Traditionally, Customer Satisfaction & Retention has been viewed & spoken about by decision makers in the same breath. In reality, these two terms are like the two sides of a coin & necessitate a completely different approach in understanding & measuring them.
Both these Key Performance Indicators (KPIs) are essential not only for businesses to stay afloat, but also to add to shareholder’s value. Satisfaction is to do more about attitude towards a product/ service, on the other hand Retention is the demonstrated behavior by your target group.
The basic difference is that while Satisfaction can be stated in nature, Retention is about long term bonding or relationship with the brand. For decades, clients, research agencies & management consultants have been tracking Satisfaction & have tried to draw a co-relation to the actual customer behavior, but alas with little success only.
Satisfaction, Recommendation, NPS etc. the usually heard metrics in corporate board rooms (which are captured typically on a rating scale on a battery of different attributes), does not take into account the volume or direction of the positive/ negative opinions, typically called the word of mouth, into calculation.
This is all the more important in today’s technology connected world, to the likes of social media avenues like Facebook, Twitter, LinkedIn, Trip Advisor etc. to name a few. It is critical to understand that a complete paradigm shift is needed to move away from the traditional approach and metrics, but look at more evolved & actionable metrics like advocacy/ bonding that the customer displays with the brand.
In light of same, a few marketers have understood the benefits of having a dedicated social media team, who are responsible not only for service interventions post a customer’s complaint, but also arrest the negative spread on social media, so as to avoid any further tarnish to the brand, which if left uncontrolled can quickly erode the brand equity, that has been built over decades.
Hence the bigger challenge is to understand what is Advocacy & hence how to make the most of it for your brand. The closest definition being that it’s the brand commitment coupled with a strong positive, recurring yet voluntary casual communication on behalf of the brand.
Some experiences are pleasurable in the subconscious mind, some are painful, some are superficial, while some go deep. They can create feelings and opinions, that can be a challenge to articulate, but which causes customers to take action.
The main objective of businesses hence should be to capture the ‘Moment Of Truth’ (MOT) as & when it happens & look at improving the brand’s experience, by reducing the pain points in the journey. The key is to understand the critical nature of touch points/ processes, their performance, brand perception and the inter-relationships within these levers. This is required for the customers’ journey, right from the information gathering, decision making stage, during the on-boarding process till the final consumption of product/ services, & stretches way beyond the purchase stage.
The day companies deliver on this aspect, we can safely say that customer expectations have been met, of not exceeded by the brand’s performance. The criticality lies in exactly understanding what customers really want, whether they will stay or leave a brand and whether they will be loyal brand advocates acting as Evangelists. This will in tune lead to a positive word of mouth, higher retention rate & a higher share of wallet and be a huge success story, to differentiate effectively over the competing brands.