Turning Satisfied Customers into Loyal Customers

Light BulbCreating a secure foundation for your business comes down to understanding both the hearts and minds of your customers. Customer Satisfaction is VERY  DIFFERENT from Customer Loyalty. One is a requirement to do business; the other is the basis for sustained profitability and growth. The irony with regard to customer churn is that most organizations believe pricing as the primary reason for customer turnover. However, 70% of customers indicate poor customer service as the prime reason for “defecting.”

So, what is the solution? To determine the solutions, it is important to first answer a few basics questions that every organization should be asking themselves:

Question: What is the true definition of customer satisfaction?
Answer: Customer satisfaction is just that, a customer’s sense of satisfaction. Speaking simply, customer satisfaction is a measure of expectations being exceeded, met, or not met. That’s it. To break it down a little further, customer satisfaction is seen as a key performance indicator (KPI) and has become a key differentiator and a key element of business strategy.

Question: Who are my customers?
Answer: This is a pretty easy and straightforward answer, right? We would like to think so. Our customers are not just our residents, as we would often like to believe. Our customer base includes everyone within the organization. It’s not just the residents, but it also includes the family members, employees, referral sources, and even members of our community.

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Question: How are we measuring customer satisfaction?
Answer: For years, the standard tool for measuring customer satisfaction has been the paper-based survey. Few have been brave enough to venture into the online surveys because of the demographics of their residents. Yet, I hear time and time again at different conferences how intelligent our residents are, yet we do not treat them that way. However, there are enormous benefits to online surveys that are not available in the traditional paper-based tool.

Question: Are we meeting our customers’ expectations?
Answer: Allow me to preface my comments with this statement: My hat is off to all of the organizations who are implementing the tools to determine the customer satisfaction in their organizations. However, the bigger question is what are we doing with those results? I have heard first hand from residents and family members across the country that completing the survey is a waste of time because nobody does anything about them. I have had some residents be so bold as to say they doubt the results are even being read. This is a great segue into the last question.

Question: Do we have Satisfied customers or Loyal customers?
Answer: This may be the single most important question we should be asking ourselves. There is a significant disconnect between a satisfied customer and a loyal customer. Most survey results show that the respondents are satisfied/happy. However, it is these same respondents that leave your community for another senior living community.

Perhaps you have asked yourself some or all of these questions, yet you still not see a significant difference in your organization. Perhaps you are ready to throw in the towel and invest your money in something other than satisfaction surveys. Perhaps you will continue to do things the way they have always been done, and just hope for better results next time. Perhaps you will be that very small percentage that believes that change is a key strategy to growth and success, and will continue to strive for excellence. If you fall into that last group, then continue reading. After all, change is a good thing and does not have to be a painful experience. On the contrary, change can and should be a welcoming experience. It’s how change is implemented that drives the acceptance of change.

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So, when it comes to creating a culture of loyal customers, let’s discuss some key areas that will lead to success. The success of any surveying program can be narrowed down to a few key areas. If these areas are ignored, you should never expect the return on your investment to be anything above marginal. So, what are these key areas? I am glad you asked.

Timeliness: The Key to Effectiveness
The best customer data in the world is useless—if you don’t get it quick enough to act on it. You need to have a process for gathering and reporting intelligence that allows you to continually monitor and share individualized customer experiences in real time—enabling you to take instant customer-saving action at any level in your organization. Real-time responsiveness is the key to retaining customers when their loyalty is on the line (which is always). A customer’s lifetime value can be lifted or lost in a matter of hours or even minutes. Saying all of this, I am not suggesting doing away with the paper-based survey. If you do continue to use the paper-based survey, then plan to implement a follow-up solution that provides you and the customer with real-time information.

Customer Participation - Understanding Human Nature
Nine out of ten customers would rather take their business elsewhere than give honest feedback to your face. Getting them to open up about their experience requires an anonymous, pressure-free feedback outlet—one that’s capable of respecting customer individuality, rewarding participation, and returning personalized results.

Continuous Communication
The communication starts long before the surveys are ever distributed. Your customers should have a good understanding of the process and what they can expect. Then the lines of communication need to remain open throughout each step of the process. Once the results have been received, they need to be communicated to the customers. It is vital that the customers know they have been heard. Just knowing they have been heard will make more of a difference than you can imagine.

Action: The Most Important Element
If you do not have an action plan in place, then it is truly a waste of time and resources to conduct the survey in the first place. Do not fall into the trap of doing nothing as a result of budget constraints. The organizations who have a customer satisfaction program in place build it into their budget. The organizations that achieve the greatest success in their program also include an action plan in their budget. Improvement only comes as a direct result of correct actions. It will probably be impossible to “fix” all the issues that come from the survey program. However, there has to be some action towards resolution to gain your customer’s trust and loyalty.

Regardless of the tool that is being used, these four areas are critical to the success of your program. If you have never implemented a customer satisfaction program and you are entertaining the thought of doing so, you have a distinct opportunity over those organizations that have been measuring customer service for several years. You have the opportunity to correctly implement the program from the very beginning. The rest of us will have to make a commitment to change and celebrate the victories regardless of how big or small they may be.

In conclusion, I want to go back and touch on who our customers really are and why their loyalty is crucial to Smiley Snowthe success of an organization. Remember, our customer base stretches beyond just the residents who live in our community. Our customers are the resident family members and our employees. You cannot put a price tag on the lifetime value of a customer. Just because a customer indicates a high level of satisfaction does not mean that they are or will be loyal to you. Why? There could be a number of reasons, but I believe the main reason is because there is no emotional connection to the community. A loyal resident not only lives their entire life in your community, but they also become one of your greatest referral sources. They become a Community Ambassador.

When it comes to your employees, they are your greatest asset. Research has shown time and time again that the primary reason for an employee leaving an organization has very little to do with compensation. The primary reason is that they feel under-valued and under-appreciated. Research has also shown that it takes 2x a person’s salary to replace that individual. That statistic alone is a major hit to the organization’s bottom line. On the other hand, it does not cost you a thing to pat someone on the back and tell them you appreciate them. Showing appreciation to your staff is not just about affecting the bottom line. Quite simply, it’s just the right thing to do.