Customer satisfaction is declining across industries
Customer satisfaction metrics are slipping, and it isn’t subtle. You’re seeing it in quarterly reports. You’re seeing it in customer feedback. Consumers are getting less value and they know it.
The decline is driven by two things: shrinkflation and skimpflation. Shrinkflation means you’re paying more for less, smaller packages, fewer features, same price tag. Skimpflation? That’s slower service, disrupted reliability, and disappointing performance. Together, they erode the expected return customers get from doing business with you.
Companies are spending more on marketing to disguise the problem, slick campaigns, bold slogans, high-production promos. But if the product or service doesn’t deliver, none of it matters. Customers notice the gap between the promise and the experience. They feel it when they wait longer for support. They feel it when a once-reliable service becomes inconsistent. And they walk away.
This gap between what’s advertised and what’s provided isn’t a marketing issue. It’s a leadership one. If your customers see deteriorating value, they won’t stay, no matter how much you spend to convince them otherwise.
For executives, this isn’t about rebalancing budgets between product and marketing. It’s about knowing where your long-term leverage is. Marketing spends disappear after each campaign. Real customer satisfaction compounds and becomes a profit engine on its own. Cut corners on value, and you’ll pay for it in churn.
Marketing cannot substitute for tangible customer value
It’s easy to lean on marketing when things get tough. A bold rebrand, a new campaign, a sudden push for cultural relevance. But if what you’re selling no longer delivers, marketing won’t save it.
Take Las Vegas. It used to be about exceptional value, full experiences, great perks, world-class service. Now, visitors deal with inflated prices, hidden resort fees, degraded service, and fewer benefits. Turns out, people don’t make repeat purchases when the experience doesn’t justify the cost. Tourism has dropped. Analysts aren’t blaming the scenery, they’re blaming the weakened return on experience.
Other industries are falling into the same trap. Instead of addressing real value issues, companies pour money into acquiring new customers. Some try to target niche cultural segments or align with social or political narratives. These campaigns often aim to show relevance or humanity. Sometimes they succeed. But when they fail, they backfire, alienating core audiences and narrowing brand appeal.
Marketing can amplify a strong product. It cannot compensate for a weak one. And when that reality hits, the result is eroded trust, and the pressure moves straight into the boardroom. You can’t buy loyalty anymore. You earn it with performance and consistency.
For C-suite leaders, especially in growth-stage or turnaround environments, it’s tempting to fix lagging metrics with high-speed campaigns. But short-term impressions don’t translate into long-term retention if the experience underwhelms. Executives need to recalibrate around delivery. If you’re not improving the product, most marketing investments are misallocated.
Customer lifetime value (CLV) is a more sustainable and strategic growth metric than short-term acquisition metrics
Growth isn’t just about volume. It’s about value. Too many companies are still chasing immediate wins, clicks, impressions, quarterly spikes. That mindset doesn’t last. Customer Lifetime Value (CLV) gives you a different lens, one that doesn’t just ask how quickly you can acquire users, but how effectively you can retain and scale their value over time.
Focusing on CLV forces the business to care about outcomes beyond conversion. It demands better onboarding, consistent product performance, and responsive support. When CLV is measured and acted on properly, it becomes the clearest signal of whether your product actually delivers long-term value. If customers keep coming back, if they spend more, if they promote you without incentives, that’s CLV doing the job better than any short-term metric can.
Marketing spends become more efficient when your product holds up. It costs less to acquire customers who are already influenced by positive customer experiences. And it’s easier to forecast and invest when revenue isn’t dependent on running new campaigns every quarter just to stay flat.
Executives need to prioritize CLV not only as a financial tool, but as a strategic benchmark. It’s not simply about calculating expected revenue from a user. It’s about identifying why customers stay, what drives continued engagement, and where the friction is. CLV isn’t a marketing metric. It’s a company metric that crosses departments: product, engineering, support, ops.
Misusing CLV to enforce customer retention through restrictive practices is counterproductive
Too often, companies take CLV and turn it into a compliance metric instead of a value driver. They look at which customers are unlikely to leave, then focus on making it harder for them to exit, long-term lock-ins, loyalty programs that reward stagnation, convoluted cancellation processes. It all shows in the experience. Customers notice when the relationship is driven by retention mechanics instead of earned trust.
This approach might reduce churn in the short term, but it undermines growth. It also limits your brand’s credibility. You’re not building loyalty, you’re avoiding attrition through friction. That’s not strategic. It’s defensive.
