Customer Experience

What’s the difference between customer satisfaction and customer loyalty?

Written by Gracie Anderson

Most small business owners and marketers are unable to differentiate between customer satisfaction and customer loyalty. How often have you thought that the customers who seem satisfied with your product would stand the test of loyalty? This article will dissect what differentiates the two.

How is Customer Satisfaction different from Customer Loyalty?

When it comes to measuring Customer Satisfaction, we only consider a customer’s attitude towards the last interaction that he or she has had with the business. If there was an issue that had been resolved, the customer is likely to go back to being satisfied with the service. On the other hand, when we talk about customer loyalty, we need to understand that it is something that requires a long-term investment to develop.

For instance, let us consider the same customer from the previous example who goes home satisfied. Despite the satisfaction, the customer might still be upset that he or she had to contact the customer support agent in the first place. Customers often have many expectations of a business and if you fail in one of the areas, they might decide to shop elsewhere. If a customer is forced to contact customer care repeatedly, the chances are bleak that the customer will stick around.

Is it starting to make sense? Customer satisfaction is a transactional parameter which isn’t permanent. You cannot infer customer loyalty from a one-time satisfied response.

What sums up to customer loyalty?

Customer satisfaction is a short-term victory that leads to customer loyalty. It is through customer satisfaction that you achieve the long-term goal of turning your temporary customers into a faithful user base. You need to understand that loyal customers are your ultimate goal because they are the ones who will give you better business and yield better revenue. Loyal customers can be your brand’s biggest advocate, helping you generate more traffic. That is precisely why every business needs to know how to value each customer to convert them into a loyal client who will recommend you and invest more money in you,” says marketing analyst, Morgan Brown.

When it comes to Customer loyalty, you must know that the concept has two crucial factors that need to be taken into consideration,

(a) how a customer feels

(b) how the customer behaves

For instance, one of your customers might recommend your brand to someone else because they have liked your product, but never make repeat purchases from you due to the price of the product. Take the ride-hailing service, Uber, for example. When a customer opens an Uber account they are given an introductory offer of 20% discounts on the first five rides that they take. Additionally they are notified that if they sign a friend up using a unique referral code, they will earn extra discounts.

How do we measure Customer Satisfaction?

Customer satisfaction score or CSAT is the best way to measure customer satisfaction. For example, you might have noticed how Amazon asks you to rate a delivery after your order reaches you. A CSAT can help you to get an insight into your performance. A high CSAT would mean that the buying experience had been good while a low CSAT would indicate a loss of customers. You can also conduct a CSAT survey to determine how your customers feel about the after-sales support that has been provided to them.

How do we measure Customer Loyalty?

Measuring customer loyalty can be difficult because attempting to understand customer behaviour is a delicate process, largely due to the obvious fact that no two customers respond in the same way. Moreover, to add to the complexity, you need to measure both the feelings and the behaviour of your customers.

  • How do you measure customer feelings?

I am sure you have used several smartphone applications that ask for a rating and whether you are likely to recommend the app to others or not. This is a direct way to assess how your customers feel about a product or a service that they have used. What you can also measure is the number of customers who placed their first order using a referral link. This would help measure how many of your new customers have come through recommendations given by your previous and existing customers, thus helping you measure how many customers feel loyal towards your brand. You can also carry out a product survey asking your clients how they would feel if the production and supply of a product or service that they purchase from you is iterated on or possibly discontinued. Listening to whatever feedback that is accumulated from such surveys will tell you a lot about your customer base and how you can best continue to serve them.

  • How do you measure customer behaviour?

At times, even the most loyal customer who loves your business might switch to other products. It is largely as a result of a change in their needs and preferences. This is the main reason why it becomes imperative that you not only measure their actions and what they do, but also keep an eye out for what they say about your products and services.

Measuring the churn rate would also be a good option. For the ones who are not aware of what churn rate is, it measures the percentage of accounts that have been cancelled and the revenue that has been lost due to the cancelled accounts.

You can even measure how many customers are consistently active and who use your products and or services on a daily basis. Active users always tend to be more loyal, therefore you need to be extra vigilant in keeping them satisfied.

How to capitalise on Customer Satisfaction and ensure Customer Loyalty?

Wondering what you can do when you want to make sure that your satisfied clients stay faithful to your brand? Here are a few suggestions for you:

1. Enhance the purchasing experience

Making the purchasing process easier for your customers can make them purchase more from you. Customers typically complain that despite the excellent quality of products, they have refrained from making a purchase because they have found the process to be gruelling. It is mandatory to keep things simple and easy. As a matter of fact, some industries face cart abandonment as high as 80% while others as low as 60%. That’s quite huge  a percentage to deal with. However, if the business owners employ some clever strategies to enhance the shopping experience for shoppers, this percentage can surely be brought down. Some of the most effective strategies to enhance the shopping experience include:

  • Keeping a check on their net promoter score (NPS) to better learn how their customers feel about purchasing from their website.
  • Improving customers’ online shopping experience by investing in website appearance and functionality.
  • Enhancing website speed and being mindful of mobile responsiveness.
  • Providing a 24*7 support throughout the shopping process
  • Sharing customer experiences with everyone so that people get an idea of what purchasing from you is like.

Employing these strategies, would not only help enhance customers’ shopping experience but also eradicate the problem of cart abandonment to a large extent.

2. More the engagement, the better

Customers often don’t just want to buy from you, but they also want to connect and resonate with your brand. Whether this is done on social media, email, phone calls or otherwise, make sure that you communicate with your customers and engage with them. Request that they write a review if they were pleased with the product and or service and thank them when they do so. Following up with personalised emails also serve to better enhance their experience.

3. Exceed the expectations of your customers

Just meeting expectations isn’t enough. Meeting expectations would mean your customers are satisfied. If you want to turn them into loyal clients, you need to go the extra mile. Delight your customers by giving them surprise discounts or personalised offers on products they have saved in their shopping carts for a long time. Send freebies and ‘Thank You’ notes and offer free shipping once in a while.

Although keeping a close watch on your customer’s experience is a critical part of ensuring you consistently scale your business and moving forward at a good pace but that certainly isn’t all there is to it. You need to take measures to ensure your customers are not disappointed in you. Considering that low customer satisfaction can contribute to disloyalty, you need to exceed their expectations to create a long-term relationship with each of your customers. You also need to understand how and why they act the way they do. This will help you to keep your clientele engaged and increase the chances of a long-term sustainable relationship.

“The opinions expressed by BizWitty Contributors are their own, not those of BizCover and should not be relied upon in place of appropriate professional advice. Please read our full disclaimer."

About the author

Gracie Anderson

Gracie Anderson is a marketing analyst associated with the assignment expert brand EssayAssignmenthelp. She is an active blogger and a business spokesperson. In her free time, she loves to spend quality time with her family.

Leave a Comment