The desire to measure customer satisfaction consumes budget and energy in many many businesses. I often wonder why. Businesses also talk a lot about customer loyalty. And I wonder whether they are clear about what they mean by loyalty and what they expect.
Study after study shows that response rates from customer satisfaction surveys are too low to be significant. They also don’t truly represent what people think of the experience of being your customer.
When did you last complete a customer satisfaction survey AND give your answers thought and consideration? Do you honestly think your customers are any different? Did you, like me, just tick off the questions to get to the end of the survey as quickly as possible? Is this something you can build a strategy on?
Studies also show that despite all of the data collected, brands consistently overestimate the level of customer satisfaction they are achieving.
Satisfaction surveys are framed by the business. It isn’t really listening to the customer, it’s about generating data for the business to use. The stated motivation might be to improve customer experience but I suspect it’s often more about justifying budgets and headcounts.
If you’re lucky you may get an indication of how customers feel about some details of what you do. But will you get insights into what else you should be doing? Or into the overall experience of being your customer?
If your child’s schoolwork was rated as ‘satisfactory’, would you be happy?
Sales training expert Jeffrey Gitomer describes customer satisfaction as a measure of mediocrity. With the right survey methods a brand can have an impressive satisfaction score, while offering an unappealing customer experience and still leaking customers.
The critical objective, according to Gitomer is loyalty. But even here brands can easily mislead themselves about what this means. I’ll come to this in a minute.
Net Promoter Score (NPS) is an alternative that promises to get you closer to understanding loyalty and your customer experience.
NPS asks customers how likely they would be to recommend your business to friends and colleagues on a scale of 0-10. People who score 0-6 are counted as detractors, nines and tens are promoters. Subtract the percentage of detractors from the percentage of promoters and you have your Net Promoter Score.
On the face of it NPS looks like a more meaningful measure of your customer experience and loyalty.
A business with a high NPS is probably doing more things right than a business with a low NPS. But there are issues:
- Sample sizes need to be large to yield meaningful data.
- Responses are subjective.
- Results are not specific or actionable (unless you ask follow up questions).
- There is a leap of faith required to relate NPS scores to real loyalty (I haven’t found any data that proves this link).
Also, there is no reliable relationship between what people say and how they act. At the specific point in time when they are asked the question somebody might say they would be very likely to recommend your business.
Will they really do it? Have they ever done it? Will they feel the same way tomorrow? Who knows?
Can customers ever be loyal?
Businesses should be very clear about what they mean by loyalty.
I am loyal to my family, friends and business associates. I could even make a case for being loyal to Queens Park Rangers Football Club. If sitting in a freezing cold stand watching your team lose 5-0 at Southend United isn’t loyalty I don’t know what is. I certainly wasn’t satisfied but I remain loyal.
Am I loyal to a brand in the same way? I may like a brand, I may buy from it frequently. But I won’t feel any emotional anguish if I decide I can get a better deal, better quality or better service somewhere else.
Leading consumer psychologist Philip Graves pointed out how brands can easily misdirect resources in pursuit of an unattainable goal of customer loyalty.
You want customers to stick with you. You want them to recommend you. But don’t kid yourself that they will have the same bonds of loyalty that humans have to other members of their ‘group.’
This matters because many brand publishing and social media strategies seem to be based on pursuing an emotional attachment to a brand that can never happen.
This recent article in Campaign about loyalty schemes misses the point, in my view. Without much in the way of supporting evidence it exhorts brands to ‘go beyond the rational’ with loyalty programmes. This will engender an emotional bond (in some unspecified way).
I would say ‘stick with the rational and do it smarter.’
For example, the article explains: ‘Forrester has proven that in retail and banking, customer experience is a more powerful customer loyalty driver than more rational elements such as price/value perception.’ In what way is customer experience detached from rationality, I wonder?
An excellent customer experience IS the goal. This is something that you can control – not some nebulous notion of loyalty. This is about making things easy and rewarding, and raising the stakes in terms of the risk of inferior service if people switch brands.
Now we are talking about personalisation, highly targeted and well timed content and offers, and easy access to information and resources that are seen by customers to add value.
You could argue that for smaller B2B organisations personal relationships get you closer to something that resembles loyalty. Even so, these won’t withstand too many five nil experiences. And I’m sure you’ve heard the phrase, ‘sorry, but business is business.’
Behaviour is what counts
Whatever people say about your service or how ‘loyal’ they think they feel, it’s what they do that counts.
So I’ll leave the final word with Jeffrey Gitomer: ‘Count the number of repeat customers. Count the number of referred customers. Count sales. And count profit. The rest is bogus.’