The Happy Creative BLOG
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January 24, 2012
Why satisfied customers defect...
Customer loyalty is the feeling of attachment or affection for a company’s people, products or service.
Generally it’s accepted that the more competitive the market the more important the level of customer satisfaction. What’s not always appreciated is how important that level of customer satisfaction is.
In markets where there is intense competition (most markets) there’s a huge difference between the loyalty of a ‘simply satisfied’ customer and a ‘totally satisfied’ customer.
It is, therefore, essential for companies to excel in both defining its target customers, and delivering a product or service that completely meets their needs.
There are five areas that affect customer satisfaction:
1 the basic elements of the product or service that customers expect
2 basic support levels
3 a recovery process should things go wrong
4 extraordinary service
5 the overall customer experience
Except in a few rare instances, total satisfaction is the key to securing loyalty and generating long term financial performance.
Here’s six top tips for customer satisfaction best practice.
1 Analyse each of the five stages above and ensure that you are adding value at every stage.
2 Cherish your loyal customers. Generally speaking a customer who is completely satisfied keeps returning. Within this band of customers will be individuals who are so satisfied that they become brand champions, sharing with others their great experiences with you. Find your champions and introduce a champion care programme.
3 Know your defectors; these are the customers who are a little (or completely) dissatisfied. The satisfied defect too. Know who your defectors are. Give them attention when things go wrong, listen to them, respond to them, correct their bad experiences. Preventing defectors from leaving can positively influence your customer retention.
4 Identify the mercenaries; these customers may be completely satisfied, however they show little loyalty. They chase low prices, buy on impulse and seek change for changes sake. With these customers it takes as much effort to please them as the loyal customers, but they do not stay long enough for the relationship to be profitable. Knowing who these customers are can help you make strategic marketing decisions as generally no matter what you do, they will go elsewhere.
5 Locate your hostages; these customers feel they are stuck. They may experience the worst but must accept it. Hostages are often difficult and expensive to serve. They may be stuck but they complain and can devastate company morale. Recognising this type of customer early in the relationship means you can help move them into a different category or move them out. The general rule is that customers should not feel trapped.
6 Listen to your customers; use customer satisfaction ratings in surveys to understand the level of satisfaction. Plotting results can help you understand how satisfied, or otherwise, a customer is. You can survey satisfaction with both the company in general and with the products and services. Have processes in place for regular feedback, and ask your team to report on what they hear.
Companies that survive and flourish are companies that continually work to understand the relationship between satisfaction and loyalty. In short, Happy customers are loyal customers.
Karen Lambert is an experienced strategic marketer and Managing Director at Happy Creative, a full service marketing agency based in Blackpool, Lancashire. To learn more or contact us please go to www.happy-creative.co.uk