More than 40 years ago, Mick Jagger and Keith Richards wrote I Can’t Get No Satisfaction. Although the song was meant to be anti commercialism and anti status quo, the lyrics (ignoring the double negative) have deeper meaning for marketers. They look for good overall customer satisfaction ratings and assume that they can drive loyalty behavior with ever-higher satisfaction scores. Peter Drucker has been quoted as saying, for example: “To satisfy the customer is the mission and purpose of every business.”
Yet, although it’s been well proven that transactional and longer-term experience dissatisfaction can lead to customer risk and defection, trying to optimize customer satisfaction does not necessarily keep customers loyal. Is satisfaction really the right goal—one that, if achieved, will drive behavior?
The answer, for all intents and purposes, is a qualified “no.”, or at least “not enough for strategic customer relationship purposes”. There is proof galore to support this assertion. For instance, we asked active current customers of a B2B company, those making 10 or more purchases a year, to give service quality and product quality ratings on a five-point scale of satisfaction. We also asked the same questions of formerly active frequent buyers who hadn’t purchased anything from this company in the past year. Their scores were almost identical. Consider these findings.
|Excellent Quality Satisfaction Ratings
(5 on a five-point scale of satisfaction)
|Overall quality of service||Overall quality of products|
(10-15+ purchases in past year
(Formerly active, not past year)
The client involved in the study would have gotten little or no direction from this data if satisfaction were the principal basis for success or failure. This is very much related to customer life cycle. Customers who had discontinued purchasing—or were at risk of defecting—were as satisfied with the client’s products and services as those still buying. So there must have been other drivers for risk and defection behavior. Commitment and advocacy analysis were the keys to identifying them.
We believe that the actionable “code” for understanding committed customer behavior at any life stage is quite straightforward. It consists of defining the emotional and rational bonds that make up a supplier’s value proposition. The emotional bonding elements are based on trust, a customer’s sense of personal assurance in purchasing and getting benefit from using a company’s products or support. Service experiences, for instance, play a big part here. Rational, or tangible, elements are those things that we associate with cost and functionality: original price, cost to maintain, accuracy, completeness, reliability and the like. For us, rational performance is satisfaction.
A terrific example of melding the emotional with the rational is Wegman’s Food Markets. As CEO Danny Wegman explains, the philosophy is that his stores deliver a “nearly telepathic level of customer service.” No self-service checkout here, for instance. Wegmans stores may run up to 28 lanes of registers at a time. The stores carry 60,000 different items, more than 40 percent above the supermarket industry average. While some major grocery chains are exiting markets, Wegman’s continues to grow at a rapid pace. Operating earnings come in at 7.5 percent, compared with the industry average of 5 percent. As a company that has spent multiple years in the Top 10 of Fortune Magazine’s 100 Best Companies to Work for in America, Wegman has employees that are both loyal and customer focused. Clearly, the organization’s leaders understand what it takes to drive customer commitment in their industry.
The conceptual framework of our commitment behavior model is that these emotional and rational bonds are the foundation of customer bonding. Customer relationships with suppliers have a great deal in common with human relationships. So the model can help identify the relative impact of each relationship driver: corporate image and equity; policies and procedures regarding customer transactions; service delivery levels and breadth of coverage; and product performance (quality-based elements such as accuracy, reliability, completeness and timeliness) and costs, both actual and relative to competition. The sum of these components comes back to trust and satisfaction conditions, leading to commitment on a rational and emotional basis.
Commitment, in short, monetizes. In other words, in virtually every industry—and in virtually every geographic location—level of commitment correlates with key metrics such as purchase intent, visit frequency, brand preference and, as seen in the example below, actual share of wallet.
These supermarket customer results show that the shoppers with high commitment spend almost five times more per month than those with low commitment.
Advocacy, which we define as the active expression of commitment, is seen in such attitudes and actions as a narrowed consideration set and strong brand favorability but most particularly in positive, frequent and voluntary informal communication on behalf of the preferred supplier. Active commitment—advocacy behavior—is at the crossroads of where word of mouth is trending. Similar to commitment, level of advocacy also monetizes, with true advocates giving significantly higher spend share to their preferred brand, compared to those customers who are disaffected or outright negative.
So if satisfaction doesn’t satisfy, and the name of the game is understanding and leveraging customer behavior that monetizes, is there one “best” question or one best approach? As some companies—those trying to make sense of a controversial and highly-promoted single-customer-question research approach—are beginning to discover in their results, recommendation doesn’t neatly translate into real marketplace behavior.
We want and need the most reliable tools and techniques for identifying and measuring how customers behave.
Here’s my recommendation: Use them all. Satisfaction, especially dissatisfaction, will help identify where a company’s transactional processes and touch-points are putting customers at risk, and there’s significant value in knowing that and being able to take action. Commitment will help determine what emotional and rational components of value drive customer behavior. Advocacy will bring in the influence of neural, peer-to-peer communication. Taken together, they provide a detailed, user-friendly paint-by-numbers landscape picture of why new, active and at-risk customers do what they do.
Hey, hey, hey. That’s what I say.