A Case for Loyalty

In a competitive environment, where there are daily challenges to compete for customers, customer satisfaction is oftentimes seen as a key performance indicator. As a result, companies and marketing organizations frequently conduct Customer Satisfaction Surveys to gain data on relationships to determine their customers’ purchase decisions. Unfortunately, the results gathered from these surveys are, in reality, NOT a clear indicator of customer relationships or customer intentions.

There are a few issues with Customer Satisfaction Surveys:

  • Satisfaction is a fairly non-distinct term. What are you measuring: product; service; representation; response rate; etc.? The surveys generally lack clarity and relevance.

  • Response rates for these types of surveys don’t normally exceed 2% - 5%, resulting in limited data points from which to draw wide spread conclusions.

  • Typically the surveyed customer selects “Satisfied” or “Very Satisfied” as a response.

"60% - 80% of customer defectors score themselves as "Satisfied" or Very Satisfied" on satisfaction surveys preceding their defection." Bain & Company

On the other hand, understanding how loyal your customers are means that you are measuring their total “customer experience” with your company. You are gaining insight into both the economic and emotional value of the relationship; validating your superior value and their strong attachment. So, loyalty is a true measurement of the quality of the relationship.

Quality relationships and loyal customers are created by:

  • You helping them solve their problems, quickly and easily.

  • You removing obstacles from the relationship.

  • You demonstrating consistent effort.

  • Do your customers have to contact your company repeated to get a response and resolution?

  • Do you create a situation where your customers have to repeat information?

  • Do your customers have to navigate through multiple channels to get required attention?

  • You creating a “frictionless customer experience."

The best measurement of the customer experience is to conduct a Net Promot