Reflections on customer loyalty and customer satisfaction: not the usual perspective

So much talk, so much confusion – round and round we go

Round and round we keep going writing about, talking about, customer satisfaction and customer loyalty.  Some say that the route to customer loyalty is customer satisfaction and others say that the abode of customer satisfaction does not lead to mountain of customer loyalty.  Everyone has an opinion and if you look deeply that opinion, the point of view, the white paper is totally in line with what that person is selling. So let’s start there.

I am not selling you anything.  I am not even interested in convincing you of anything. And I don’t want to teach you anything.  Why?  Because the purpose of this blog is simply this: a vehicle for me to get present to my point of view on all things customer and to share that point of view with anyone who wishes to access it.  Also, I am open to entering into conversation (and friendship) with you on what I write and which speaks to you. So now that I have shared the context of all of my writing let’s explore the topics of customer loyalty and customer satisfaction.  Before I address the customer dimension I simply wish to explore loyalty and satisfaction in terms of my experience.

Are customer loyalty and customer satisfaction two distinct phenomena?

When I look into my living and get present to my experience I notice the following:

  • Loyalty has been present (to specific people) even when I have been highly dissatisfied with these people;
  • I have been satisfied (with people and institutions) without being loyal.

This leads me to suspect that loyalty and satisfaction are two different phenomena (and domains of experience) and that the access to each is likely to be different.  You might be wondering what the heck I mean?  To use an analogy and speak in blunt terms, the access to my wife’s love (of, for me) is through the route of being present, being patient, being interested in her, listening to what she wishes to say without judgement, providing the helping hand as and when she needs especially when she does not ask for it.  Now compare that with sex: the access to sex with a prostitute is the right amount of money.  If I was to confuse the two then I would be setting myself up for a lot of trouble.  It occurs to me that this is exactly what we, the business folks, are doing when it comes to customer loyalty and customer satisfaction.

Loyalty – how/when/where does it show up in our experience?

As far as I can see people are loyal to people, institutions, religions (and other ideologies, and even products.  Furthermore, it occurs to be that most of us are thrown into the state of being loyal without actually choosing to be loyal – there are exceptions.  Most of us find ourselves being loyal to:

  • Our family members and our ‘tribe’ (community, race, nation…) – we are indoctrinated that way and when we are not being loyal then we feel some element of guilt;
  • The same applies when it comes to those born into religious families and communities – not only do we tend to be loyal to the religion itself but also the institution/s that represent that religion.  Take a moment to think about how the abuse by members of the Irish Catholic church went on for many decades even though evidence suggests politicians knew, policeman knew, priest knew and the Vatican knew.
  • Political parties: children born into families where the parents vote Conservative, inevitably end up doing the same irrespective of the policies being put forward, the same is true for Labour, Republican, Democrat etc
  • Specific products simply because we grew up with them: some people grow up drinking Coke and Coke is all they will drink; my mother always used and continues to use Lurpak butter no matter what.

From the above I assert that loyalty is related to identity and vice versa.  More specifically, I assert that loyalty and identity are two sides of the same coin or you can think of them as the yin and the yang.  If I strongly identify with family, religion, political party, product then they came part of me.  When I am being loyal to these people, institutions, ideologies and products then I am being loyal to me as my identity.  Why did I write it that way?  Because as and when we change our identities in a significant manner our loyalty also changes.

What has that got to do with customer loyalty?  Everything.  Apple fans are Apple fans because Apple is such a strong part of their identity.  Starbucks loyalists are loyalists because Starbucks is part of their identity not Costa Coffee (competitor in the UK).  Burberry is doing fantastically well because Burberry is core part of the identity of the affluent.  So the challenge for companies is to get people to incorporate their brands into their identities.  And that does not happen simply if you build a product that is a little better than the competition or provide service that is slightly better than the competition.  The core challenge is to stand for something that presses the emotional buttons that are already present in human beings.  I have given you a clue about some of the buttons and there are plenty more (which I might just write about in another post).

