I came across an article recently by Jeffrey Gitomer that really hit home. In essence, he said that there are countless awards given out for levels of “customer satisfaction” by many companies including the likes of JD Powers, and Consumer Reports. The winners of those awards publicize their victories in their marketing to attract new customers and give themselves pats on the back. In his opinion, however, all of those awards for “customer satisfaction” levels are meaningless. In fact, he said that not only are they meaningless, they are worthless.
His view is that customer satisfaction is synonymous with “mediocre” and “anyone that posts a ‘satisfaction’ award has an army of people that hate them for the lousy service they provide, AND a bigger army of people laughing at the audacity and the phoniness of the [award]”.
Gitomer explains why, “Satisfaction is the LOWEST level of customer service. And, in the end, means nothing.”
If customer satisfaction is meaningless, what should we be looking at?
“Customer loyalty is all that matters,” writes Gitomer.
A satisfied customer is simply one who believes that the service you’ve provided is acceptable to them. What it does NOT mean is that they would continue to do business with you, recommend your business to their family and friends, or proactively become a brand evangelist for you. A satisfied customer could be one that does business with you because your business is convenient for them. They are happy enough that the inconvenience of going somewhere else outweighs the convenience of staying. That’s not something to be proud of.
What we really should be measuring is customer loyalty. Gitomer defines a loyal customer as; “people who will do business with you again, tell others about you, and refer others to do business with you.”
Your customer loyalty levels have much more meaning than any customer satisfaction statistic or award. CEOs of many of the largest companies in the world started with mission statements not based on growth and market share, but on winning loyal customers. Gitomer poses the example of Hugh McColl, former Chairman and CEO of Bank of America. McColl was a driving force behind consolidating a series of progressively larger, mostly Southern banks, thrifts and financial institutions into a super-regional banking force. Gitomer stated: “His philosophy was simple: ‘I take care of my people, my people take care of my customers, my customers take care of my shareholders.’”
Up until recently most companies have been all about measuring customer satisfaction to judge performance through surveys and various other statistics. How do you measure customer loyalty? It’s simple. Start counting repeat and referred customers, sales and profit. And according to Gitomer; “The rest is bogus.”
Customer loyalty is a circular chain that starts at the organizational level. I’ve written many articles about the importance of customer loyalty, and my company’s purpose is to help businesses retain and create loyal customers, which is why this article really hit home with me. Everything we do at Performance Loyalty Group, including our loyalty program and pre-paid maintenance program, is designed with this exact purpose in mind.
The next time you’re evaluating your company’s performance in relation to “customer satisfaction,” instead of asking, “How did we do?” start asking “Would you give me a testimonial?” Or “Would you refer someone to us?” The customer’s willingness to do (or not do) either one of those things will tell you more about how well you’re doing than any trophy ever could.
What is your business doing to increase customer loyalty?
How do you evaluate your company’s performance in relation to “customer satisfaction”?