Magazine article ABA Bank Marketing

The Difference between 'Satisfaction' and 'Loyalty'

Magazine article ABA Bank Marketing

The Difference between 'Satisfaction' and 'Loyalty'

Article excerpt

According to a recent study by Business Week magazine, 96 percent of bank customers will simply leave the bank without telling anyone. It is our silent killer. However, the surprise for many will be that 80 percent of those who left silently self-reported themselves as "satisfied" just prior to leaving. Here lies our major challenge and opportunity.

How do we discern a "satisfied customer" from a "loyal customer" and what is the impact on our attrition and therefore our bank?

According to a 2006 Maritz Market Research poll, most customers leave because of a poor experience with a staff member. Hmm. So the problems likely start with and end with "us." We need to identify our issues and subsequently our customers' issues.

Allegiance, a Utah-based loyalty firm, insists that an enterprisewide method of capturing customer feedback and then managing that customer feedback is the key to determining and assessing the difference between "satisfaction" and "loyalty." Let's step back for a moment and clarify satisfaction and loyalty. The best way I can relate satisfaction is "simply meeting expectations." For a bank, it is "Yes, I receive a statement; yes, the staff" seems friendly; and yes, my transaction was handled without error." Satisfaction is meeting our customers' need. Loyalty is the emotional bond that a customer has with you. Think of your Starbucks' cup and the feeling you have when you get that perfectly crafted--meeting my exact specification--cup of coffee. I can smell it right now!

For loyalty to be developed, we need to "engage" our customers and not simply interact with them. So what is engagement?

Allegiance considers engagement "the emotional bond or attachment that a customer develops during the repeated and ongoing interactions that they have as a satisfied and loyal customer. …

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