Sunday, March 06, 2011

The satisfaction/loyalty disconnect #cem

Irving Stackpole uses the example of considering a seniors' community to explore the different factors affecting loyalty and satisfaction. There is growing realization and acceptance that these two traditionally connected themes may be correlary but are still exclusive.

There is a frightening disconnect between measured satisfaction
and customer loyalty. For many years, senior living managers have
performed customer satisfaction surveys to measure how happy various
customers and consumers are with their communities. These surveys
have taken many forms, but the results have been remarkably similar
- customers and consumers seem quite satisfied, or happy. Another
fact, however, is that satisfied customers are not predictably loyal
- too often they walk away to another senior living community. Why?
And if happy customers walk away, why bother trying to find out
if they're happy in the first place?

Three theories may explain this situation:

  1. Customers of high vulnerability services (such as senior housing)
    don't tell the truth about their level of satisfaction;

  2. Satisfaction and loyalty are not correlated in the markets for
    these services;

  3. Service dissatisfaction is not the only reason for disloyalty.

There is good evidence that each of these provide at least part
of the explanation, and can be helpful in guiding what to measure
and how.

Regarding surveyed persons telling the truth, little can be done,
although there is some evidence that having an outside person, vendor
or agency perform the measurement is useful. Surveyors often must
work harder to obtain negative responses through one-on-one interviews,
for example. What is clear, however, is that the survey respondents
who provide negative responses are offering the surveyor precious
information. It is my experience that negative responses are too
frequently either dismissed with a roll of the eyes, or rationalized
away to the margins. It is human nature to take pride in, and therefore
be defensive about, our work, but this human quality does not serve
the management of senior living communities in this circumstance.

Model Value Map

The relative importance placed on features and price change with
time. Of importance to measure, therefore, on a regular basis, are
the relative satisfaction with, and the perceived value of, a communities'
services. How can we do this?

Shoppers for, and consumers of, high vulnerability services evaluate
these services in a highly comparative manner. Perceived satisfaction
alone does not predict buying behavior or loyalty. By asking shoppers
and customers to make comparisons of competitive positions in both
service areas and price, it is possible to create a far more useful
and predictive model.


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