Satisfaction Drives Sales, Loyalty Drives Profit….Which Do You Have?

The Difference Between a Satisfied Customer and a Loyal Customer

One of my favorite topics to discuss with clients and in my seminars, is the difference between customer satisfaction and customer loyalty.  To me satisfaction drives short term revenue while loyalty drives long term profit.

I just recently went on vacation and found myself the little Northern Arizona town of Holbrook for dinner.  I had posted some pictures of our trip that day on Facebook as we were headed towards Holbrook.  A very good friend who lives in Australia, where he was at the time and where it was the next morning, saw my post and replied, “If you go to Holbrook, you MUST go to the Mesa Restaurant for great Italian food and awesome Aussie red wine.”  They had been there while visiting the U.S. last year.

Throughout corporate history we have been bombarded with satisfaction surveys.  Marketing executives patted themselves on the back when the surveys showed high satisfaction and freaked out at low satisfaction ratings.  It was not until more recently that people started to look deeper into the relationship between a satisfied customer and revenues.  What they found was interesting, satisfied customers were not always repeat customers.  We all know that repeat customers are the golden goose in any marketplace.  A loyal customer had to be satisfied, but a satisfied customer was not always loyal.

I define satisfied and loyal per the dictionary as “contented; pleased” and “a strong feeling of support or allegiance”, respectively.  Satisfaction in and of itself is not an indicator of loyalty.  It turns out that super satisfaction is the true measure.  A loyal customer is someone who is so satisfied with your product or service that they will not only repeatedly come to you when they are in the market for your product/service, but they also are your advocate in telling everyone they know who is in your market to use you.  

What is super satisfaction?  Obviously, the answer depends on your business.  At it’s heart it is the guarantee that satisfaction will be repeated with each visit, and assurance that their reputation will not be diminished by recommending you.  How about something as simple as making sure your technicians put on those little blue booties before they enter a customer’s home?  Or perhaps a simple follow-up note thanking a customer, or remembering their birthday or anniversary.  I always give bigger tips when the waiter pays regular attention to my group, making sure drinks are filled, problems are resolved quickly, and we get our check when we are ready for it. 

I especially value honesty when it comes to mechanical issues like my heating, air conditioner or vehicles.  If all you try and do is upsell, I won’t be back.  Is constant upselling part of your strategy?  During my recent trip we had a family reunion at a pricey resort.  As the waiter came around during an early breakfast he was pushing Bloody Mary and margarita drinks.  No one was interested, we were a mostly older crowd…it was 8:30 in the morning!   One of my cousin’s asked if the waiter got paid extra for pushing the drinks and the response was “upselling is the name of the game sir, you buy alcohol and I make more on the tip.”  Ouch, what a turn off, especially at a resort charging $22/person for a basic bacon and eggs breakfasts AND they were automatically adding 20% to our bills per prior agreement for our large group.  We were satisfied with the food, the rooms in the hotel, the grounds, but we won’t be back.

When we checked into our hotel in Holbrook I asked the desk clerk what their favorite restaurant in town was and the reply was “We send people to the Mesa Restaurant down the block and people rave about it.”  So, guess where we had dinner?  And you know what?  It was awesome, including the Aussie red wine.  Now you, too, can go to the Mesa when you find yourself in Holbrook and I guarantee you will have an awesome meal…..that is true loyalty, no?

Your challenge this month is to start determining a way to figure out what makes your clients loyal.  If you don’t have truly loyal customers, perhaps it is time to start thinking about them instead of your next sale. 

Mitchell Bolnick – The Excel Consulting Group