Engagement: Key Customer Loyalty Indicator  

    While the presumption has been that satisfied customers will remain loyal, customer satisfaction can no longer be relied on as a metric to predict loyalty. Yes, customer satisfaction is a component of loyalty, but it is not the totality. For instance:

    • 40% of satisfied customers switch suppliers without hesitation (Forum Corp).
       
    • More than 60% of defecting customers indicated they are satisfied right before they left (BusinessWeek).
       
    • 65%-85% of customers who choose a new supplier claim to be satisfied to very satisfied with the former supplier (Harvard Business Review).
       
    •  85% of customers claim to be satisfied, yet willing to switch to other suppliers (University of Texas).

     As this research shows, one can be completely satisfied with a company’s product or service, but chose not to continue to do business with it.

    If satisfaction is not an effective metric to predict loyalty, then what is? Engagement. The stronger and deeper a customer is engaged with the brand, the more loyal she will be.

    Look, for example, at such beloved brands as Apple, Nike, Nordstrom, Ritz Carlton, Harley Davidson, and Trader Joes. Why do these brands have such loyal customers? Because they realize that loyalty is often determined by the strength of the relationship and the interactions throughout a customer's lifecycle that affect it. Rather than focusing on discrete programs, practices or initiatives, these brands create experiences that allow them to build deeper, more emotional, more meaningful and sustainable bonds between the customer and their brands.

    They realize that engagement is the journey … and loyalty is the destination.

     

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