Customer Satisfaction and Customer Loyalty- What’s the Difference?

When Sam sold ten pieces of Yoga mats to different customers, he thought that all of them were satisfied. But, it was not the case. He received one review on his website from an unsatisfied customer. In the second example, Sam has some clients who regularly buy from his store and refer the products to others.

The first instance is related to customer satisfaction. In the second case, the customers are loyal to the company. These two metrics are interconnected in a way. If the customers are satisfied with their experience with a company, they are more likely to come back. However, it cannot be said that every satisfied customer will repeat purchase and be loyal to the company.

If you own a business, you must have a clear idea about these metrics. Understanding how your customers feel will help you to detect the areas you can improve. This might lead to benefits like boosted sales and long-term loyalty.

How customer satisfaction differs from customer loyalty?

To clear out the concepts of both the metrics, we will discuss them separately in this blog.

What is customer satisfaction?

According to HubSpot, customer satisfaction can be defined as a metric that helps to measure the extent to which a customer is happy with a service, product, or experience. Here, the focus remains mainly on the most recent interaction the customers had with the business or company. Based on the buyer’s level of satisfaction, he/she may/may not visit the same company. For example, a student may post a positive review after taking the assignment writing service from a company. But, he/she might not repeat the transaction with the company again. However, customer satisfaction is an essential step towards making a customer loyal. There are different ways in which customer satisfaction can be measured. One such method is taking customer reviews.

What is customer loyalty?

Customer loyalty is a metric that shows if the customers are devoted to the services or products offered by a company. It also indicates the customers’ tendency to choose one brand over others.

Happy customers always prefer brands that never fail to meet their needs. Loyal customers exclusively buy a company’s services or products. They are not likely to change their preferences for another company or brand.

Brand loyalty is created when a firm consistently provides the same product each time by keeping the quality intact. Various loyalty programs and rewards are offered to make the customers loyal.

Importance of customer satisfaction

In today’s world of rapid digitization, one negative review can damage your brand’s reputation. Hence, it is a must that you learn about the customers’ satisfaction level. The following points can help you to understand the importance of customer satisfaction:

  • You can identify unsatisfied customers– By measuring the customer satisfaction level, you can learn if the customers are unhappy. To do this, you need to arrange customer satisfaction surveys, examine the negative customer feedback, etc. This will help you to figure out the changes you need to make to keep your customers happy.
  • You can find out happy customers- Customer satisfaction measurement also lets you identify the buyers who have found success using your products or services. A survey conducted on one thousand business leaders found out that companies who are not prioritising customer success do not grow. You can identify satisfied customers by requesting customer feedback. Happy customers are more likely to refer your business and help it to grow.
  • You can improve customer retention- If you measure customer satisfaction, you will gather related data about the experience the customers had with your business. Research shows that 60% of customers leave a brand because of bad customer service. The information you collect after measuring customer satisfaction helps you to make personalised offers to meet the needs of individual customers. This provides you with the opportunity to retain your customers.

Importance of customer loyalty

Apple Inc. is an excellent example of a company that invests in building customer loyalty. The company aims to ensure that customers continue with them throughout the product line. Wondering what the reason behind this is? The following points will help you to understand.

  • Higher profits- Any business works to generate revenue, which is more than the expenses. The customers who are loyal to a brand are more profitable. Loyal e-commerce customers spend over double the amount they spent on their last purchase.
  • Cost-efficient- A business needs to invest in acquiring new customers than selling to the existing ones. A company that has many loyal customers can grow easily. And companies with less loyal customers have to use more resources to get new ones.
  • More referrals lead to more sales- Loyal customers always refer a brand to his/her friends and family. As the referral customers already view the brand positively, they are more likely to make a purchasing decision. This will ultimately lead to an increase in sales.

In conclusion,

Customer satisfaction and customer loyalty are undoubtedly important for the growth of a business. Building a strong bond with customers can usher in many benefits. It is necessary to pay attention to the customer’s psyche and utilise these two metrics to take your business to the pinnacle of success. Here’s wishing you all the best with your endeavours.

Author’s Bio 

Shirley Brown is the Senior Marketing Manager at a renowned MNC and CPM Homework Helper by choice. She has helped many companies to increase their sales. She has also written an E-book on marketing practices for today’s businesses. Shirley likes to play golf and spend time with her friends.

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