“Do what you do so well that they will want to see it again and bring their friends.”
–Walt Disney
Customer satisfaction is about how your customers feel about your brand or offerings. Customer loyalty, on the other hand, is the attitude that ensures your brand’s “stickiness” and keeps customers staunch over time.
However, a satisfied customer may not necessarily be a loyal one. And yet, too many companies confuse customer satisfaction with customer loyalty.
What about you?
Are you conflating customer satisfaction with loyalty?
Do you consider loyalty a short-term affair?
Or do you nurture leads, guide customers along their purchase journey, and provide world-class AI customer support to create long-term, mutually meaningful relationships?
Customer Satisfaction is Not the Same as Customer Loyalty
“Satisfaction is a rating. Loyalty is a brand.“
– Shep Hyken, Customer Experience Expert
Customer satisfaction can be quantitatively measured to derive a CSAT score. This number indicates how a customer feels after a particular transaction with your brand, say, immediately after a chat-based customer support session.
But, satisfaction does not indicate how much they love and trust your brand – two emotions that cannot be generated after just one transaction. This is why CSAT is just an incidental and temporary score that indicates whether a particular transaction met its expectations or not. Thus, CSAT is transient and often varies after each transaction.
What Is Customer Loyalty and Why Does It Matter?
“Customer satisfaction is worthless. Customer loyalty is priceless.”
– Jeffrey Gitomer, Customer Loyalty Expert
Consider the world’s most valuable brand – Apple. Their devices are not the cheapest or even necessarily the “best”. But Apple’s powerful brand value and market pull, its products’ esthetic appeal, and its focus on delivering amazing and sticky customer experiences all ensure the loyalty of their customers. In fact, a whopping 87% of Apple’s customers are brand loyal and will continue to support and buy from Apple in the future.
When customers are loyal to your brand, they choose and prefer your products or services to meet their needs. Even if competitors offer lower prices or some other so-called advantages, they’re not easily swayed and still turn to your brand by default. Loyal customers are repeat customers who keep your business running successfully. They also make recommendations and referrals to help you broaden your customer base. Thus, they help you earn more profits and leverage more opportunities for growth. For all these reasons, it’s vital to focus on improving customer loyalty.
How to Measure and Improve Customer Loyalty
If customer loyalty is not the same as customer satisfaction, it stands to reason that CSAT is not the best way to measure it.
So what is? How can you measure loyalty, and more importantly, improve it?
Customer loyalty is not a single score, but a spectrum. One customer can be a little loyal, while another can be extremely loyal. To measure these different loyalties and to take action to optimize overall loyalty, these metrics are all useful:
- Lifetime Value (LTV): The aggregate amount of money customers spend from their first purchase to their latest (or last)
- Customer Lifetime Value (CLV): The spend of each customer over the course of their interaction with your brand
- Churn Rate (CCR): The difference in the size of the customer base over a particular period; a lower CCR indicates lower retention costs
- Referrals: The number of new customers based on word of mouth
- Net Promoter Score (NPS): Indicator of customer loyalty based on how well they receive and recommend your offerings
To garner long-term customer loyalty, it’s vital to build strong, emotion-driven, trust-based relationships with them.
Do you know what customers truly desire from your brand?
Can you meet, or better, exceed these desires?
Do you have a strong emotional connection with them?
Do your communications result in positive customer behaviors?
Do they increase your brand’s equity?
And finally, do you deliver on your brand promises?
These answers will guide your actions to nurture and sustain emotionally engaging customer relationships that garner their loyalty and keep them coming back for more.
Conclusion
To earn a customer’s loyalty, it takes more than one transaction, one sale, or one email. Unlike satisfaction, loyalty is a result of building relationships with them, and consistently exceeding their expectations over the long term. And when you do this, you will create loyal customers who are 6X more likely to stick with your brand, even during tough circumstances.
Loyalty is a critical driver of your brand’s success, so if you’re not yet taking action to enhance it – it’s high time you start. The success of your business depends upon it!
One way to earn customer loyalty is by providing relevant, timely, and personalized AI-powered customer service. If you’re not sure how to get started, contact an authorized Syrow representative for guidance.