Social Networking Has Nailed Customer Satisfaction, Next Stop: Loyalty

Louis Columbus
Cincom Systems

You have to admire the social networking evangelists in industries that have high maintenance customer bases, but dove headfirst into the social networking pool anyway.  That took courage.  And many of them are turning it into a success.  They are redefining how service is done. Challenging their competitors to keep up that are NOT involved in social networking is turning their customer satisfaction into a competitive strength.  You have to specifically admire Comcast, a cable company, for biting the bullet and getting on Twitter, and the airlines who go after customer satisfaction in real time through social networking.

These companies are nailing customer satisfaction using social networking.  They are responding promptly to customer concerns, have a single point of contact for solving problems, have mentioned a process for managing customer problems and their escalation and attempt over and over again to set realistic customer expectations.  Many of them have all these strategies going at the same time.  One wonders how social networking is making the customer satisfaction needle move – and over and above the quantification of it, you can see it online every day.

Making the Transition from Satisfaction to Loyalty

Given how loyalty has become a code word in this economic downturn for financial viability and recurring revenue, and customer expectations seem to be going up rapidly – expecting more for less, - I started digging into this area to learn more.  A video of Dr. Gail McGovern of Harvard Business School, who is speaking on Customer Satisfaction Traps illustrates what appears to be happening with social networking’s’ impact on customer satisfaction. She makes the point that expectations of postal service were met – and tolerated – with the U.S. Postal Service.  Yet Federal Express redefined expectations and led to delighted customers, re-ordering this service industry in the process. It’s only 4 minutes and worth checking out. 

I’ve also been reading Answering the Ultimate Question by Richard Owen and Laura L. Brooks, PhD.  It’s an excellent book for providing insights into how loyalty impacts profitability, providing pragmatic examples of how to integrate Net Promoter Scores into organizations.  What I find most fascinating about this book are the strategies the authors discuss about turning around detractors. The results achieved and then measured are worth checking out.  You can read the authors’ blog here. 

Potential Areas Where Social Networking Strategies Can Impact Customer Loyalty

First, social networking is great for going out and finding detractors – in fact social networking must be like a magnet for those dissatisfied with products or services.  Transforming these customers is even more critical to long-term customer loyally as it stops potentially damaging trends in ones’ customer base. 

Can social networking alone transform a detractor into a promoter? I’m sure the outstanding customer service efforts of those on Facebook and especially Twitter are making an impact.  Yet from what the experts seem to be saying is that any customer satisfied will still leave.

So how can social networking lead to customer loyalty?  From the initial research I’ve done on this, and I’m no expert, here are the key take-aways from what I’ve learned from reading what Richard Owen and Laura L. Brooks, PhD have found:

• Even the most satisfied customers leave.  It’s apparent that if customers are satisfied, they still leave.  If there is a correlation between behavioral loyalty and satisfaction, it is weak.

• The Net Promoter Score (NPS) delivers valuable insights into who detractors are, their relative weight on customer satisfaction, and influence on Promoters.  As was mentioned earlier, getting to know your detractors could be even more important than finding out who Promoters are.  This was one of the most valuable insights from the book, including the strategies companies are using to transform these customers into Promoters.

• Delighting customers with exceptional experiences is far more important than getting rid of their reasons for being detractors.  The book Tuned In: Uncover the Extraordinary Opportunities That Lead to Business Breakthroughs by Craig Stull, Phil Myers and David Meerman Scott discusses some critically important areas in this area.  Personas of customers and the discovery of resonators are two of the many excellent concepts in this book.  It’s worth adding to your reading list this year as is their blog.   

How social networking can serve as a catalyst for customer loyalty is fascinating.  No doubt the authors mentioned in this post already have or will have frameworks that show how companies can get the most out of the accountability and transparency provides. 

Bottom line: Loyalty cannot be earned by satisfying customers, there has to be a focused, intense effort to transform them into Promoters. 

Flickr credits: http://www.flickr.com/photos/serialkitten/78631537/sizes/m/

Comments

[Louis Columbus]

ERPRooney,
Thank you for comment and for taking time to read this blog too. I hope it was insightful and will continue to be useful to you. Thanks for the link to your site too, and if there is any specific aspect of customer experience in ERP you would like to see covered on this blog feel free to share your thoughts with me at lcolumbus at cincom dot com. Thanks!

[ERPRooney]

Hi,
That was a great post.
To achieve success marketing and innovation should complement each other. The new features invented (innovation) reaches customers only by appropriate marketing. Social networking sites have become a boon for marketing professionals.

To know more visit http://erp.com

[Louis Columbus]

Hi Sam,

Exactly, I had the same reaction when I started researching this both out of personal interest and also to present it to my class. To your point and to the video by Dr. Gail McGovern, I think one can be satisfied with a product or service, yet there is the potential to be delighted as well. For example I’m satisfied with Southwest Airlines and their commitment to ontime departures and arrivals. It’s an airline that works well for business travel. I’m not loyal however; I’d gladly take another flight at the same price that had free WiFi so I could get more work done.

I think the same allegory holds true of the U.S. Postal Service and FedEx. As the video shows the continual ratcheting up of the quality of service and ability to deliver exceptional experiences makes loyalty a moving target. That’s what makes this subject so fascinating. Fred Reichheld’s The Loyalty Effect and The Ultimate Question: Driving Good Profits and True Growth are great books on this subject.

Thanks for your comment and for reading this blog. Defining loyalty in the context of social networking’s’ influences really is fascinating.

Thank You,

Louis

[Sam]

Hi Louis,

Once again another thought provoking post. What's got me thinking most here is the point "even the most satisfied customers leave."

I don't know how that would be possible? I'm thinking of services that I'm very "satisfied" with and I always return. Amazon.com, Paypal.com, and certain restaurants or cafes just to think of a few off the top of my head.

I’m curious to hear if you, Louis or any other readers have experiences where you've been completely satisfied with a product or service but have not been loyal?

Nice one,

Sam Zipursky