Secreting Loyalty Out of Customer Satisfaction

Customer SatisfactionCustomer satisfaction is the Trojan horse of loyalty.

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.

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What do you think?

  1. Lauren Stoner says:

    Creating loyalty to a brand can be done through a number of different ways. Companies are investing around $1.78 billion into cause marketing to try to tap into the emotional side of life that creates brand loyalty. That number is actually expected to jump in 2014. What is interesting is that cause marketing helps but really only creates a lasting emotional loyalty effect if you genuinely care about the cause they have chose to support.

    Allowing companies the ability to invest in cause marketing, while giving every single consumer the choice of any nonprofit registered with the IRS is what really cracks the case. Letting consumers give back to any NPO eliminates the pressure on a brand to choose one or several nonprofits that appeal to everyone. Brands are able to create the desired emotionally satisfying customer loyalty with each individual consumer in a powerful way.

    The trends in cause marketing certainly support what this article says. Raising the bar on emotional connections is one of the best way to increase behavioral loyalty. As we know, customer experience is a whole other… ahem… issue.