The Difference Between Service, Satisfaction, & Loyalty

In an attempt to create a loyal following, Leaders are often disappointed because they confuse the concepts of Service, Satisfaction, and Loyalty. While error-free service and pleasant interactions are key components to any product offering, loyal customers are the only ones that can help you grow your business (see Raising the Bar on Customer Satisfaction http://wp.me/p28Mqi-7) and create the environment that leads to continued innovation.

A quick story that illustrates the differences between Service, Satisfaction, and Loyalty:

SERVICE

Mr. Smith walks into a banking center with tall pillars, marble, mahogany teller windows – he could feel “money” in the air. Then he saw a maze with 10 people in line. Since there were 10 tellers, he figured he was 2nd or 3rd in line. So far so good.

He came to the head of the line and looked to the right. Then he heard a woman shout from the left “NEXT!” As he approached the teller, she was looking down – but when she looked up, he was certain that she hated him.

When he asked for change for a $50, she quickly counted out the change, handed it to him, and yelled “NEXT!”

He checked his change, and it was correct – No Defect!

SATISFACTION

Now what if at the head of the line he heard “Could I please speak to the next gentlemen in line?” He was given correct change and was thanked for coming.

This is satisfaction.

LOYALTY

Even better, what if at the head of the line he heard: “Mr. Smith can I help you?” When the change was counted out, he was handed $45 in change and 5 silver coins because “I know you collect them.”

This is Loyalty.

LOYALTY FUNDAMENTALS

Of course there is more to earning a customer’s loyalty, but there are some fundamental truths that cut across industries:

  1. A great product is reliable and personal. This means no defects, timely delivery, and delivered with appreciation and care for the customer.
  2. A brand is a promise. If a company doesn’t keep that promise in every interaction, they are not seen as trustworthy. If they aren’t trustworthy, they are seen as liars which ultimately chips away at the brand.
  3. Employee Engagement. Every employee in the company knows the values top to bottom and the values are aligned with the customer’s needs.

In addition to more referrals and expanded share of wallet, employees discover unmet customer needs when their primary focus is delivering a great experience. These unmet needs are the seeds of innovation that ultimately keep you ahead of the competition.

Key Drivers Ed: How to find opportunities for big improvements in Customer Delight

“Knowledge is the process of piling up facts; wisdom lies in their simplification.” – Martin H. Fischer, American Scientist, educator, and author

Focusing on Customer Delight is an admirable goal, identifying the specific issues that have the biggest impact on the customer experience is where the real work begins.

I call them “Key Drivers” of delight and dissatisfaction.

Drivers of delight are outstanding service or product related features that help build customer loyalty. Drivers of dissatisfaction are problems and other shortcomings that damage your relationship with customers.

Finding these drivers is one of the most important steps in the entire business improvement effort. Because once we identify the drivers, we can develop targeted initiatives to increase customer delight and eliminate customer dissatisfaction.

These improvements in turn, boost customer loyalty, decrease attrition, increase share of wallet and generate favorable word of mouth advertising, which helps attract new customers.

A brief introduction to drivers inspired by my refrigerator

Let’s consider the impact of a common household appliance – the refrigerator – on delight and dissatisfaction.

When I take the milk out of the refrigerator, I don’t say, “Wow! That’s cold. Isn’t that great?” And I don’t sing the praises of the manufacturer either, because I expect the milk to be cold. That’s why I bought it in the first place. In other words, the refrigerator isn’t a driver of delight, because its just doing it’s job. And that’s exactly what I expect.

But what happens if the refrigerator goes on the blink? The unexpected failure is going to spoil the milk and make me very unhappy. If I go to the extreme, I will probably never buy anything else that carries that brand again — whether it’s a stove, microwave, vacuum cleaner, or anything else.

From the manufacturer’s standpoint, that’s bad enough. But the situation can get even worse. After all, I will probably tell friends and family members about my unhappy experiences with the refrigerator. And some people I talk to avoid that brand in the future too.

That gives you some idea of the huge impact drivers of dissatisfaction can have on customer loyalty, word of mouth advertising and the bottom line.

Drivers change with the times

Now, let’s turn back the clock, and you’ll see a different side to the refrigerator story. After all, when the electric version of the icebox first hit the market, people were delighted. Even if it didn’t work perfectly all of the time, it was still a driver of delight, because it provided a new exciting, time-saving convenience. As the years passed, however, reliable refrigeration became so commonplace that it lost its ability to delight people.

So what happened? Manufacturers add icemakers, cold water taps and other bells and whistles. And for a while, each of these innovations did cause customer delight. Then they too became commonplace features that met – but did not exceed – customer expectations.

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