The other point that I wish to make with regards to loyalty is that the real test of loyalty is when I am presented with a choice (just as good or better than my existing choice) and I can take it at no cost to me.  Imagine that I am a married businessman often away on business and I am presented with a no-cost, no-risk, opportunity for sex with a woman that I find attractive.  I am tempted, really I am tempted – it occurs to me that it would be a great experience at no cost/risk to me.  If and only if I decline that opportunity am I loyal to my wife.  In this case (one of no cost/no risk) my loyalty arises out of my declaration of loyalty to my wife.  In the same as our loyalty to our country arises out of our oath of allegiance and to betray our country is termed treason.

Lets press on.  Once I am operating out of the context of loyalty I can dissatisfied with you and yet continue to be loyal to you.  Lets make that real.  I am loyal to my brother and yet there are many aspects of my experience with my brother that I am dissatisfied with: when we meet each other we are as likely to ignore each other or to trade unkind words.  Yet when it matters we are there for each other – this is not talk, it is what is so because it has happened several times and will happen again.  Or think about the Irish Catholic Church.  Why did the politicians, the policeman, the priests do anything?  I suspect they were highly dissatisfied at what was going on yet they did not break ranks with the Church.  Why?  Out of their sense of loyalty?

Satisfaction: it can lead to repeat behaviour and not necessarily loyalty

Let’s go back to the analogy I used earlier.  I visit a prostitute and when I came out of her chambers you ask me to complete a survey and I give her a score of 8,9 or even 10.  Does that mean I am loyal to this prostitute?  Not necessarily!  I might turn up next week and see a new member of the brothel that is younger, more seductive, more/different in one or more ways that get my attention.  And I switch.  You are confused: why did you switch?  And you are perfectly ok with switching yet you scored 10 in the last customer satisfaction survey!  I switched because I did not incorporate the first prostitute into my identity.  Now if I had then it is not likely that I would have switched and if I did switch then I would have felt some element of guilt, of remorse.

Here is my assertion:  improving the customer experience (the product, the service across the customer journey) is most definitely likely to improve satisfaction.  It will make your customer happier and a happier customer is that much more likely to return and come back to you.  Yet, that absolutely does not mean that the customer is loyal to you despite giving you a 10/10.  I know because I scored my osteopath 10/10 and yet ended up going elsewhere because it was more convenient to me.  If you look into your experience you will see this for yourself – you are human just like me.

Conclusion

customer loyalty and customer satisfaction are two distinct phenomena.  The access to each is different. If you do not get this then you are in for interesting times.  Most of the people I read and listen to are doing a good job of not getting it or pretending that they do not get it.  I wonder if in 10 years some of us will look back and ask how come customer loyalty did not improve despite all of our investment in social media, customer experience, CRM and product development.

Posted on January 21, 2012, in CRM, Customer Engagement, Customer Experience, Customer Insight (inc VoC), Customer Philosophy, Customer Service, Customer Strategy, Uncategorized and tagged , , , , , , , , . Bookmark the permalink. 8 Comments.

  1. Interesting post Maz

    I totally accept that loyalty and satisfaction are not the same thing, however I do think they reinforce one another. I am loyal to Amazon, it is always the first place I look on line. I have tried Waterstones, I really have, I’d like to be loyal, I love their shops, but they never ever deliver on time.

    There does come a point where lack of satisfaction can dent loyalty, possibly fatally.

    James

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    • Hello James
      I’d like you imagine that tomorrow Amazon2 comes along and they offer everything that Amazon does and they have a great reputation for all the things that Amazon does. Now Amazon2 goes further and either gives you the same products as Amazon but at a cheaper price. Or Amazon2 offers to donate say 5% of the price to a charity of your choice. Or Amazon2 offers to give you a loyalty bonus that depends on how much spend with them: you can take the loyalty bonus in the form of shares in Amazon2 or ask Amazon2 to award that to one of your friends/family in the form of a free credit.

      Here is my question: with this scenario vividly in your mind do you choose to stick with Amazon and not switch to Amazon2? If so why?

      I look forward to reading your answer. Then we can peel the onion layers that makes up customer loyalty – at least as it occurs to me.

