Customer Satisfaction vs. Customer Loyalty

69% of customers say they shop more frequently with the brands, offering consistent customer service. 43% of customers say they spend more with brands they are loyal to. 

Good customer service forms satisfaction. If leveraged and managed correctly, it turns into customer loyalty. What do brands need to do to turn satisfaction into loyalty? 

What Is Customer Satisfaction and How to Measure It?

Customer satisfaction, or CSAT, is a marketing term used to describe the level of customer satisfaction with a particular product or service. 

70% of customers will rate the quality of service if asked. For businesses, asking is one of the easiest ways to measure customer satisfaction. It can be done either via an email survey, live chat rating, or rating after the phone call. 

What Is Customer Loyalty and How to Measure It?

Customer loyalty is a definition of an ongoing relationship between a satisfied customer and a brand. It is a more complex concept than customer satisfaction. To measure customer loyalty brands need to answer the following questions:

• Do customers return to make repeat purchases?
• How often do customers return?
• Do customers buy more or less with every subsequent purchase?
• Do customers rate the services and help the business by spreading word-of-mouth advertising?

A Net Promoter Score (NPS) is a metric measuring how likely your customers are to recommend your business to their friends and family. By using a simple ‘How likely on a scale from 1-10 are you to recommend our services to your friends and family?’ businesses can count it by separating their customers into three groups:

Promoter (10-9)

⭐️ This is customer loyalty at its best.

These are the customers who will advocate for your business. Not only will they come back to purchase from your company, but they will bring you more business by referring their friends and family. 

Passive (8-7)

These consumers demonstrate their customer loyalty and customer satisfaction up until the point they get a better offer. They may rate your services with the highest points, but they will not stick around if offered something better. 

Detractor (6 and Lower)

These customers’ loyalty is practically non-existent. They are not likely to let a business fix its possible mistakes, and they will never advocate for its services. They are not dissatisfied with a brand, but they will not stall when it comes to giving a business a negative review. 

By subtracting a Detractor score from a Promoter score, a business can count its Net Promoter Score.

How to Turn Customer Satisfaction Into Customer Loyalty?

Before turning loyal, every customer has to first be satisfied with the service and the product. While satisfying customers’ needs might be somewhat easy — just keep the quality of your service, product, and customer support on a consistently high level — going from satisfaction to loyalty is difficult. 

Make Customer Communication Efficient

89% of customers have switched their customer loyalty preferences because of the low quality of customer communication. Optimizing customer communication includes: 

• Covering any customer communication channel — chats (preferred by 41% of customers), phones (preferred by 32% of customers), emails (preferred by 23% of customers), and social media (preferred by 3% of customers). A customer support team should be able to cover all of them and provide quick and consistent answers through each of them to ensure a high level of customer satisfaction and convert it into customer loyalty. 
• Making customer support communication omnichannel — covering all channels might not be enough. To ensure a high customer satisfaction level, brands should be able to provide omnichannel customer support. Companies with an omnichannel approach on average have 89% higher customer satisfaction and retention rates, which means their customer loyalty level is also higher.
• Providing answers to common questions with FAQ — 53% of customers claim that not being able to find answers to common questions is their number one reason for frustration. Forrester says 53% of American adult buyers abandon a cart if they cannot find an answer to their question. This means they cannot even start the process of forming their customer satisfaction, let alone loyalty. Compiling a FAQ page or file, and making sure customers can easily find it, is a sure way to increase customer loyalty. 
• Implementing chatbots when necessary — according to Comm100, the average customer satisfaction rate for chatbot is almost 88%. According to consumers, the main chatbots’ advantage is that they provide answers around the clock. This allows businesses to satisfy the need of 82% of their customer base to be answered instantly, no matter the time of day. 

Optimizing customer communication and making it more efficient will ensure the customers feel comfortable and satisfied enough to turn loyal. 

Increase Customer Engagement

Customer engagement is the entire scope of customer-brand interaction, starting with a customer’s intent to purchase all the way up to post-purchase service.

54% of customers say brands need to invest more into their engagement strategy. Its development includes it all: from developing and implementing an omnichannel communication system to offering customers different loyalty programs. And speaking of…

Implement Loyalty Programs

52% of customers say loyalty programs are the reason they stick with a particular brand.  

There are 6 different types of loyalty programs:

1. Tiered

By offering an initially small reward, businesses may ensure customer satisfaction and push customers towards a longer collaboration by offering the increase of the reward as the customers keep on purchasing or using the service. The longer the customer stays with the brand and the more they purchase, the bigger is the reward and the higher the chances of the customer loyalty is.

Example: Uber has three different tiers. The lowest one does not offer any rewards, the second, Gold tier, offers flexible cancellation and other small benefits. The highest, Diamond tier, offers free Uber Eats deliveries and priority airport pickups among other things. 

2. Coalition 

Coalition program allows businesses to not only turn their customer satisfaction into customer loyalty, but to grow their customer base. Businesses developing a coalition program partner with other businesses operating in the same field and offer their customers the possibility to get discounts or use special offers from their partners. 

Example: Hilton hotel chain has partnered with multiple hotels around the world and offers travelers different advantages, such as access to Wi-Fi, digital check-in, and premium gifts. 

3. Point-based

Point-based customer loyalty program is the most popular one. A customer purchasing something from a brand gets points assigned to their account, making sure they can fully or in part pay for their next purchase. 

Example: The North Face offers its customers 10 points for every $1 they spend in its online and retail shops. The customers are free to pay for any future purchases with these points, partially or in whole. 

4. Value-based

While not offering any physical rewards, a value-based customer loyalty program resonates with the customer base’s values. As a result, not only do satisfied customers turn loyal, but they also start trusting a brand more. One of the most popular value-based rewards is brand donating customer’s points to charity. 

Example: Lush donates all profits from the sales of a specific body lotion to the charity of their choosing. While this means the brand does not profit from the sales of a particular product, it does earn the brand additional points when it comes to customer trust.

5. Game-based

With game-based loyalty programs, customers can earn their reward by completing a certain series of actions. Good examples of game-based loyalty programs are lotteries that customers can enter and win different rewards and prizes. 

‼️ Note: this type of loyalty program requires a tight collaboration with a legal department. The program should be see-through and fair. 

42% of customers want to be recognized and incentivized because of how long they have been sticking with a certain brand. Developing a good customer loyalty program would mean encouraging them to turn loyal. 

Ensure the Highest Level of Customer Support Quality

Quality customer support may play a pivotal role in ensuring a high level of customer satisfaction and loyalty. By being the face of customer communication, support teams can ensure a high level of customer satisfaction by: 

• Retaining a consistent level of customer communication.
• Offering a personalized approach to every customer.
• Delivering customer-centric values.
• Escalating customer feedback to the appropriate professionals.
• Making sure the customers are heard and understood. 

A professional customer support team should be trained to deliver customer service of the highest quality or outsourced to a professional support as a service provider. This way, no matter why your customers contact your team, they will always be satisfied and ultimately turn loyal. 

Satisfaction vs. Loyalty

While both are important, loyalty is more complex than satisfaction: 

• Satisfaction is about understanding what your costumes need right now and satisfying this need instantly. 
• Loyalty is about understanding who your customers are and how to provide each of them with the best service time after time. 

By understanding the nature of the two, brands can satisfy as many customers’ needs as possible, which will ultimately turn them loyal. 

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