Customer loyalty and customer satisfaction are important measures for B2B organisations.
Individually they are important. Together they are powerful. If you have one without the other you potentially face a vulnerable business situation. Customer satisfaction without loyalty is okay but won't drive long-term growth. Customer loyalty combined with low levels of satisfaction will gradually erode your customer's confidence.
What is the difference?
Customer satisfaction is a short-term measure. It is backward looking and is dependent on how customers feel about their most recent experiences with your company.
Customer loyalty is forward looking and a better indicator of future behaviour. It is slow to grow and slow to decline. Loyalty is a better measure to predict future buying behaviour and promote strong sustainable customer relationships.
Satisfaction, confidence and willingness to recommend have a strong correlation. To build loyalty, you need to understand the drivers for your customers and how they perceive you are performing against these drivers.
At Bsquared, we have helped many companies measure and improve their customer loyalty and also their customer satisfaction. Sometimes independently, sometimes together. We have seen many examples of organisations measuring the wrong thing, reaching the wrong conclusions and not achieving their full potential.
You are vulnerable if you are satisfying your customers today but are not winning their loyalty. You need to understand how to behave in the future to help your customers achieve their objectives. Building relationships with your customers' key decision makers and influencers will help you to recognise future needs. Providing the appropriate products and services will reduce the risk of your customers choosing a competitor. Identify the value drivers and focus on building these.
You are in a more secure position if your customers like what you do and are willing to remain with you despite issues causing low satisfaction. Focus here should be on improving business operations and identifying the root causes of customer issues and problems.
Star performers – congratulations! However beware the dangers of becoming complacent. Through continuing to engage your customers you will create advocates for your business and protect yourself from future competitive threats.
In the B2B world where a handful of customers may account for the majority of your sales, satisfaction with not just each transaction, but with each contact within a company is crucial. Good customer engagement will give you a fuller picture. Know your customers' pain points and their future needs and aim to drive loyalty at all levels throughout their organisation.