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Loyalty. It’s an important thing in the car business. If you are brand wanting to grow then the job is made easier if you can hang on to the customers you already have, and if you are brand that wants to make profit then you know that you tend to make more out of existing customers than new ones. Plus there is a heap of evidence that proves it is cheaper to look after an existing customer than it is to find a new one.

So the business case for generating loyalty amongst owners is a strong one.

But loyalty is a subtle thing, and I’m a little concerned that loyalty and satisfaction is often assumed to be the same thing. I don’t think it is.

Let me give you an example. About 12 years ago I went on holiday to a beautiful Island off the cost of North Eastern coast of Australia. My wife and I stayed there for 10 days. The food was great, the accommodation superb and the weather perfect. I would give it 10 out of 10. But I have never been back. Satisfied? Yes. Loyal? No.

About 12 years ago I also started banking with my current provider. They have been pretty ordinary in their levels of service, they have never surprised and delighted me and in fact when I had a theft which resulted in me having to change all my business banking passwords, they were nothing short of diabolical. I would give them a mark of 5 out of 10. Satisfied? No. Loyal? Yes.

So here’s my thinking; the dream holiday was superb but expensive, it also required at least 3 weeks away from work due to time taken to get there and of course jet-lag plus the location is not child friendly which would make it impossible as I now have a 5 year old son. The truth is that my lifestyle has changed and my priorities are different. It remains the best holiday I ever had and 10 out of 10 in terms of satisfaction, but the chances of me ever returning are close to nil.

My bank situation is a little different; whilst they have never been great, for the majority of the time I only need them to be competent. I am not emotionally attached to the colour of my bank card or the design of my online banking page. I consider that they provide me with a facility rather than a service. When they did screw up I did think about leaving, but when I looked at the effort it would take I decided it probably was not worth it. Add to that the feeling I had that the alternative banks were probably no better and I decided that 5 out of ten was probably all I could expect and all that I need.

So let’s apply these observations to our beloved motor industry. For years we have asked the question ‘how satisfied are you?’ of both our sales and aftersales customers. We have then slavishly tracked loyalty rates, working hard to improve satisfaction in the hope of retaining more customers. But what if customers leave, not because they are dissatisfied, but because a) their lifestyles change b) the alternatives look better value c) It’s no longer convenient………………..and a whole host of reasons that may not be our fault?

I’m not suggesting that we should give up on making customers happy, far from it, as a customer I love being happy… give me more of it please! What I am suggesting is that we need to be more balanced in our assessment of why some people stick with products and services and why others leave. It can never just be about the simple question of ‘are you satisfied?’ it has to be about far more than that.

I recently came across a business that doesn’t measure satisfaction rates post-event amongst customers. Of course it is keen to make sure the customers are happy ‘on the day’ and will respond if problems occur. It measures its volumes and profitability on a daily basis and most importantly focuses on making sure that its processes and product are close to faultless. It has given up linking satisfaction to loyalty as it realises the propensity to loyalty is based on far more than just satisfaction. They believe that as a consequence they have become more customer orientated and guess what? The business has flourished.

So here are a couple of questions worth asking yourself.

1. Have you ever lost a very satisfied customer to another brand? Why?
2. Who are your most loyal customers? Why?

The answers you get may be quite revealing. Because as we all know 10 out of 10 does not guarantee a repeat purchase any more than a 5 out of 10 meaning the end of the relationship.

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