Customer Satisfaction vs Customer Loyalty - The MSR Group

This is an interesting article about the difference between customer satisfaction and customer loyalty and how to measure and increase loyalty. The author makes a good case for the difference in the two concepts and the critical importance of understanding and improving customer loyalty. They recommend Net Promoter Score coupled with retention measures to gauge loyalty. The research that we do on behalf of clients of The MSR Group strives to take this further.

We recommend measuring customer advocacy with the Net Advocacy Rating (NAR), an enterprise-wide metric that identifies how successful you are in growing and maintaining advocates, those customers who are extremely loyal and will tell others about you. Longitudinal analyses for our clients, tracking customers over time, have shown that advocates buy more of your products, interact with you more, use stickier products and generate more revenue for your company than do those who are not advocates.

While this article suggests a few general ways to build loyalty, a good ongoing customer experience measurement and improvement program will identify what aspects of the customer experience are driving advocacy, for example through periodic key driver analysis, and help you to understand the best path for increasing the percentage of advocates.

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