The link between customer satisfaction and customer loyalty
Is satisfaction = loyalty? One of the biggest goals of modern business and many companies: Satisfied customers. But what happens when companies focus in particular on the goal of customer loyalty in their long-term development? In the long term, does customer satisfaction really equal customer retention or loyalty?
Customer satisfaction positively correlated with customer loyalty
A study by Total Quality Management magazine took a close look at this topic across a wide range of industries and produced some interesting results. Although customer satisfaction naturally plays a key role in the topic of loyalty, this does not mean that satisfied customers are necessarily loyal customers.
While the study clearly shows that customer satisfaction has a positive effect on loyalty, which is not surprising, there are also cases where customer satisfaction has only a moderate influence on loyalty. To develop an understanding of the concepts of customer satisfaction and loyalty, it is first necessary to clarify which factors can influence satisfaction.
This study refers to data based on the ECSI model from 1998, which summarizes and evaluates the most important factors for customer satisfaction.
The factors mentioned for customer satisfaction are
Image
Expectations
Quality of the product
Quality of service and
Perceived general value
Subsequently, these factors influence loyalty indirectly through satisfaction.
However, according to the ECSI model, image and the quality of customer interaction also have a direct impact on loyalty.
Practical cases
Therefore, in some practical cases, the phenomenon arises that loyalty lags behind despite sufficient customer satisfaction or, conversely, that there is very high loyalty but low customer satisfaction. It is therefore not possible to draw conclusions about loyalty based on the level of satisfaction.
Specific examples can be found in the analysis of companies such as McDonald's or Coca-Cola, which invest a lot of resources in branding and image, but have no corresponding loyalty or satisfaction. On the other hand, supermarket chains such as Netto, for example, which have made price their main focus, have recorded a higher level of loyalty than their customer satisfaction would suggest.
Although these cases could be a coincidence, they nevertheless prove that different individual strategies can lead to success and therefore also to loyalty. An example of this is Apple, which has an extremely successful branding strategy and can achieve extremely high levels of customer loyalty despite being one of the most expensive brands on the market. This is proof that customer satisfaction alone cannot be a driver of loyalty and therefore a more comprehensive strategy is required.
Have you found yours yet?
Author: Michael Pfeiffer, (former) student at the University of Applied Sciences Upper Austria, Global Sales and Marketing in Steyr