The correct use of CLV is about designing experiences that actually pull people forward, not hold them back. If your product improves, if your service becomes more useful over time, customers stay because they want to. When retention is a result of satisfaction, not entrapment, that’s when CLV is serving its purpose.
For C-level leaders, this is a red flag worth watching. When your business optimizes for churn prevention instead of satisfaction growth, you risk hiding key weaknesses behind artificial retention. This masks product flaws and inhibits innovation. The better move is to invest in what genuinely justifies a long-term relationship, speed, openness, responsiveness, and a product that evolves to match customer expectations.
Proper application of CLV means regarding each customer as a long-term investment that must be nurtured
CLV only works if you treat it as a real indicator of value, not just a number to track, but a mindset that shapes how the company thinks about customers. Every interaction, every product update, every piece of service contributes to the lifetime value a customer brings to the business.
When the focus is on long-term relationships, decisions shift. You’re not optimizing for next quarter’s retention stats; you’re building consistency, reliability, and relevance. That means improving product quality, not just maintaining it. It means proactive support, not reactive responses. It means introducing meaningful improvements based on actual user behavior and feedback.
If done properly, CLV becomes a form of operational clarity. It shows how much upside is possible by delighting the customer and how much risk exists if they’re pushed away by poor experiences. It’s a direct line to future earnings, and unlike marketing hit rates, it reflects a real measure of earned trust.
Executives should view CLV as a strategic foundation, not a downstream metric. It needs to drive company-wide priorities, product roadmaps, service delivery, and even cost structure. When customers are seen as valuable assets, not one-time transactions, the motivation to continuously invest in their satisfaction aligns with long-term shareholder value.
Authentic value creation drives sustainable brand growth
When products are good, and the customer experience is strong, growth comes naturally. That’s the reality. Marketing is important, it gets your name out. But it can’t be a substitute for creating actual value. If the product fails to deliver, no campaign will fix it.
The relationship between product strength and marketing performance is direct. When customers are genuinely satisfied, they refer others, they return, and they speak up online. That reduces customer acquisition cost and makes every dollar of advertising more efficient. But when a product overpromises and underdelivers, marketing creates exposure without impact. Worse, it might attract attention that increases scrutiny and turns sentiment negative.
Customers aren’t fooled by short-term noise. Especially in markets with transparency, through peer reviews, social media, app ratings, or public forums, reputation compounds fast. If you’re selling something mediocre dressed with elite branding, the reaction will be faster and more damaging than in the past.
For the C-suite, this is a wake-up call to allocate more attention to core product and service quality. There’s no long-term gain in optimizing creative campaigns while ignoring the fundamentals of functionality, speed, and reliability. When customers get actual value, marketing scales naturally. If they don’t, marketing becomes a tax on failure.
Companies must refocus on strengthening fundamental product and service quality
Customers have reached a tipping point. They’ve absorbed shrinking portions, longer wait times, rising costs, and unmet promises. Now they’re pushing back, with their wallets. Eroding customer satisfaction scores and weakening market responsiveness aren’t coincidental. They’re signals that businesses have prioritized optimization over substance for too long.
The shift forward is practical: rebuild the foundation. This means reviewing every core element, product reliability, service responsiveness, pricing transparency, and delivery consistency. It means removing internal complexity that gets in the way of customer experience. It also means funding less visible initiatives like technical infrastructure, frontline training, and defect resolution that often get sidelined in favor of outward-facing campaigns.
Superficial fixes no longer fool users. They expect tangible improvements. Companies that take the time to make these real changes will create stronger customer relationships, more predictable revenue, and better retention. The payoff isn’t speculative, it’s measurable when tracked through metrics like CLV, churn rates, and satisfaction benchmarks.
For C-suite leaders, this is about reallocating capital and decision-making to where it produces compounding gains. Short-term market moves and branding campaigns may lift near-term sentiment, but rewriting your value proposition through actual delivery and feature depth is what drives long-term differentiation in mature markets. It requires coordination across leadership and a shared commitment to be better at the basics.
The bottom line
Trust is earned. Customers see through inflated promises and polished marketing when the product doesn’t deliver. That’s the reality leaders need to operate from now.
Sustainable growth doesn’t come from noise, it comes from value. When customer experience declines, don’t spin it. Fix it. Measure what matters. Customer Lifetime Value isn’t just a data point, it’s a reflection of everything your company gets right or wrong over time.
For executives, the path forward is clear. Review where your teams are spending, on acquisition or on experience. Prioritize what strengthens retention. Reinvest in what actually drives loyalty. The companies that win long-term aren’t the ones with the biggest campaigns. They’re the ones people come back to without being asked.
