand’s customer-centric values. 

Speaking of customer service, you might want to check out Hiver. Built to work within the Gmail interface, Hiver centralizes all your customer communication in a single place – so that you never miss a query. With Hiver, you can not only manage customer interactions but also gather customer feedback directly from the familiar Gmail interface. 

With features like shared inboxes and email analytics, Hiver helps in distributing customer communications among team members and provides insights into response times and customer satisfaction. Interesting, isn’t it?

Schedule a free demo to know more

A B2B marketer, Madhuporna is passionate about breaking down complex concepts into easy-to-digest nuggets with a stroke of her pen (read keyboard). Her expertise lies in crafting research-driven content around customer service, customer experience, IT and HR. When off the clock, you'll find her binge-watching suspense thrillers or basking in nature.

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