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.

Author: Maz Iqbal

Experienced management consultant living/working in Switzerland. View all posts by Maz Iqbal