Why differentiate? Customer Loyalty vs Customer Satisfaction

A little bit ago, I wrote on Micro vs Macro and the customer experience. In there, I alluded to separating the two typical terms of customer experience measurement.

Why should we differentiate between loyalty and satisfaction? I’ve been asked this a lot in the past while and, really, it’s a good question. We’ve been targeting Customer Satisfaction for years. What’s wrong with this measurement?  At its root, there probably isn’t anything wrong with it and if it’s the measure that works for you and your business, then I would suggest continuing down that path.  That having been said, maybe it’s time to broaden your view and elevate your expectations.

Here’s some relevant definitions for this discussion:

What is a Customer: one that purchases a commodity or service (http://www.merriam-webster.com/dictionary/customer)

What is Satisfaction: a result that deals with a problem or complaint in an acceptable way (http://www.merriam-webster.com/dictionary/satisfaction)

What is Loyalty: the quality or state of being loyal (http://www.merriam-webster.com/dictionary/loyalty) …. Don’t you hate it when definitions seem a bit circular…

What is Loyal: having or showing complete and constant support for someone or something (http://www.merriam-webster.com/dictionary/loyal)

Now that we have that out of the way, which seems more appealing to you? A one time result that deals with a problem or complaint in an “acceptable way” or a customer that shows complete and constant support? I know which one I’d prefer to have as someone doing business with my company.

The only way to do this, however, is to really understand the lifecycle of the customer and the entire process.  It’s not always possible to satisfy someone 100% of the time (at least not while also staying in business), but it is possible to build a person’s loyalty by treating them right, providing them stellar service, great sales, and excellent interactions throughout the start to finish of their partnership with you as a company.


Level 5 Leadership

Jim Collins, author of “From Good to Great” (a great read in and of itself, mind you), created a concept he called “Level 5” leadership.  In 1996, his research began on what separates good from great in terms of companies and leadership.  He started with over a thousand companies and narrowed it down to 11.  In doing so, he also came up with the concept of “Level 5 Leaders” and defined the leaders of these 11 companies accordingly.

There are not many Level 5 leaders, but if you can attain this level of leadership, your employees will find that your company is generally great to work for.  The levels are defined as such:

Level 1: Highly Capable Individual

At this level, you contribute a great deal — with your job and your personal action. You have talent and skills, but aren’t necessarily leading yet.

Level 2: Contributing Team Member

Your knowledge (level 1) is used to contribute to your team and making sure that everyone succeeds.  You’re proactive, you’re effective and you raise the productivity of those in your group.

Level 3: Competent Manager

You can organize a group and achieve goals.  At this level, you’re still able to succeed and bring value to the organization.  Many people fall in this category.

Level 4: Effective Leader

This is where the pack begins to fall away. Many of the top leaders fall into this category — able to bring together a department or organization to achieve a vision and drive towards (or exceed) performance objectives across the board.

Level 5: Great Leader

If you’re able to achieve this pinnacle of leadership, you have all 4 other leadership levels AND the unique trait where you can pull humility and will together to succeed as a great leader.

It is possible to learn, train, and grow to any of these levels.  It takes significant effort and certain work to get there. In order to attain this, you need to:

  • develop humility — you’re not perfect. Stop being so arrogant.
  • ask for help — use the expertise of those around you to strengthen your execution.
  • take responsibility – you’re the leader. If something goes wrong, it’s up to you. No excuses and definitely don’t throw your team under the bus.
  • be disciplined – commit to a course and execute on it. Listen to opinions, but don’t let fear drive your decisions or force you into  changes that you’re not sure about.
  • find the right people – you CAN’T succeed on your own. It’s simply not possible.  Surround yourself by the best.
  • believe – be passionate about what you do. Show that you love and believe in what you’re doing. This leads by example for your team.

All in all, it’s possible to truly elevate your skills … focus on this list and  even if you never hit the top, your team will still love you all the more for it.

Corn, Teamwork, and Decisions

Back in 2006, I was reading a blog by “The Rainmaker”, Rick Roberge, that I wanted to dredge up from the annals of history.   The MIT class president of 2006 told a story about corn.  Fascinating, isn’t it?  Well, honestly, the story itself made a lot of sense and drives home how working together brings the best food (foot ;)) forward for everyone.  This farmer was both a good neighbor (sharing his corn) and a selfish one (looking to ensure his corn wasn’t degraded). Yet the net of the matter is that everyone benefited — a positive impact. Be aware that your decisions and your choices can have a lasting impact on yourself as well as those around you.

Here’s the story…

“There was a farmer who grew corn. Every year his county held a contest to determine which farmer grew the best corn. Every year he won. Year after year this farmer grew the best corn in the county and he won the award. One day, a visitor noticed that this farmer gave some of his best seed to one of his neighbors. The visitor asked why he was sharing his best seed with his neighbor. Wasn’t he concerned that their corn would be better than his? Wasn’t he concerned that they would eventually win the contest for having the best corn in the county? The farmer explained that the winds in the county pick up the corn pollen from all of the neighboring farms and deposit it to all of the other neighbors, so some of his corn pollen ends up on his neighbors’ farm and some of his neighbors’ corn pollen ends up on his farm. If his neighbors’ corn was very inferior and it was deposited on his award winning corn, wouldn’t his own corn become less superior. By sharing his best seed with his neighbors, the pollen that was deposited on his farm was better than it would have been had he not shared and his corn wasn’t degraded by the blown in pollen.” (Kimberly Wu, class president of MIT, 2006 as posted by Rick Roberge).

Customer experience pitfall — focusing on the micro

Michel Falcon is a public speaker and business coach in the space of customer experience.  He posted something a little while ago called “Customer Experience isn’t Customer Service.

In that blog, he had a single line that struck me as excessively poignant.

Customer experience is the premeditated design of what your customer experiences when doing business with you from beginning to end.

Too many companies focus in the micro-transaction instead of the macro-experience around the customer. Elevating the experience from mediocre to phenomenal takes a lot more focused effort than how do I handle this single transaction, this single event.  There is a massive difference between how someone implements their business and focuses on the customer.

All too often, companies make the statement of “we’re customer focused”.  What does this mean?  In many cases, it means that they handle the individual micro-transaction with the customer well or it means that the company is rated A+ on the BBB or it means that they have a 5 star rating for customer service on Yelp.  When you drill down into the depths of this, the fact is that the majority of the BBB or Yelp ratings are based on a single event – a single opportunity to do well or badly. It doesn’t mean that there is a strategic, concerted effort to build a customer experience from start to finish for the entire lifecycle of that customer.

Similar to the difference between Customer Loyalty and Customer Satisfaction (which I’ll cover in another blog post), Customer Experience and Customer Service are two separate entities.  One speaks to the way that you service a complaint or deal with an order.  The other, the more broad reaching, speaks to the overall impact that your business can have.

Customer Service leads to Satisfaction. Customer Experience leads to Loyalty. 


Blogging & Me

I’ve blogged on and off for years (mostly off), so please realize that this won’t be a traditional “posts once a day/week/etc” blog. The purpose behind setting this up is to bridge professional, networking and personal drive in a location that I can write at a more strategic and global level than I can in my regular work environment.

Posts will likely be varied in nature with a focus around customer loyalty, service functionality and support organizations.  Posts will be made as things draw my attention across the news, issues that come up in discussions or I feel the need to write about something.

Please feel free to contact me or add comments if you have specific topics you’d like me to discuss!