Which would you rather have: A loyal customer or a satisfied customer?
You might feel that they’re so similar, the choice between them wouldn’t be important. Ideally, a loyal customer is also a satisfied customer, but it doesn’t work the other way around. Just because a customer is satisfied does not mean they are or will ever become loyal.
There are many differences between customer loyalty vs customer satisfaction, and understanding those differences is important. One holds many benefits for your business; the other is really a bare minimum for staying in business.
We’ll take a look at customer loyalty vs customer satisfaction below.
Customer Loyalty vs Customer Satisfaction
Customer loyalty vs customer satisfaction are pretty simple to tell apart once you understand the definition for each.
Customer loyalty – What is it?
Customer loyalty is a customer’s general preference for continually doing business with a specific business establishment. Customer loyalty refers to the relationship or connection between a (usually) satisfied customer and the establishment they prefer to patronize. Customer loyalty can come in many forms, and surprisingly, a customer need not visit a business frequently to be considered loyal. A woman who visits the same hair salon every time she’s back in her hometown can be a loyal customer, even if it’s just once annually.
Customer loyalty usually turns customers into “brand ambassadors.” Customers enjoy a company’s service or product so much that they’ll go out of their way to promote and recommend it to others, pay a premium price, or find that specific brand.
Customer satisfaction – What is it?
Customer satisfaction, on the other hand, simply refers to a buyer’s level of satisfaction with their most recent purchase or interaction with your business. A satisfied customer can be thrilled with the service they received and still visit a competitor’s store a week later. Being satisfied does not create loyalty.
Customer satisfaction is, however, a necessary step in building customer loyalty. A customer hardly has reason to become loyal to a business if they aren’t consistently satisfied with the service or products. So in order for a customer to become loyal, they must first be satisfied with the level of service and quality of product they’re receiving.
Are loyal customers always satisfied?
One reason the customer loyalty vs customer satisfaction distinction is difficult to make is due to the nature of customer loyalty itself. A customer’s loyalty does not necessarily indicate what their level of satisfaction is. Some loyal customers would find it a hassle to move to a competitor; some don’t want to abandon low pricing; others simply stick it out with a company after negative changes are made because they feel an obligation to the company after years of patronage.
Satisfied customers are not always loyal. Loyal customers are not always satisfied, but as a general rule, loyal customers are quite satisfied with the businesses they frequent and make a point to support.
Telling the difference between customer loyalty vs customer satisfaction
Customer loyalty can be seen in purchase frequency, the length of time between purchases, website purchase analytics, feedback and reviews, communication with customers, and more. You’ll know who your loyal customers are because they’ll keep coming back, even if it’s not very frequently (depending on your industry).
Customer satisfaction can be measured with feedback, surveys, product return information, reviews, and website purchase analytics. If you have high customer satisfaction, you’ll see positive reviews, low numbers of returns, and plenty of purchases on your website by new visitors. What you won’t see, however, is the return of these customers to purchase from you again and again.