- March 25th, 2013
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Secreting Loyalty Out of Customer Satisfaction
Companies must not mistake one for the other. If customer satisfaction is viewed as true loyalty, then the company tricks itself into believing all is well and right between it and its customers. The scary truth, however, is that many “satisfied” customers are simply tolerating a company’s services until they can find a competitor that offers a better price, service or location.
For every loyal customer who promotes a brand, there is another whose bags are packed, waiting for the next slightly better feature or benefit to come along — loyalty is hard earned and nurtured every day. It doesn’t just come stumbling through the gate.
As I state in my book, The Loyalty Leap, customer loyalty can really be broken down into two kinds: behavioral and emotional. Customer satisfaction falls under the former, but the latter is the most desired. Here’s a refresher about what distinguishes the two types:
Behavioral loyalty reflects purchasing behavior and is often motivated by rewards. Customers who maintain shopping frequency and purchasing patterns are deemed loyal based on average spending behaviors. The customers are content with the service, but if a better option comes along they’ll make the switch without a second thought to the company they’re leaving behind. Behavioral loyalty can be a strong indication of convenience, price advantage or lack of competition, but it can be fragile and fleeting.
Emotional loyalty, in contrast, exists within a sustained customer relationship; when the customer sticks with one brand even when a competitive alternative is available. It relies on the company’s capacity to recognize customers’ contributions directly. Research by the Gallup Organization shows that a customer who is more emotionally loyal to a business is more valuable than one whose loyalty is only behavioral, or due to satisfaction. In fact, emotionally satisfied customers increased their spending by 67 percent over a 12-month period compared with a mere 8 percent among those who were rationally satisfied.
Customer satisfaction should never be mistaken for customer loyalty. And, to that effect, behavioral loyalty should never be thought of as emotional. Customer satisfaction and behavioral loyalty are states of being that may appear good for business but actually conceal deeper issues, such as a desire for a more meaningful brand experience. Only when we achieve customer loyalty is the depth of that commitment revealed.
Don’t fall victim to the Trojan horse; recognize the difference.