The best way to figure out what your customers think of your business is: ask them. Profound, right? Surveying your customers can provide you valuable insight about your products or services that you can only rarely experience for yourself. What are your customers experiencing? How are they responding to recent changes? How are they interacting with your employees? What products do they like best and why? Knowing these details can be extremely beneficial as you constantly work to improve your customers’ experience with your business, products and services. But even with the most insightful details, these results can be misleading… if you are using them to track the wrong thing.
Inevitably, the one prompted response every customer survey includes is the one that can be the easiest to misinterpret: On a scale of 1 to 10, please rate your most recent experience, with 1 being Very Dissatisfied and 10 being Very Satisfied. Many businesses erroneously equate “Very Satisfied” with “Loyal” when this is not necessarily the case.
A satisfied customer is exactly that: satisfied. But that doesn’t mean they have any intent to repurchase your product or service – or even revisit your business. An auto analyst at J.D. Power said it best: “A satisfied buyer is a repeat buyer – maybe.”
Customer loyalty, however, can be used to more reliably predict sales and financial growth. While satisfaction is an attitude, loyalty is a specific buying behavior.
A loyal customer:
• Makes regular repeat purchases.
• Purchases everything you sell that they could possibly use.
• Encourages others to buy from you.
• Demonstrates immunity to the pull of your competitors.
It should be noted that each trait of loyal customers contributes – either directly or indirectly – to your sales; so as your loyalty base grows, chances are your sales will too.
Harley-Davidson Inc. provides perhaps the best example of how loyal customers work. Harley is a household name known by old and young alike. The bikes are American icons to many, often recongnized by sound before they’re seen. Even young children know they’re HOGs – even if they don’t know what HOG really means. With over 1 million members, the Harley Owners Group is considered one of the closest, most loyal groups of consumers in America.
So how does Harley do it? They understand their target market better than almost any other retailer out there and – by meeting their target customers’ needs – they constantly grow loyal customers.
Harley customers clearly exhibit all four buying behaviors of loyal customers:
Makes regular repeat purchases. To Harley owners, their bike is a grown-up’s toy, constantly being upgraded and customized. They purchase the newest models and customize their bikes with new seats, pipes, headlights and many other available accessories.
Purchases everything you sell that they could possibly use. In the mid-1990s, Harley’s line of branded merchandise exploded. They now sell everything from the classic Harley black leather jackets to branded key chains, belt buckles, bras and snow globes. Customers can create wishlists to send to their friends and family through the Harley-Davidson website. And loyal Harley customers keep coming back for more each time new swag is released.
Encourages others to buy from you. Harley owners say there is no known cure for Harley fever, and with HOG membership at over 1 million, the fever is spreading. But when was the last time you saw a Harley-Davidson advertisement? They’re out there, but maybe not as prevalent as they once were. Like many companies with a large loyal base of customers, Harley can rely significantly on word-of-mouth advertising.
Demonstrates immunity to the pull of your competitors. Many Harley owners believe they ride the only true motorcycles on the road. But Harley doesn’t simply sell motorcycles, accessories and swag; the company sells community, identity – even freedom. Harley sells a complete experience that would be near impossible to replicate. To loyal Harley owners, there is no competition.
Harley-Davidson doesn’t settle for satisfied, and neither should you. When surveying your customers, be sure to ask questions that help you understand their buying habits. Don’t limit yourself to finding their level of satisfaction; aim to find those who are loyal – and to keep them that way.
How do you measure customer loyalty?
What types of questions could you use in surveys to help you gauge loyalty?
Do you use a loyalty program? Loyalty programs can help you track your customers’ purchases and determine who your most loyal customers are.