Customer Loyalty Trumps Satisfaction

In this environment, it's all about satisfying the customer. Do what you say you'll do, meet client expectations, and your business will thrive, right? Not quite.

According to Eric Gregg, managing partner of Inavero, a Portland, Ore.–based research firm specializing in satisfaction surveys for professional services firms, many companies get caught up in the notion of satisfaction when they should instead be focusing on loyalty. "A satisfied customer keeps coming back as long as it's convenient," Gregg notes. "But a loyal customer stops your competitors at the door by saying, 'I don't want to waste your time as I already work with someone terrific.'"

The goal of any business should be to create loyal customers, and doing so takes time and commitment. You need great employees but also a great process that empowers them to exceed client expectations. Gregg notes some common qualities among firms that do a great job in bringing customer loyalty to life:

  • Truly surprising – Customers who visit a regional tire company to get a flat tire fixed are shocked when they go to the register – there's no charge for the service. This feels like special service for the car owner and creates a memorable experience.
  • Minimizes stress and pain – The opportunity to build customer loyalty through service is greatest when someone is stressed out or having a bad day. The company has a great opportunity to play the hero and turn that customer's day around very quickly.
  • Focused on the long term – The tire business has a cost associated with every fix of a flat tire. So do online retailers that offer free shipping on returned merchandise. But these companies get much more value over the long term by increasing customer loyalty, goodwill and word-of-mouth advertising.
  • A discretionary approach – Every client is different, so your employees will benefit from having flexibility in determining how they will "wow" their clients. At Inavero, staff can spend up to $100 for recognition purposes without approval. An employee might send a client facing a tough deadline some movie tickets to take a well–deserved break, for example, or a picture frame to congratulate a customer who just got married. The gesture will depend on the situation and the employee's relationship with the client.
  • A committed staff – All employees need to commit to exceptional service – not just those on the frontlines. While customer loyalty takes time to build, just one bad experience – like a billing problem – can bring it all down.

How do you find and hire people who will deliver a great customer experience? Gregg notes that it's essential to look for empathy. Ultimately, you want people who can identify with customers and feel vested in their happiness. "The best opportunities to create loyalty are often the most arduous for staff," he says. "When a customer presents a stressful situation, this is the moment of truth, and you want your employees' eyes to light up."

Inavero was founded in 2007 by Managing Partner Eric Gregg as iLoyalty, a research firm focusing on client and job candidate satisfaction surveys for professional service firms. In 2008 iLoyalty became Inavero. The name Inavero is derived from the two Latin words indicium and vero, which represents truth in data. Inavero has designed and managed satisfaction surveys in more than 15 countries and 5 different languages.