“Loyal Customer Since 2008”


This weekend I received my new insurance card.  Written above my i.d. number is “loyal customer since 2008”.  Really?  Am I loyal?  Have they ever asked me?  What do they consider being loyal?  Paying my bill on time? 

 

This bugged me so I started to think about loyalty vs. satisfaction.  Customer loyalty can sometimes go out the door for customer satisfaction if a good enough price break is given or if there are extra incentives. What?  Did I just say that there’s a difference between customer loyalty and customer satisfaction?  You betcha!

 

Lots of people have written about the difference between loyalty and satisfaction, but I think that more people need to talk and write about it.  There is a difference.  I’m satisfied with my car insurance company, but am I loyal to them?  Not if the company listed next in the phone book can give me the same or better coverage for the same amount of money or less.  On the other hand, I am 100% loyal to Nike.  I’ve tried other running shoes and I don’t like them.  I don’t care if I can get a pair of ASICS for 50% less than my Nikes.  I’m a Nike girl through and through and when people ask me what type of shoes to buy, I say Nike.  That’s customer loyalty!

 

Companies can’t mistake customers using them because of short term discounts for true customer loyalty and companies need to be aware of the difference.  Satisfaction is a feeling of gratification while loyalty is faithfulness. If you’re loyal you’re satisfied but just because you’re satisfied doesn’t mean that you’re loyal.  Know what your customers really are!

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4 Responses

  1. There are indeed a few brands or companies to which I’m truly loyal. Top of the list is USAA, the insurance and financial service organization. I sometime price shop the competition, but doing business with USAA is so east I won’t switch unless the difference was huge (and it never is). I put Hilton Hotel properties in the same category as well as BMW automobiles. These businesses have their act together and have earned my loyalty!

  2. Maeve:

    Great observation.

    How would a company know how you felt about them and why? I often hear execs say, “sales data are the most reliable indicator of loyalty — they don’t lie,” or something to that effect. Of course, they have trouble answering a few follow up questions, like:

    – Do your sales data give you a sense of the share of each customers’ spending you have earned?
    – Do your sales data provide insight into why your customers spent that much with you?
    – Do your sales data provide any insight into whether a given customer is at risk of attrition? How close you might be to the edge of frustration, anger and hostility (or, alternatively, elation, joyful exuberance and enthusiastic advocacy)?

    Worse still is a company telling you how loyal you are, when they have no idea. It’s mighty presumptuous, and so disingenuous as to erode trust — the underlying foundation for loyalty.

  3. thanks, your article is very informative. : )

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