Customer Satisfaction Vs. Customer Loyalty: What’s The Difference?

by
Eran
August 17, 2020
3 min read

Small business owners wonder about customer loyalty and customer satisfaction. While one refers to the level of satisfaction your customers experience while choosing your products or services, the other is a long-term goal you should pursue. Understanding the difference between the two can impact your business growth, no less. 

Clarifying The Term “Customer Satisfaction?

Customer satisfaction measures how clients value your offering at the moment. 

You can have some idea of your customer’s satisfaction by providing a survey to clients after they make a purchase. Such surveys assess how a business serves its customers and whether they enjoy the products as well as the utility gained from chosen products.

You can measure customer satisfaction by using surveys presented to customers at the end of a purchase. Companies can issue surveys in online stores and also in physical stores. The purpose of giving the survey during checkout is to assess how customers perceive their shopping experience. 

Notably, the surveys aim at reducing the chances of shoppers taking their bad experiences to social media to vent. The anonymity of feedback presents an opportunity for individuals to share their experiences. 

Customer Satisfaction Score (CSAT) measures the level of customer satisfaction by using a 10-point scale to rank overall utility. A low score on CSAT means that you are losing customers because of the dissatisfaction of service or products. Conversely, a positive CSAT score means that you are attracting customers. Positive CSAT scores improve customer loyalty in the long-run. 

customer satisfaction
Image credit: qualtrics.com

So, What Is Customer Loyalty?

Customer loyalty checks the level of the likelihood for customers to do business with you again. Loyal customers visit your business more than once because of the value of your goods and the overall experience that you provide.

Businesses reap vast benefits of having loyal customers. The service that you offer affects the willingness of customers to visit your store. People don’t like going to places where they aren’t appreciated.

Excellent service attracts more customers since they feel satisfied whenever they shop at your store. Small business owners who realize this center their efforts around attracting people and not promoting their products.

How to Measure Loyalty?

You can measure customer loyalty by using different tools as a business owner. Variety makes it easy for you to employ the measure that seems best.

Engagement index analyzes the level of connection that customers have with your brand. Clients engage with your company through calls, emails, and internet clicks. You can even determine the time of the year when customers love to interact with your business.

The number of visits that customers pay to your business also shows the level of loyalty. An increase in visit frequency shows that customers love interacting with your brand. A decrease indicates that the company is failing in terms of customer retention.

You can use figures to measure your customers’ loyalty by using tools such as share of wallet, sales per customer, and customer lifetime value. These statistics help you judge how loyal your customers are.

Net Promoter Score

Net Promoter Score assesses the likelihood of customers to promote company products to other individuals. Loyal customers easily recommend your brand to their family members and friends.

loyalty program
Image credit: medallia.com

The score measures customer loyalty through a survey usually provided a few days after the transaction. Customer loyalty focuses on the future of the business and not the present. Management of the business becomes more natural when using the tool since the values generated translate to company revenue.

Moving from Satisfaction to Loyalty

Moving from customer satisfaction to customer loyalty requires continuous time and effort. Your business has to learn to engage with clients at a deeper level. Notably, the type of incentive you choose and the language and nature of engagement with your customers, within the business or online, affect the loyalty level and the likelihood of turning a customer into regular.

Conclusion

Overall, both customer satisfaction and customer loyalty are essential to any business. Small business owners have to learn how to promote both concepts. Satisfaction focuses on present experiences, while devotion focuses on the long-term value of a company.

Balancing both concepts in your business promotes revenue growth as well as the value of your brand. Employees have to learn how to engage with customers better than the products themselves.

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