Customer Loyalty Isn’t Customer Satisfaction
Carnival Cruise Lines did a study several years ago indicating 80% of cruisers booked their second cruise with someone other than the travel professional with whom they booked their first. However, the clients must have been satisfied with the cruise experience, because they took a second cruise.
So how to explain this rather startling statistic?
Understanding the title to today’s article is the beginning of a strong customer retention program. Though we will spend a week working with the concept of customer loyalty, our study first necessitates grasping a very simple concept: Even a satisfied client will go elsewhere when an opportunity arises the client perceives as objectively better than the one you offer. A loyal client, however, will not.
The clients who booked their second cruise elsewhere were not necessarily unsatisfied, they simply were not loyal. The temptation, however, is to lay the blame for the lack of loyalty at the feet of the client. Many clients, some travel professionals will tell you, care about nothing except for price.
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It’s important to understand why this is a wrong understanding of the concept of client loyalty.
When I first moved to Tallahassee, I obtained a mailbox at a UPS Store near where I then lived. I moved three years ago and there is another UPS Store within a couple of blocks of my current office location. It would be a fairly simple transition to the new UPS Store and it would save me 15 to 20 miles of driving each week! But when I go to my current UPS Store, the owner, Joe, greets me by name, as does his assistant Isaac. They occasionally ask me about work, about the travel industry and the magazines I get in my box. They help me to my car with large boxes. Joe has some interesting insights and we often discuss the local economy and the ups and downs of owning and operating a business.
I’m not going to move my UPS Mailbox. I’m loyal to Joe’s operation. He has managed to form a relationship with his clients. Although he sells an absolute commodity that I can obtain “cheaper” in terms of convenience, I am loyal to him.
Customer loyalty is not about satisfaction, it’s not about price. Customer loyalty is about an emotional connection with a business. Moreover, loyalty is initiated by the business, not by the client.
Satisfied customers will be with your business until a better alternative shows up. It may be price, it may be simply a spur of the moment decision. A loyal customer, however, will stay with you, ask for your assistance, give you an opportunity to retain their business. Satisfied customers have no commitment to your business. Loyal customers feel the bonds and tug of a relationship. Satisfaction is objective – did you meet expectations.
Loyalty is emotional, subjective.
The loyal customer perceives you as an adviser in the travel planning exercise while the satisfied customer views you as one of the possible retail outlets from which they can obtain a cruise. Our job is to go way beyond satisfaction to loyalty. We will spend the rest of this week speaking to how to make that journey and take our clients with us.