I recently took my Saab in for service at the local dealer. A few weeks later, a survey arrived at my house from Saab USA asking for a few minutes of my time to let them know how I had felt about my recent service and about my Saab in general. I filled it in, sent it back, and the whole time I thought, “They aren't learning anything from me here.”
Why? Because they weren't asking the right questions.
I am assuming that Saab sent me the survey because it wanted to find out how satisfied I was with my recent service and my car in general. I also assumed that they wanted to continue our relationship, get feedback, and gauge my loyalty to the brand via these questions.
But if they were looking to see how loyal I was by asking how satisfied I was, they missed the mark. Customer satisfaction and customer loyalty are not synonymous.
I don't mean to single Saab out. Loads of other brands ask the same question: “How satisfied are you with your ______. Very satisfied, satisfied, dissatisfied?” Or they ask some permutation of that question.
However, those that do ask such questions are going down a deceptive path filled with lots of talk, and not necessarily lots of action. Satisfaction doesn't necessarily lead to repeat purchase and brand evangelism. Satisfaction does not equal brand loyalty.
Asking questions such as “are you satisfied” can lead to flawed data, which can lead to decisions made based on flawed data. The founder of Urban Outfitters, Richard Heayn, said it best when he claimed, “We are not after people's statements, we are after their actions.”
The point of Heayn's statement gets to the heart of the satisfaction versus loyalty conundrum. Satisfaction is more a measure of what people say or feel or think. Loyalty is a measure of what people do. The only true measure of loyalty is a repurchase.
In some industries, it has been proven that up to 75% of customers who switch providers said that they were “very satisfied” or “satisfied” with their previous provider. In an article that appeared in the Harvard Business Review, Frederick Reichheld, the “godfather” of loyalty, cited this disturbing fact in the automotive industry: between 65% and 85% of customers who defect said they were satisfied or very satisfied with their former supplier.
Reichheld noted that satisfaction scores in the auto industry average 85-95%, while repurchase rates average only 40%. Other research, from Bain & Co., has found that in general, in business after business, 60-80% of customers who defect to a competitor said they were satisfied or very satisfied on the survey just prior to their defection.
Yikes. If that isn't a clear indicator of the unreliability of satisfaction surveys, I don't know what is.
Why do you want loyal customers, not satisfied ones?
- Loyal customers buy again and again and again—they don't defect easily!
- Loyal customers tell others about your product or service, and encourage others to try it.
- Loyal customers will buy other products in your portfolio.
- Loyal customers cost less to retain and help create a stable profit base.
Remember, satisfied customers are not necessarily loyal ones. And remember, too, that although satisfaction is necessary to create loyal customers, it isn't the “be all, end all.”
So don't ask your customers, “Are you satisfied?” Ask questions that are more reliable measures of brand loyalty, such as these:
- “Would you strongly refer this brand to a family member/close friend?”
- “Were you completely happy with your service today?”
- “Has this product performed up to your expectations?”
A single question such as “were you happy?” is much more accurate that the toothless “were you satisfied?”
And ask your customers what they do, not just what they feel or think. Watch what they do through purchase behavior. Infer what they want through their behavior. Become an anthropologist of your customers!
Information is changing, as are the methods for analyzing it. No longer is data as statistics based—but it is more behavior-based and relationship-based. Asking a customer about satisfaction is usually asking their opinion on something that has already happened. This just is not a reliable measure of future behavior.
Many people say they will do things, but how many always follow up and do what they say they will? As Reichheld says about customers, “Watch what they pay, not what they say.”
Actions always speak louder than words.
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