Re: Loyalty and Customer Satisfaction

Posted by Pierre Wanger on February 17, 2000 at 06:03:14:

In Reply to: Re: Loyalty and Customer Satisfaction posted by Serge Therrien on January 13, 2000 at 14:35:42:

Hello everybody,

First of all, let me agree with Serge that "satisfaction" will probably not be enough to keep your customers. You have areas were all competitors have their customers choose atleast 8 on a 10-point scale, but in the long-run you know only those that score 10 on most items will survive in the marketplace.

Second of all let me point out that satisfaction is just one part of what builds loyalty, in terms of re-purchase behaviour or in terms of the willingness to buy services at a premium. You could be very dissatisfied with your present provider of a service and still consider the alternatives to be even worse - so ofcourse we are talking of relative value.

The really strange part of the story is that even when people do percept rational reasons for a change - they do not make the change happen. Thus, you would have to measure things such as a willingness to try out new things, a fear of the unknown, the perceived complexity in finding out about the alternative offers and so on. Also you can have practical barriers in terms of having to pay money to transfer your account from, say, one bank to another and such a transfer will also take time. In some markets your friends would expect you to make regular changes in your buying habits (i.e. in the PC/software market) and that might make you more likely to invest time and effort to try out something new.

At Research International we term all forces in a category –market perceptions, psychological customer profile and actual functional barriers– "inertia". This is actually a forgotten factor in a lot of market research that might explain why individual’s do not always act according to relative value.

Pierre Wanger, RI Sweden

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