      Maz

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  2. Maz:

    Interesting discussion and logic! I would agree that satisfaction and loyalty are not the same and must be evaluated as such. I would also argue that there is a customer “attraction” continuum that starts with interest and ends with some degree of intimacy (some may call it brand love), perhaps even ending with the extreme of “addiction”. There is certainly opportunity for additonal exploration around these measures and the role they play with customers.

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    • Hello Alan

      I thank you for entering into the conversation. What you are talking about I am familar with. Whilst I get what you are saying I am not sure that using such a continuum would give a brand access to ‘creating’ loyal customers. The issue I am raising is that the access to loyal customers is through the route of Identity. When you the brand manage to ‘collapse’ the shield that I carry around me always and which constitutes “I” then you have the opportunity to merge into and become a part of “I”. When you do that then and only then am I loyal to you. And the route to that state of affairs is not necessarily through the route of customer satisfaction. In fact I am not be highly satisfied and yet be loyal simply by virtue of ‘who you are’ and ‘what you stand for’ – that resonates with my limbic brain, the part of me that is moved to tears of delight or pain.

      I wish you the best.

      Maz

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  3. Hi Maz,
    When I think about loyalty and satisfaction it makes me think about Stephen Covey’s idea of the Emotional bank account, where if I build up a positive balance of actions in someone elses ‘account’ then that can help me build up trust with that person. Hopefully enough trust that there will be a greater tolerance for my mistakes when they happen.

    To build up that trust I can focus on continuing to deliver satisfaction at a base level. If I continue to do that then I can ask for someone’s loyalty. I cannot expect it.

    Satisfaction is something that we can influence and control depending on our promise. Loyalty, however, is outside of our control and we can only earn it and ask for it.

    Is, therefore, satisfaction intrinsic and loyalty extrinsic?

    Adrian

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    • Hello Adrian
      Thanks for taking the time to write and share your perspective. I am not sure if I am or am not in agreement. In a nutshell I am asserting that simply by delivering customer experiences that leave customers satisifed or even delighted you cannot expect to arrive at the destination called loyalty.

      My experience is loyalty (a tie that binds) arises when the shell that surrounds me and defines me as I collapses such that it lets you in and then the shell reappears and this time it surrounds you and me as one entity. To get to that stage requires that something “special” occurs between you and I such that my limbic brain (the emotional core without which I would not be a human) is moved to something like tears of delight, of gratitude…. I get that you have put yourself at stake for me. How would you feel if you and I were in the trenches and I took a bullet for you – one that could have ended your life? That is just an extreme version of what I am saying. I was talking with a taxi driver who is loyal to a specific insurance company simply because the way (full of humanity) he was treated when a stressful event in his life occured and the company got that and not only paid the claim (when they could have disputed it and dragged out the process) but also left him feeling that this company genuinely cared for him. Now the key is that he did not expect this and the company did not have to do this!

      The other aspect of loyalty is that you/your organisation do not have to deliver great service – at least at the start – if you stand for values that I am deeply committed to, values that constitued me as who I am. And/or you are up for bringing about a state of affairs that I am deeply committed to e.g. the $100 laptop. Then there might me all kinds of issues in my dealing with you and yet I will make exceptions to those. The loyalty comes first and given that I am standing in that place (being loyal to who you are and what you are about) I make exceptions for interactions/experiences that are less than stellar. It may be that I even join in to help you improve aspects of your operation so as to improve the aspects of your organisation that fail to deliver. And example of a commercial organisation making use of its customers loyalty is giffgaff. Why do customers do much of the work? Because a set of people identify with what giffgaff is about and then roll up their sleeves to help this organisation live – to live its values and its purpose. The day that giffgaff changes those values, the mission these members will start to leave.

      I hope that better articulates what I wished to convey: no simple relationship between satisfaction and loyalty or vice versa.

      Maz

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      • Hi Maz,
        I think we are wrestling agreement to the ground where we agree that there is “no simple relationship between satisfaction and loyalty or vice versa”.

        Thanks for getting my semantic and synaptic juices flowing :)

        Adrian

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      • Adrian
        You are welcome. You have helped me to be even clearer on the topic. I am grateful that we are in communication and that have enabled me to be of service.

        Maz

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