Are Your Customers Merely Satisfied or are They Loyal?

There is a distinction between customer satisfaction and customer loyalty. In effect, a customer is “loyal” when they have the tendency to choose one business or product over another for a particular need time, and time again. Further, for any industry, loyalty is action-based, not wholly reliant on the satisfaction level or opinion of the consumer.

A customer can express high satisfaction levels within, let’s say, a survey, but satisfaction is not equal to loyalty. In reality, customers can be extremely satisfied and still not be loyal. As an example, a person can rave about a product in a survey and will give the product the highest rating but this doesn’t necessarily mean that the customer is loyal. In effect, if the customer is merely satisfied, when the same product comes onto the market from a competitor for a cheaper price, the customer will invariably try out the cheaper product. On the other hand, if the customer is completely loyal, the customer will not go to the competitor even if it costs a little more for the product.

The advantages of achieving customer loyalty are all encompassing in nature. Some of these include:

·     Costs for acquiring a customer only occur at the beginning of a customer relationship. In effect, the longer the relationship is, the lower the recurring costs associated with wooing customers.

·     Long-term, loyal customers are more likely to initiate free word-of-mouth referrals and promotions.

·     Long-term customers have a tendency to be disinclined to switch brands or switch to another competitor and, in addition, tend to be less sensitive to price fluctuations. The result is a more stable unit sales volume and potential increases in dollar-sales volume.

·     In addition, loyal customers are likely to purchase high-margin supplemental and/or ancillary products.

·     Loyalty equals less expensive services.  In effect, if the customer is knowledgeable about the process involved, they require less “education,” and are extremely consistent in placing orders.

So, how do you achieve customer loyalty? In order to build this long-term relationship with your customer, it is essential to have an extremely well managed customer retention program in place. No matter what industry, field, or niche of a business, all programs for customer retention must rely on communication. These communications will give consumers encouragement to remain active and will invariably entice them to continue business relations with a particular company.

If there are difficulties in obtaining and retaining a loyal customer base, it is necessary to look at the operational procedures of a company to see where it is going wrong. As an example, the greatest advice in the world on how to write engaging ads will mean nothing if customers are unhappy with their service. Word travels fast, whether on or off the Internet, and if your customers are unhappy with their service, the business will more than likely never gain loyal customers. Some may even be lost in the process. Customers need to be involved in how a business is run; therefore, it is imperative that a company learns what consumers think of their customer service experience.

Chris Dekle at suggests that a company needs to give surveys to their customers to determine if a business’s customer service policies need to be changed or not.

Truth be told, customer loyalty is more important than customer satisfaction. There is a plethora of benefits, not just the ones listed above, that will ensue if customers become loyal, and stay loyal, to a particular company.

Written by Gary Sorrell, Sorrell Associates, LLC. Copyright protected worldwide. All rights reserved.

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