Guest blogger: Maeve Naughton, Customer Reference Programs expert

We’ve all seen the movie where the girl or guy turns to their significant other and says “I love you, but I’m not in love with you.” Sometimes it’s hard to believe while other times you want to yell at the TV and say “Duh!!!!!” Shouldn’t the recipient of the news have known? You can tell when someone loves you compared to being in love with you right?! Most of the time I think it’s pretty obvious.

Companies often fall into the same situation when you change the first “love” to “satisfaction” and the second to “loyal”. Companies tend to think that satisfied customers are enough, but it’s not. You want loyal customers! Companies also tend to think that satisfaction and loyalty are the same.  They are very different!

So what’s the difference between satisfaction and loyalty? Satisfaction is defined as contentment and fulfillment. Loyal is defined as being faithful and showing allegiance to someone or something – somewhat similar definitions but huge differences when it comes to businesses. Sure I was satisfied with my lunch today, but I’m going to keep looking around for a better restaurant like the one down the street that I’m loyal to. I love it and try to go as often as I can while also telling others about it.

Bain & Company and Satmetrix talk about satisfaction as a product meeting the needs of a customer, a product working as expected or problems being resolved as expected. Loyalty is a bit different. They both describe it as ordinary services delivered exceptionally or exceptional services/features delivered well. You will see the difference being “satisfactory” versus “exceptional”. When you were in elementary school you got a “satisfactory” grade if you did things okay but nothing exceptional – that’s what “A’s” were for. I always equated “satisfactory” with a “C”. Is that good enough? It might be for you, but not for me.

Still not sure of the difference?  How about this….

Love = satisfaction = dating

In love = loyalty = marriage

Studies have shown that loyal customers add to a company’s bottom line. Less money is spent on retaining them than trying to gain new customers. Loyal customers also tell others about their great experience with you. Loyal customers want to let others know how smart they are because they selected your product. Loyal customers have a vested interest in your company and product.  Satisfied customers are happy for the moment and although they might tell others about you and be repeat customers, it’s more beneficial for your company to make them loyal.

Simply put, satisfaction keeps customers happy for the moment while loyalty keeps them happy for a much longer period of time, while also having them tell others. It’ll cost you less money in the long run to have loyal customers rather than satisfied customers.

Don’t get me wrong, satisfied customers are good and definitely better than ticked off customers, but your ultimate goal should be loyal customers. Loyal customers are more beneficial to your company. Don’t be afraid to be exceptional! It’s the difference between loving someone and being in love with someone.

Are your customers satisfied or loyal?

Maeve Naughton has been involved in B2B customer references and customer loyalty for ten years.  She is currently on the Board of the Customer Reference Knowledge Sharing Network (CRKSN) and writes her own blog, Customer Reference Programs Maeve can be reached at maeve.naughton@gmail.com AND twitter id: @maevenaughton.

Guest Blogger: Patrick Reilly, Resources in Action

The relationship between employee and customer loyalty is easy to sense or feel but hard to prove. This is a tough question to answer well, especially for the analytics, but let’s see if we can create a trail of causation.

Recent research by Dan Pink author of Drive indicates that there are three important factors involved in motivating employees in a sustainable way:

• Autonomy (I get to choose and be in charge of certain things at work)
• Mastery (I get to to become master of a skill, domain, etc.)
• Purpose (we all need to know why if we are going to present our best self and best effort.)

People who are motivated in a sustained way do their best, deliver their best work, and contribute.

Autonomy + mastery + purpose = engaged employees

Who do you want interacting with customers?  If I am an engaged employee, I usually interact with enthusiasm and speak from an informed authority. I am also more inclined to advocate for my company if I feel good about the work I am doing, the opportunities I have, and the understanding and clarity I have for why my work matters. We all prefer to talk with upbeat and informed people- so do our customers.

The only piece missing from the information above is ‘listening to the customer’ which you describe so well in your video.  I don’t assume that an engaged employee who can speak well on the part of the company is necessarily a good listener or open to tough customer feedback. However, that is a skill that we all can develop over time with practice and training.

Patrick Reilly is the President of Resources In Action, Inc. Patrick is a successful entrepreneur and executive consultant with 20+ years experience helping leaders solve current business problems while supporting them to become better leaders tomorrow. His work is strategic, developmental and focused on improving performance. He specializes in working with leaders and organizational systems in transition. His experience is both tactical and strategic.

Patrick brings his extensive experience in both change management and executive development to accelerate and focus the results of his work. Patrick has been a featured speaker at national and regional conferences sponsored by the Association of Executive Search Consultants, ERE Media, the Professional Coaches and Mentors Organization, Northern California Human Resources Organization, and the Organizational Development Network.

