Thursday, January 22, 2015

Customer Satisfaction vs Customer Loyalty - What's the difference?

In customer services, you’ll likely hear people talk about “customer satisfaction”, and sometimes you’ll hear about “customer loyalty”. It’s important to recognize that they are two sides of the same coin.

To be clear that:
“Satisfaction” is an attitude — it’s how I feel, and as such it’s distinctly subjective. I have an attitude that I’m satisfied, or I have a perception of myself as being satisfied.

In contrast, “loyalty” describes behavior. I may behave in loyal ways. When I become a regular, repeat customer and I recommend your product to my friends or family members, I’m behaving in a loyal way. If I’m really loyal, I’ll willingly pay a premium in order to purchase a product with your brand on it. That, again, is a loyalty behavior. It’s objective.

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Satisfaction without Loyalty

Sometimes you can be really satisfied with something, yet fail to behave in a loyal way.
Take my local bookstore. I love my local bookstore. It’s a smaller, regional chain with a lovely environment and a nice selection, and I like their staff picks for recommended reading.
There are many attributes of the local bookstore that I find to be quite satisfying — but am I loyal?
Not entirely. I also buy a lot of books on Amazon. For me, Amazon is convenient; I like the quick searching, and I enjoy reading the reviews. Too, Amazon offers a lot of one stop shopping options. I’m not that fond of going into stores generally, so I appreciate being able to order some books, some clothes and some games for the kids all in ten minutes.
So in this case, I’m quite satisfied with my local bookstore, but I’m not behaving in a very loyal way.

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Loyalty without Satisfaction

Let’s take a real-world example. I happen to like coffee, and I buy a lot of coffee at Starbucks. Therefore, I’m loyal to Starbucks.
However, if Starbucks were to send me a satisfaction survey, focusing on my attitudes, they’d find that I’m not particularly satisfied in two specific areas.
There are two problems here:
The first, I think the price of their iced coffee is entirely too high.
The second, I think the naming of their cup sizes is pretentious and, in fact, I refuse to use it. When I’m at Starbucks, I order a medium.
Clearly, then, when it comes to Starbucks, there’s a difference between my behavior and my attitude.

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"Customer Satisfaction" and "Customer Loyalty" are two difference definitions, but always remember that Customer Loyalty going beyond Satisfaction.
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