There are a number of well known and popular ways that companies try to measure their overall customer satisfaction and loyalty. Traditional, overall satisfaction questions are still widely in use and provide a good idea of overall customer sentiment. Other loyalty metrics address customer behaviors such as the likelihood of customers to recommend a company or product to a friend or colleague.
While traditional satisfaction and loyalty scoring methods are great, they’re typically only a stepping stone on the way to engagement. The reason is that many of these methods aren’t able to answer questions such as: Of those customers who are likely to recommend you; Are all of them equally likely to recommend?; Are some customers more effective at recruiting new customers than others?; Does each customer’s recommendation have the same impact? Etc., etc.
Each month, our company conducts a national benchmark survey called the Allegiance Pulse of America survey, which tracks the emotional loyalty or engagement of banking customers throughout the United States. In this survey, customer engagement is measured by several questions, covering overall satisfaction, likelihood to recommend, and other emotional and behavioral outcomes. In addition, Pulse of America asks customers how many friends or relatives they have told about favorable experiences with their bank, and of those they told, how many actually switched banks as a result.
What we found when we separated engaged customers (i.e. those who have an emotional bond with a business) from other customers in this survey is that the engaged customers were nearly 4 times as effective at recruiting new customers as other customers, which proves that all recommendations are not equal. After all, it makes sense that a dispassionate customer’s recommendation doesn’t have the same convincing power as a recommendation from a customer with an engaged, emotional bond.
My point is that it’s not enough to simply know your loyalty score: you have to actively track, measure and understand the feelings and behaviors of your customers and understand your organization’s unique drivers of engagement and loyalty in order to know who’s recommending you and why in order to capitalize on that behavior by obtaining more effective customer referrals. And that’s where technologies (such as those offered by Allegiance) can help pick up where other traditional methods of measuring customer loyalty and satisfaction leave off.