Customer Satisfaction: It's About Customer Loyalty

In the past decade, much has been learned about the relationship between consumer satisfaction with their total buying experiences and how loyal they will be to a particular service provider or brand. Most research supports the premise that loyalty can be assured by consistently exceeding customer expectations.

Why does loyalty matter? Because of the often profound difference between the purchase behaviors of those who are defined as loyal to a business versus those who indicate no particular favor or bias. Significant increases in positive word of mouth, frequency of visit, average ticket, and range of purchases all convert to increases in revenue that are long-term in nature.

Why measure customer satisfaction?
There are compelling reasons why every company should measure customer satisfaction. Intuition or anecdotal feedback from toll free comment lines are not accurate enough to provide a true representation of how customers experience your brand at the unit level. It requires systems that are easily accessible to customers; that can acquire opinions that are representative of your customer base; that can provide data while it is still relevant; and, can be acted upon by front line managers to improve satisfaction. Consider these issues as well:

You can't manage what you don't measure
Front line managers are accountable for the experiences they provide their customers. But they need accurate information that directs them to problems and opportunities, and validates whether their efforts at improvement are yielding results. Mystery shops, comment cards, and toll free comment lines cannot meet these criteria. In fact, in many cases they can mislead and misdirect managers regarding the true status of customer satisfaction.

The changing nature of service quality
A critical characteristic of service quality and delivery in most front-line service environments is that it is not static or stable. Being dependent, in most cases, on human interaction, the quality can vary dramatically from day to day, person to person, interaction to interaction. This amplifies the need for a monitoring system that can capture impressions on an ongoing basis, across all day parts, with numerous sampling points in a defined period.

The need for consistency
In a multi-unit environment, the need for the consumer to have consistent experiences from one location to another is essential to building a brand. A failure to do so threatens the brand itself (not to mention that location). System-wide satisfaction monitoring provides you an accurate picture of how individual units are executing the brand experience, identifying your problem stores and your superstars. Once remediation measures are in place, it is a primary tool for validating whether changes are yielding the desired effect: increasing customer satisfaction.

An early warning system
Customer satisfaction levels have proven to be a leading indicator of financial declines. As satisfaction levels fall off customer defections will begin to increase, leading to loss of revenue. Because these events don't typically happen in rapid succession, the early detection of falling satisfaction levels affords an opportunity to make corrective action before customer loss occurs (and damage to brand reputation), avoiding financial loss.

Print Page