As we dive into our blogging series on customer experience research, it’s important to begin by distinguishing between two ways the customer experience can be gauged - customer satisfaction and customer loyalty. While closely aligned, they are in fact quite different. And from a marketing research perspective, they are addressed in totally different manners.
As the name implies, customer satisfaction is essentially a representation of how satisfied, or how happy your customer is with your product or service. Customer satisfaction is the opinion of the customer, and as such, is always reported in some way by the customers themselves. Customer satisfaction deals with feelings, perceptions. At a very basic level, it answers questions like:
- How much do you like this product?
- How well do you feel it meets your needs?
- What features do you think perform best? Worst? Which would you like to see added?
- How do you feel you were treated?
Customer satisfaction studies also often ask questions relating to likelihood of recommending to a family member or friend and to future purchase intent. These final questions belong more in the realm of customer loyalty.
Customer loyalty is the metric by which the likelihood of future purchase is measured. Qualitative in nature, it is the forecast of future behavior based on past and current behavior. It measures, analyzes, and predicts based on:
- Past purchase history, including upswings or slowdowns
- Likelihood of repurchase and/or additional purchases
- Likelihood of recommending
- Likelihood of switching brands
A loyal customer is one that makes repeat purchases of the same brand rather than switching to a competitor. A loyal customer will be more likely to purchase additional products from that same brand as well.
Satisfaction ≠ Loyalty
There are certainly arguments about whether a satisfied customer is a loyal customer; just because they’re happy with their current brand doesn’t mean they won’t switch if a lower price is offered elsewhere. Conversely, a loyal customer isn’t necessarily always satisfied. I’ll throw out the common Apple example here; every Apple customer isn’t thrilled with every Apple purchase they’ve made, yet they keep coming back for more, often standing in all-day lines to be the first to purchase the next product release.
The conclusion, then, is that ideally companies want customers who are both satisfied and loyal. A happy customer is more likely to recommend. A satisfied customer is more likely to return. A return customer is more likely to purchase additional items. A customer purchasing additional items with which they’re satisfied is more likely to become brand-loyal.
So, while customer satisfaction doesn’t equal customer loyalty, it can certainly lead there.
Customer Satisfaction and Loyalty Research
Why then do we conduct research on customer satisfaction and loyalty? And which research is the right one? That, of course, depends on the questions a company is looking to answer.
Questions about overall experience, product/service features, and customer service/support interactions are well answered through customer satisfaction research. Those inquiries dealing with purchase, repurchase, and recommendation belong to customer loyalty studies. Through research large and small, using a variety of methodologies, all of these questions can be answered, providing the necessary knowledge to make a variety of business decisions.
Interested in Learning More?
Over the next few months, we will be diving deeper into the different types of research studies that test customer satisfaction, measure customer loyalty, and, ultimately, provide insight into improving the customer experience. Subscribe to our blog to see how customer experience research can benefit you and your business. Or contact us to talk one-on-one with a researcher who specializes in your industry and research needs.