Customer Experience Featured Article

Earning Customer Loyalty Starts with Defining It

January 07, 2015

What’s the optimum outcome of the customer experience? Is it revenue? Is it first-call resolution? Customer advocacy? Different companies might have different answers, but for forward-thinking companies, the end result of a successful customer experience should be customer loyalty.

Customer loyalty is harder to win today than it was in the past. Customers have more choices, can more easily switch providers and are more fickle. Once, it took some effort on the part of a company to drive a customer away. Today, all it takes is keeping a customer on hold for more than five minutes to make him or her disappear forever. Luckily, there is technology that can assist companies in keeping and holding customer loyalty by improving the customer experience. They are doing this by using data and metrics in smarter ways.

In two separate studies last year, Loyalty360 surveyed more than 450 professionals, representing companies of various sizes in a broad spectrum of industries. The goal was to uncover the inextricable links between the customer experience and customer loyalty. Twenty-six percent of companies surveyed said the most important outcome of the customer experience was customer loyalty (making it the third most popular choice. Thirty-eight percent chose “positively impacting customer emotions or perceptions,” and 37 percent identified customer satisfaction as the most important outcome.

Many companies are on the right track, but they’re stuck when it comes to how they arrive there. Technology can help, but it can’t be the only means, according to Loyalty360.

“Many companies become frustrated when they try to tap into the promise of technology and customer data to build customer loyalty,” blogged Loyalty360’s Emily Heitkamp. “And the customer renaissance is causing most brands to struggle with the challenges, not just the laggards. Metrics and benchmarks are the biggest knowledge gaps for customer experience and loyalty.”

In many cases, wrote Heitkamp, knowing the customer is the key to achieving customer loyalty. Customers, of course, are not all created the same, and different things will earn their loyalty. From an operations standpoint, there are some major roadblocks to earning customer loyalty, and these include failing to hold front-line employees accountable for customer relationships, failing to differentiate properly from the competition and not tracking the right metrics to improve.

According to Heitkamp, the Loyalty360 studies revealed that those companies that excel at customer experience and loyalty are starting to define both in a more complex and inclusive way.

“Customer experience no longer focuses on a single customer interaction and its outcome,” she wrote. “Building customer loyalty is not as simple as offering a program. A program may be one component of the loyalty strategy, but that strategy also includes customer experience and customer engagement, which are far-reaching and complex disciplines.”

In other words, the more narrowly you define customer loyalty, the more narrow your results are likely to be. 

Edited by Alisen Downey

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