Your Customer Is Satisfied – Are They a Coupon Away from Leaving?

You’ve likely heard someone say, “Customer satisfaction is not enough.” While that might initially sound counterintuitive, considerable research supports the statement.

The Fallacy of Satisfaction

Invariably, you’ve stayed at a hotel that met all your basic needs. The room was clean, the price was reasonable, and the overall experience was fine. In essence, you were satisfied, but that satisfaction left you with no desire to return. Given your experience, a rival hotel might lure you away with a discount offer.

Let’s shift the example slightly to assume you stop in a local café where the food and beverages are satisfying, and the service staff goes out of their way to offer personalized care. Let’s further assume a new café opens across the street. Given the service experience you’ve received at the established café, you will likely be hesitant to try the new location.

Takeaway: When customers say your experience was “fine” or they are merely “satisfied, you are a coupon away from having them leave you.

The Evolution of Customer Engagement

Customer satisfaction is the minimum viable standard for a business. If your business can’t consistently satisfy customers, your competitors will – and you will be looking for another way to make a living.

Assuming you consistently achieve customer satisfaction, you are positioned to deliver higher levels of customer engagement, as measured by:

  1. Repurchase Intent: I encourage my clients to not only ask customers how satisfied they are with products, services, and experiences but also how likely they are to come back and purchase more. Repurchase intent reflects emotional and financial engagement with a brand – while satisfaction measures a company’s ability to meet basic customer expectations.
  2. Actual Repurchase Behavior: It’s one thing to intend to repurchase, but does that intention translate into actual future sales? To the greatest degree possible, I work with clients to see if “intention to repurchase” does result in repurchases. I also help them activate customers with repurchase intent – so that intention converts to repeat sales.
  3. Pride in Brand Relationship: When customers are emotionally engaged with a brand, they feel positive about their choice. They are pleased and even proud to be associated with a particular company. When measuring relationship strength, it’s helpful to assess the degree to which customers feel they’ve made a wise choice by selecting your business.
  4. Likelihood to Recommend: Many companies assess this dimension using a measure my friend Fred Reichheld developed. That metric, the Net Promoter Score™ (NPS), explicitly asks customers to rate how likely they are to recommend a business to family or associates using a 0-10 scale, with 0 being not at all and 10 being extremely. NPS is a powerful tool for measuring future purchase behavior but doesn’t predict whether people will make a referral.
  5. Actual Recommendations: Since NPS is a proxy for repurchase but not referrals. I suggest measuring actual referrals. You can set KPIs associated with referral-initiated traffic by asking customers how they became aware of your brand.

Why Customer Engagement Should Matter to You

As far back as 2016, research in the Harvard Business Review found that emotionally engaged customers are three times more likely to recommend a product or service, three times more likely to repurchase, less likely to shop around, and much less price sensitive.

Given the importance of emotional engagement, I encourage clients to use the Gallup CE-11 to capture many of the engagement elements listed above. While Gallup later streamlined the CE-11 to focus on three elements (CE-3), the CE-11 offers important insights.

Here are the questions from the CE-11 republished from my book, The New Gold Standard. Given that my book was about the Ritz-Carlton Hotel Company, the CE-11 questions are framed in the context of Ritz-Carlton Hotel guest engagement.

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I hope you will consider using some, if not all, of the CE-11 questions as part of the customer engagement journey. By doing so and taking action on what you learn, you won’t be a coupon away from losing your customers.

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Joseph A. Michelli, Ph.D. is a professional speaker and chief experience officer at The Michelli Experience. A New York Times #1 bestselling author, Dr. Michelli and his team consult with some of the world’s best customer experience companies.

Follow on Twitter: @josephmichelli

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