'Good' Is Not Enough

Nearly three-quarters of a customer’s loyalty is determined by how that customer is treated. Research conducted by McKinsey and Company found the customer experience, the more likely they will be to return and directly refer you to others.

Here is the bizarre thing – most companies already intuitively know this!  Yet, they fall victim to a belief their bottom line will be sustained by consistently providing customers with merely a satisfactory service experience. The rationale goes something like this: “If we can simply meet our customers’ requirements and expectations on a regular basis, they will never leave us.”  Sadly, while this strategy may keep you in business, it will never provide the sustainable growth necessary to differentiate you from your competition.

Today’s customers consider okay, satisfactory, pretty good, nothing special service to be mediocre.  Yesterday’s customer grade of B might not get you a C today!  Why?  Here are a few reasons...

When a customer does business with an organization at any point along their service journey, their aggregate interactions will net one of three evaluations: it exceeds expectations, simply meets expectations, or it fails to meet expectations. These expectations are formed not just on based on direct interactions with the company but also based on service provided by the competition and word of mouth from friends, family, and social media.

But, perhaps the biggest factor shaping customer expectations are exceptional service experiences they have received which can span across all industries.  When your customer goes to Disney World, shops at Nordstrom, or buy online from Zappos, their experiences become fodder for comparisons to you.  Is your website as easy as Amazon?  Is your responsiveness on par with FedEx?  Is your product as cutting edge as Tesla?  All those experiences elevate the standards for every enterprise on the planet—whether we like it or not!

The Merely satisfied customers receive exactly what was expected… nothing more, nothing less. At service exemplary companies like The Ritz-Carlton, Chick-fil-A, USAA and Harley Davidson, delivering a service experience that does not exceed customer expectations is regarded as a failure.  Even an Uber driver whose customer ratings fall below a 4.5 on a 5-point scale, loses his or her license to represent the Uber brand.

But hold on.  Isn’t the true objective to always satisfy our customers and just give them what they want? Not if your company is truly committed to driving business outcomes like higher customer return/retention rates, deeper relationships, a larger share of wallet, and increased referrals.  And, certainly not if you want to build a devoted customer base that will become avid extensions of your sales and marketing departments.

Mere satisfaction is just not enough in today’s increasingly high-tech, high-touch world. Customers simply have too many choices to take their business elsewhere.  Customer loyalty, on the other hand, is the perfect antidote to fickle consumers who will bail on you at the first minor hiccup. Focus on adding strategies that foster customer loyalty and consistently exceed their expectations.  Mere satisfaction or loyalty… what will you focus on today?

Jamey Lutz is a customer experience thought-leader with more than 20 years of leadership tenure across numerous industries.  Prior to joining Forrest Performance Group (FPG) in his current role as human performance strategist, Jamey served in a senior leadership capacity with The Ritz-Carlton Hotel Company. He can be reached at Jamey@fpg.com.