This week is vacation planning week, apparently: I’m doing last-minute logistics planning for a cruise over spring break as well as scoping out private tours to take in Italy/Greece/Turkey for our honeymoon in the Fall and I have had two very different experiences.

I have emailed about 8 small tour companies in Europe and in every case, received a response in less than 10 hours (and in a few cases, an immediate email auto response indicating that I’d definitely get a response within 24 hours)—no small feat since there is at least an 8 hour time difference.  The responses were personal, customized to some degree to respond to my specific questions, and very thorough.  I had all of the information I needed within 10 hours of my request.

My experience trying to find a shuttle to the airport in San Diego for my Mom was entirely different.  I still haven’t gotten a response to 3 different emails after 48 hours!  And I have no idea whether I ever WILL get a response, meaning that if I’m really serious about needing a shuttle, I’ll need to get on the phone and probably will book the first company I talk to vs. making an intelligent decision based on several choices.  Someone is going to get my business only because I don’t have the time to do more work on this…not necessarily because they deserve it.

In the case of the European ‘service delight’ examples, after the first response, I thought it was an exception…but when I received consistently amazing service from all 8 vendors, it made me think “Maybe they are really hurting for business there…”  And then after the consistently disappointing experience re: the airport shuttle, it made me think that there may be something bigger at work here.

This challenging economy we are in has shaken companies up, however, I’m concerned that many companies are responding by slashing prices vs. providing more value.  Understanding what your customers value and delivering on that very well is much more effective when it comes to customer loyalty than price cutting (see this great article on the topic).  But, obviously, not all companies practice that approach.  Is it possible that Europeans in general, or at least those in the European travel business, understand this better than American companies?

Note: I definitely did not get the impression from the travel vendors I heard from that they were ‘desperate’ for my business and ready to bargain on price…they were proud of what they had to offer and eager to provide an exceptional experience, not only in the ‘shopping’ process, but extending to the actual tour.

I tried doing some Googling to see what I could find on European customer service levels vs. American customer service levels, but came up empty…perhaps some of you have personal experience to either confirm or deny my hunch?  Would love to hear from you…and would love to see some major focus from our U.S. companies to make it easy to work with them vs. slashing prices.  It may be key to our long-term recovery…

Yesterday I spoke rather spontaneously during the final session of the 2010 Silicon Valley P-Camp - the third annual Silicon Valley ’un-conference’ focused entirely on Product Management topics/issues.

Spontaneous talks are not uncommon at an un-conference…the whole concept is that anyone can submit a topic for consideration and attendees vote on what they are most interested in. I came to the conference with a topic I thought of that morning and 20 handouts that I printed before I ran out the door (I thought that bringing any more than that would be a bit presumptuous!) and lo and behold my topic was chosen by popular vote to be one of the 12-15 afternoon sessions!

When I say ‘spontaneous’, I really mean that…this is the first time I have EVER facilitated a 45 minute session with absolutely NO agenda, just a broad idea of the topic: “Choosing the Right Methodology for Gathering Customer Input”.

We ended up with 30 people all crammed in a small meeting area to explore this topic, specifically focused on using customer input for product development/marketing/launch purposes.  The session was very interactive and one of the things we discussed before getting into the meat of the topic was why product managers so seldom actually integrate any customer research into their work to launch great products.

I came with my own theories, but we had an active dialogue and below is a list of some of the reasons that came up…I’ll be blogging about some of these in the future, but wanted to provide a summary list here:

We talked about each of these obstacles, and debunked most of them, but it was important to ‘go there’ before talking about how to choose the right tools.  According to The 280 Group’s 2009 Product Management survey, the top 3 sources of influence on product management decisions are:

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.