Like many Americans, I found myself glued to a new TV show, “Undercover Boss”, that aired right after the Super Bowl.  Something about this show had ALL of my previously raucous party attendees riveted for an hour. 

At first, it seemed like the show was about ‘spying on employees’ and sort of made me feel sick given my commitment to helping companies understand the link between employee loyalty and customer loyalty…and ultimately business success. After awhile, however, it became evident that even if the boss’s original intent HAD been to spy on his employees to find them doing something wrong, the real experience became something very different…the boss (Larry O’Donnell, President and C.O.O. of Waste Management), via various entry level roles such as cleaning portable toilets and collecting garbage, got a REAL view of what it’s like to work for Waste Management.

This view from the ground made him realize that:

• He has some terrific employees who are devoted to providing good service
• Many of the guidelines and policies that he and the board had implemented over the past year were actually serving as obstacles to his employees’ best efforts.

How many organizations are in this same position? Do YOU know what you are doing to keep your employees from bringing their best intentions to the job? As we’ve discussed before, employee satisfaction is on a steep decline in the U.S., which impacts the bottom-line at companies all over America.

Could this trend be reversed if more managers and executives spent just a little bit of time to experience their organization from their employees’ perspective? It sure couldn’t hurt… Could this new reality show help people in charge consider doing a little ‘snooping around’ of their own? We can only hope…

Guest Blogger: Lynn Hunsaker, head of ClearAction Customer Experience Management

Why do sales and service representatives feel compelled to tell customers how to answer a survey? Does the company want to know what the customers really think, or is the company trying to build positive publicity by claiming superior ratings?

The answer to the second question exposes the company’s culture and customer experience management motives — whether they are striving to be customer centric (eager to know and act on what customers really think), or happy to be self centric (eager for positive publicity). Maybe the motive behind the satisfaction survey depends on the sponsoring organization; perhaps a Marketing-sponsored satisfaction survey will naturally lean toward PR objectives, while a Quality-sponsored satisfaction survey will naturally lean toward continual improvement. Regardless of the sponsor, here’s why it’s best to pursue a customer centric survey strategy:

1) Investment: Surveys are an investment of customer time and of company funds, manpower and time – aren’t there more straightforward (honest) and cost-effective ways to build positive publicity? From a statistical view, manipulated surveys are worthless. Even the positive publicity is not sustainable, if it is inaccurate. Telling customers how to respond to a survey makes the survey results invalid, and the whole effort a waste of everyone’s time and money.

2) Customer Management: Many companies are concerned with respondent fatigue issues, so it’s essential to design surveys wisely and use results wisely. And since customer expectations can rise after they participate in a survey, it’s wise to have a well-established process in place to act promptly and systemically on survey results.

3) Growth: Marketing is overlooking lucrative opportunities to heighten their value within the organization if they do not view their role as a voice of the customer conduit into all functional areas across the company.

The answer to the first question reveals weaknesses in the company’s performance management strategy — either imbalanced scorecards or poor training of employees. Customer experience management scorecards should balance lagging indicators and leading indicators, with greater weight placed on the latter. Leading indicators are metrics that are actionable at the manager and worker levels, with a strong (predictive) tie to the customer survey ratings, and which can be measured before customers experience their effects. Survey results are lagging indicators because they reflect what customers have already experienced. If sales and service employees know their performance is being measured primarily by leading indicators, and secondarily by lagging indicators, their compulsion to tell customers how to rate them will be lessened. With the proper setup of customer satisfaction incentive pay, employees should be trained to respect customer’s pure assessments of the business and its related services, and to welcome constructive customer feedback.

The practice of coaching customers on satisfaction surveys should end! Customers feel insulted to be told what to say, especially in our Web 2.0 world, where customers are now accustomed to thinking independently and voicing their true opinions. To end this manipulation, go to the root cause of it: the company’s motives and/or the employees’ bonus calculation. Customers will reward you well for doing the right thing the right way.

Contact Lynn to find out how to customize these tips to your situation.

Lynn Hunsaker, founder of ClearAction, specializes in customer-centric culture-building, customer data ROI, and cross-organizational engagement to deliver brand promises. Lynn has rich hybrid skills and executive experience in marketing & market research, process improvement & quality, organizational development & change management, and leadership & teaching. She managed customer experience programs for more than half of her career, and her executive roles include Head of Corporate Quality, Director of Marketing & Business Development, Manager of Voice of the Customer, Manager of Customer Services, Manager of Strategic Information, and Market Research Manager. She has worked with Accountants Inc, Adecco, Anritsu, Applied Materials, Cadence, Deltek, FormFactor, Hospira, Merck, MicroWarehouse, Sonoco, SunPower, and many other companies.