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Why customer engagement is the best tool for gauging customer loyalty

Posted by SurveyMe on Feb 21, 2017 8:00:00 AM

It’s no secret. Companies must retain customers in order to remain in business. The difficulty lies in determining which tools most effectively evaluate, forecast, and increase customer loyalty. For the last 30 years, customer satisfaction has been the most popular metric for gauging customer loyalty.  

Customer loyalty levels are defined by past consumer behavior but they fail in predicting how consumers will behave in the future. In the early days of customer research, loyalty only meant the customer hadn’t left for another competitor yet. It couldn't determine if the customer would stick with a company for the long haul.

Customer satisfaction was seen as the solution to the customer loyalty problem. It was thought extremely satisfied customers would continue to buy goods and services which would create stability and grow future profits. Unfortunately, it was difficult to see why customers remained loyal; by the same token, if these customers ended up leaving, there was minimal to no data to suggest why.

As consumer culture continued to evolve, companies found customer satisfaction doesn't always equal customer loyalty. In response, many companies switched from tracking satisfaction to tracking customer engagement.

In order to achieve a large number of highly satisfied, highly loyal customers, companies began to listen to what their customers actually wanted by means of customer engagement. In the November 1995 Harvard Business Review, Thomas Jones and W. Earl Sasser, Jr. reported a prime example of this in the industry of movies theaters:

“An independent multiplex movie theater that we came across in the Southwest last year is another example of a business that excels in figuring out what its customers really want and giving it to them. Its managers discovered that customers’ actual movie-going experience started about two blocks from the theater, where the typical customer, especially one who is running a bit late, enters the traffic approaching the parking lot and starts to become anxious about parking and purchasing a ticket. To address such concerns, the theater’s managers placed attendants two blocks from the theater to sell tickets and help people enter the parking lot. The managers discovered that customers also resented having to leave the viewing area and then stand in line in the lobby to buy food. In response, the theater began to serve food throughout the facility; it even served seated customers until the main features began. Finally, the managers learned that customers detested dirty bathrooms. In response, the theater began cleaning its bathrooms four times an hour. The end result: a large number of highly satisfied, highly loyal customers.”

In this example, customer engagement played a primary role as researchers accounted for emotion as a driving force of the “why” behind the consumer experience. While customer satisfaction can be measured on a quantitative scale such as price or driving distance, customer engagement included all of the emotional aspects of the consumer experience. This can be the anxiety of running late to a movie, the inconvenience of walking a distance to the concession stands and the disgust of unkempt bathrooms. 

Research verified fully engaged customers are far more loyal to brands because they feel an emotional investment in the brands and their employees. Customer engagement proved to be a far superior tool for looking at customer loyalty when compared to customer satisfaction.

Where does SurveyMe fit into all of this?

SurveyMe is built for the mobile generation to help companies engage with their customers to determine how many are highly satisfied and loyal. Once companies reach coveted peak customer engagement, SurveyMe provides the information needed for companies to listen to their customers so when they change the companies can change with them.

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Topics: Business & Marketing

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