Improving Customer Service

Issue # 15 of 70 

John T. Self, Ph.D.
By: Dr. John T. Self

Going Beyond Customer Satisfaction

The conventional wisdom is that if you have satisfied customers you will have loyal customers.

Sounds right, but it's wrong.

It is like saying that when the sun is out the sky is clear. At first blush, both statements appear to make sense.

But when you take time to really examine the differences between satisfied and loyal, it becomes obvious that they are not alike at all.

For example, how many times have you gone to a store to buy a magazine. You find the expected magazine, pay for it and leave. You're satisfied. But are you necessarily loyal?

So what does it take to transform satisfied customers into loyal customers?

In my experience, loyalty usually develops when customers get involved with the company above the normal transaction. Strangely, this often takes the form of a problem that is solved in an extraordinary way and forces the customer to recognize the individual care. Others occur when employees form a relationship with the customer by providing individual service that elevates the transaction from impersonal to the personal.

The common denominator is that a relationship is formed. Whether caused by a problem or extraordinary service, loyalty occurs because of proactive employees and management, seldom because of day to day transactions, regardless of customer longevity.

What are the characteristics of satisfied and loyal customers?

Satisfied customers:

  • Will continue doing business until something better comes along, whether better location, better price or better variety.
  • No relationship formed.
  • No personal interaction.
  • Sees business as impersonal, only doing business with a company, not with a person.
Loyal customer:
  • Forgives and understands minor problems.
  • Not price sensitive.
  • Will help sell the business with word-of-mouth advertising.
  • Will not jump at the next "pretty face".

It is obvious which is the more desirable customer. The challenge is to be proactive in switching customers from satisfied to loyal customers. Having an extraordinary refund policy is a first step. Don't just "satisfy" your customers. Blow them away. Sure, it may be a little bit more expensive, but in the long run it will pay off in multiples and without the massive advertising expense required to lure back customers that you've had.

Remember it is much tougher to get customers back the
second time.

Do whatever is necessary (and more) to keep the faith. In fact, this is the perfect time to change them to loyal customers.

Be aggressive without being intrusive. Have the emphasis be on forming RELATIONSHIPS, not sales. Sales will follow relationships.

Review the company infrastructure:
Does it encourage sales people to develop relationships?
Does it have streamlined ordering, accessible accounting, sales and marketing departments, even on weekends or after hours? Do customer contact people have the ability to be flexible and autonomous to please their customers, even if it might gray a black and white policy?

Emphasize to all employees the benefits of customer loyalty over customer satisfaction.

The results of having loyal customers are worth any extra effort required that will raise your customer service levels. Keep in mind that you don't have to be sick to get better.

John T. Self is a lecturer at The Collins School of Hospitality Management at California State Polytechnic University (Cal Poly Pomona). Prior to entering academia, Dr. Self spent fifteen years in the restaurant industry. While in the corporate world, he worked for several chains including Chili's and Steak and Ale, and as vice president of a regional restaurant chain overseeing six restaurants with sales of over twenty million dollars. He has also owned three independent restaurants, including a comedy club.
Dr. Self has also been involved in the development of international hospitality programs. While at Golden Gate University, he started the partnership with Dalian University of Technology in Dalian, China and is continuing in that involvement at Cal Poly.

Improving Customer Service #15 of 70: View all in the Table of Contents

For more customer service articles, visit the Customer Service series on the new Sideroad: Practical Advice Straight from The Experts.

Text © Dr. John T. Self, 1997,1998. Part of the original Sideroad.