Customer satisfaction: we measure it; we strive to improve it; we may even be compensated in part based on it. But what exactly is customer satisfaction and is it the right rabbit for us to be chasing?

Consider this: customer satisfaction can be defined as the perception in the mind of your customers that your company is doing a reasonably good job of meeting their needs in terms of your product, service and support offerings. While this is a definitely a good starting point, it does not really answer the critical question that we need to be asking - "How likely are you to buy more widgets from me and/or how likely are you to recommend my widgets to your friends and colleagues?" This measurement - Customer Loyalty - is the thing we should be focusing on, as it is generally a far more likely predictor of future revenue than Customer Satisfaction.

Sure it's great to have satisfied customers. No customer will buy more from you or recommend your offerings if she is dissatisfied - that is a given. However if our goal is to grow revenues, market share and customer base we need to be able to predict the likelihood of our current customers spending more with us and spreading the good word about our offerings to other new prospects. If we agree that our goal is to stimulate action, not merely create contentment we need to adjust the way we talk to our customers.

Have you ever driven past one of those benches with a billboard on it that reads "You just proved that bench advertising works"? In fact you have not proven anything of the kind. You have only proven that you can read. If the goal of the ad is to stimulate action not merely put some words within your field of vision it has failed. Conversely, if the ad had read "Call 555-1234 right now for a very special offer that could change your life" and when you call the number the recording said "You have just proved that bench advertising works" that would be valid. The ad called you to action and you took the recommended action. Now we're talking success. It may also be worthwhile to note that the only reason that this "house ad" is appearing on the bench you are driving past is that the advertising company could not sell that space to a real customer so they are using it for their own ad.

So, how do we measure customer loyalty? Quite simply you will not get what you do not ask for. In your customer interviews or surveys don't be afraid to include direct questions like these:
• Considering your use of our product and the service you have received from our company how likely would you say are you to buy more of our widgets as opposed to our competitors' widgets?
• Considering your use of our product and the service you have received from our company how likely would you say are you to recommend our widgets to your friends and colleagues?

Of course these are not ideal questions to be asked verbatim. I just want to stress that what we should be looking for is an aid in predicting future purchasing and purchase influencing. It's great to know how warm and fuzzy our customers feel about us but what we really need to get to is an understanding of what we can do to drive customer action.

With all of this in mind I would love to hear some of your ideas about what we can do to measure, understand and improve customer loyalty. Got anything to share on this?...