Cracking the code to customer loyalty

There can’t be a marketer who hasn’t had to explain what it is that makes customers loyal to their brand, and in turn answer the world’s hardest marketing question ‘is there a direct link between customer satisfaction and customer loyalty?’

Secret Marketer

I had to explain this question to the board this week. We’ve done customer surveys for years, but were always surprised when customers who declared 90 per cent satisfaction would defect to a competitor.

I previously worked for an energy company at a time when people were switching supplier in their droves. I conducted analysis on the satisfaction levels of different groups - those who were new to my brand, had recently complained, had announced they were leaving, and had not been in touch for years.

Those most satisfied with our service were the ones who had complained because we had addressed their concern. The least satisfied were those new to the business because changing supplier was a hassle. Those who had announced they were leaving were no less satisfied than anyone else - “it was price what done it”.

Years later, I worked for a travel company. After every holiday, we asked customers what they thought of their experience. Analysing the stats one day, we split the responses into two and drew two graphs, showing satisfaction with everything from the hotel, the resort, the holiday rep, airport check-in times and food on the plane. One graph was several percentage points above the other one for every measure. And the two graphs? The weather seemed to affect responses - if the sun shone, they felt better about the firmness of the bed and the flight delay than if the weather had been miserable. Marketing often gets asked to do many things, but correcting the weather is pushing our skills somewhat.

In today’s social world, the problem will get even tougher, with customer loyalty influenced by what peers and non-peers say about your brand. So, while I don’t believe there’s a link between customer satisfaction and loyalty, I do believe there is one between dissatisfaction and disloyalty.

Readers' comments (1)

  • Increasingly, 'satisfaction' per se may be a weak measure, which is why other metrics like Net Promoter or Customer Effort come in. Both can demonstrate a much stronger correlation between customer 'happiness/attitude' and subsequent behaviours (loyalty). The problem with satisfaction is that people may tend to answer "are you satisfied?" in a narrow way, thinking only about the functional - did they do what they said they'd do, etc - issues, whereas Net Promoter for example weaves in the emotions too - how did the company make you feel? - by asking the much tougher question, would you actually recommend company X to a friend?

    That said, all this is simply a case of 'metrics schmetrics' unless you act on what the survey data is telling you, and prove to your own 'satisfaction' that it works for your company.

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