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Why a “Satisfied” Customer is Unacceptable

I came across an article recently by Jeffrey Gitomer that really hit home. In essence, he said that there are countless awards given out for levels of “customer satisfaction” by many companies including the likes of JD Powers, and Consumer Reports. The winners of those awards publicize their victories in their marketing to attract new customers and give themselves pats on the back. In his opinion, however, all of those awards for “customer satisfaction” levels are meaningless. In fact, he said that not only are they meaningless, they are worthless.

 

His view is that customer satisfaction is synonymous with “mediocre” and “anyone that posts a ‘satisfaction’ award has an army of people that hate them for the lousy service they provide, AND a bigger army of people laughing at the audacity and the phoniness of the [award]”.

 

Gitomer explains why, “Satisfaction is the LOWEST level of customer service. And, in the end, means nothing.”

 

If customer satisfaction is meaningless, what should we be looking at?

 

“Customer loyalty is all that matters,” writes Gitomer.

 

A satisfied customer is simply one who believes that the service you’ve provided is acceptable to them. What it does NOT mean is that they would continue to do business with you, recommend your business to their family and friends, or proactively become a brand evangelist for you. A satisfied customer could be one that does business with you because your business is convenient for them. They are happy enough that the inconvenience of going somewhere else outweighs the convenience of staying. That’s not something to be proud of.

 

What we really should be measuring is customer loyalty. Gitomer defines a loyal customer as; “people who will do business with you again, tell others about you, and refer others to do business with you.”

 

Your customer loyalty levels have much more meaning than any customer satisfaction statistic or award. CEOs of many of the largest companies in the world started with mission statements not based on growth and market share, but on winning loyal customers. Gitomer poses the example of Hugh McColl, former Chairman and CEO of Bank of America. McColl was a driving force behind consolidating a series of progressively larger, mostly Southern banks, thrifts and financial institutions into a super-regional banking force. Gitomer stated: “His philosophy was simple: ‘I take care of my people, my people take care of my customers, my customers take care of my shareholders.’"

Up until recently most companies have been all about measuring customer satisfaction to judge performance through surveys and various other statistics. How do you measure customer loyalty? It’s simple. Start counting repeat and referred customers, sales and profit.  And according to Gitomer; “The rest is bogus.”

 

Customer loyalty is a circular chain that starts at the organizational level. I’ve written many articles about the importance of customer loyalty, and my company’s purpose is to help businesses retain and create loyal customers, which is why this article really hit home with me. Everything we do at Performance Loyalty Group, including our loyalty program and pre-paid maintenance program, is designed with this exact purpose in mind.

 

The next time you’re evaluating your company’s performance in relation to “customer satisfaction,” instead of asking, “How did we do?” start asking “Would you give me a testimonial?”  Or “Would you refer someone to us?” The customer’s willingness to do (or not do) either one of those things will tell you more about how well you’re doing than any trophy ever could.

Views: 521

Tags: Gitomer, JD, Jeffrey, Powers, automotive, customer, employees, loyalty, satisfaction

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Comment by Mike Gorun on August 22, 2013 at 5:52am

Thanks for the comments everyone!

Comment by Big Tom LaPointe on August 21, 2013 at 2:30pm

great post. BofA is, indeed, committed to employees, and works to translate it to the customer experience. I agree with the customer LOYALTY mentality. I will point out that with the fickle buyers in today's market (unlike the Cadillac / Buick / Mercury buyers of a bygone era), LOYALTY isn't necessarily your customer making a purchase, but merely GIVING YOU A CHANCE to sell them a car.

Comment by Cherie Price on August 7, 2013 at 4:18pm

Sorry Brian Bennington about spelling your name "Bryan".  MY BAD........that's the name of our service manager.....and an EX!

Comment by Cherie Price on August 7, 2013 at 4:16pm

Thanks, Mike and Bryan.

Bryan, I cut (all to hell!), copied and pasted portions of your post and sent them to my dealer.  Now...if I can get him to read it!  He doesn't like (or read) unsolicited email either.....not even from an employee!  Good job though.......thanks

Comment by David Ruggles on August 7, 2013 at 7:28am

I wonder how our industry will EVER do right by consumers as long as we turn over sales staff 3 - 4 times each year?  That issue is the elephant in the room so many try to ignore.  We cannot maximize repeat business and/or CSI without being able to maintain a static professional staff.  All the nifty processes and CRM technology in the world can't make up for that.

Comment by Mike Gorun on August 7, 2013 at 4:03am

Thanks to all of you for the great feedback and compliments!

Comment by Tom Gorham on August 6, 2013 at 6:43pm

Brian, I really liked your statement that, "Working with reps all of the time now, it seems that acting, drama and humor isn't practiced as much.  Too bad, too, as that's real selling and not "order-taking."  Thank you for a quotable! 

Comment by Tom Gorham on August 6, 2013 at 5:52pm

Mike, you're a man after my own heart.  What would you like to hear...? "Got in, got out in a timely manner and the price was right.  Very satisfied."

Or... "What a wonderful experience I had.  Never thought I would say that about a car dealer.  But everyone was so helpful and friendly, I felt like they were old friends or family and they sincerely wanted to help me.  They made it easy and went the extra mile to get me exactly what I wanted at a price I could afford.  I will tell everyone, this is the place to buy a car!"

Satisfied is never good enough.  If dealers and their employees look at customers as friends and family and treat them that way, they will win, not satisfied customers, but advocates and lifetime friends and family.  That's Loyalty 101.

Comment by Anne Fleming on August 6, 2013 at 4:16pm

Fabulous article, Mike - and, spot on, in the long run. At Women-Drivers.com we do in fact measure "satisfaction" via WSI or Women's Satisfaction Index. While I concur the financial measuring stick is customer loyalty (over the long run/repetitive business), the WSI measured at our site is a snap shot of women's experiences at dealership (one visit at a time).

It takes extraordinary effort and intentionality for a dealership to pay attention to $38 million dollars worth of customers (the average single dealership's sales volume)! Have metrics to follow loyalists visits AND drop offs one-customer-at-a-time. Step outside your business and be a student of  the social, cultural, digital and industry trends that can be implemented to grow your business.

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