Why Are Satisfied Customers Not Loyal?

by Natasha Ambavle | Fostering Loyalty, Loyal Customers

One of the most common problems brands face in 2021, is customer attrition. According to Deloitte, in global markets, the churn rate is as high as 30%. The reasons for a high customer attrition rate could be many, but the most common reason is lack of loyalty.

You may receive a high score on your NPS and CSAT systems, indicating that your customers are satisfied with your product and service but how many of these customers have remained loyal to your brand? There is a big difference between a satisfied customer and a loyal one.

In this article, we answer the pressing question ‘Why satisfied customers are not loyal?’ and share with you some insights on how you can foster loyalty.

Difference Between Customer Satisfaction and Loyalty  

Customer satisfaction is the degree to which the product or service is received by the customer. Depending on the expectation a customer may have from the brand, his satisfaction level may vary, which makes it rather subjective. For example, when you buy a product from a flea market, you do not have high expectations from the product. You buy it for a few cents or dollars and if the product does last for a year, you are completely satisfied with your purchase. On the other hand, when you buy a product from a well-known, reputed brand, your expectations are higher. This is why customer satisfaction cannot be used as a parameter for gauging a product’s caliber and neither does it guarantee customer retention.

Loyalty is a stronger emotion, it transcends satisfaction. A loyal customer attaches his emotions to the brand he is loyal to. These customers feel strongly about the brand and resonate with the brand’s ideologies and values. A study by Rare Consulting states that 83% of customers said their brand loyalty stemmed from trust. Trust plays an important role with loyal customers, so long as the brand upholds virtues like transparency and credibility, a loyal customer will stick with it and even forgo a few errors of judgment by the brand; but if the brand breaks the chain of trust, the attrition of loyal customers is unavoidable.

To learn more about loyalty, read our in-depth white paper

 

Why Aren’t Your Customers Loyal?  

Happy and satisfied customers are not necessarily loyal. They may, however, be a step closer to becoming loyal. Loyalty is a complex emotion that is not based on one-off instances. Satisfaction is temporary and non-exclusive. Your customers may be satisfied by more than one brand at the same time but it doesn’t mean they are loyal to either of these brands, let alone become repeat purchasers. Loyalty is influenced by many factors. It is a by-product of meaningful engagement, mutually beneficial brand-customer relationship and a bond that is more than just transactional in nature.

The driving factor in loyalty is the emotional connect. Customers attach themselves emotionally with brands that they find either aspirational, trustworthy, reliable, or add value to their lives in some way or the other. This is why brands across the world invest heavily in reaching out to their customers, creating a community for customers, humanizing brand interactions, offering transparency and developing a customer-centric approach. When you starting thinking like your customers and putting their needs before profits, it shows, and this is where true loyalty starts blooming.

 

Strategies to Foster Loyalty Among Satisfied Customers  

  • Consistently Work on Improving Customer Experience – True loyalty can be inculcated when you adopt a customer-centric approach. Keep customers at the heart of everything you do and consistently strive to improve customer experience. Such efforts and gestures do not go unnoticed by the customers and help to improve brand affinity and build trust.
  • Take Feedback Seriously – Perhaps the easiest way to show your customers that you care is by working on their feedback. Reviews, suggestions and feedback can give you great insights on your customers as well as on the effectiveness of your marketing and business approaches. Diligently working on customer feedback can improve customer satisfaction and will lay a strong foundation of trust.
  • Partner with Other Brands – Another way to improve customer experience is by partnering with other brands. It enables you to give your customers a better deal or offers and subsequently improve customer satisfaction levels. A partnership program will also help in driving sales, improve brand reach and visibility in the market.
  • Take Social Sentiment Into Account – Social media has bridged the gap between brands and their customers. It has also given a platform to the customer to connect with the brand and share his feedback. Take social listening seriously, read the pulse of the market and stay updated with recent events. It will help to gauge the sentiments of your customers. Listen and react appropriately to build a better rapport with your audience.
  • Take a Stand – Supporting a cause or initiative will not only improve brand credibility but also help you to attract and positively influence customers with shared values. It will put your brand in the spotlight and help to develop a responsible brand image. It will aid in creating a stronger connect with your audience and eventually boost customer loyalty.
  • Reward or Incentivize Their Loyalty – According to Access Development, 3 out of 5 customers don’t think brands they’re most loyal to are doing enough to reward them. Ali Cudby, author of ‘Keep Your Customers’, rightly explains that loyalty is much more of an emotional connection. A dynamic loyalty program will not only give your customers a motive to purchase from you but also help in developing a strong friendship with them. Rewarding your customers makes them more than just your customers it improves customer relationships that eventually transcends into strong customer loyalty. To know how you could leverage the perks of rewards and loyalty programs, click here.
  • Build a Community, Not a Customer Base – Like in every other relationship, communication plays a key role in customer engagement. Do not restrict engagement to onboarding and check-out processes, use the power of communication, to connect with your audience on an interpersonal level. Strive to build a community of people with shared values and interests. This will go a long way in strengthening the customer-brand equation and fostering loyalty.
 
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