Tuesday, April 14, 2009

Loyalty not Satisfaction

A recent column on the Otho Supersite written by Free Lee discusses some lessons he learned at the Disney Institute in Orlando, Florida. His concern was whether or not the satisfaction of customers at a Disney resort would have any of the characteristics of satisfaction of patients with suffering grief and pain. the first thing that he noticed was the Disney uses a 1 to 5 scale for satisfaction but only counts the percentage of 5s. Disney does not measure customer satisfaction, they are measuring customer loyalty. The management at the Disney Institute use an article from the Harvard Business Review which presents research that shows that on a 1 to 5 scale a customer who marks a 4 is six times more likely to defect than a customer who marks 5 which implies that there is a six-fold increase in customer loyalty between 4s and 5s. It is amazing how many companies think that scores of 4 and even 3 on a 5 point scale suggest customer loyalty. Those companies should talk with the folks at the Disney Institute.

After reviewing his own data from the hospital, he noticed that many of the comments from patients that would indicate a 5 included words fell into three groups. I think these three groups of words are universal and for that reason I have listed them below.
1. The first group include words that are synonymous with compassion. This would include words like caring, comforting and kind. These represented about 80% of all the adjectives used for what would be considered a high score such as 5.
2. The second group includes words that are synonymous with courtesy. This group was a distant second in the number of comments.
3. The third group include words that describe competence. These words were the least mentioned.

A key insight by Mr. Lee is that courtesy and competence are expected, but loyalty is gained through showing more that simple courtesy. For the hospital it is engaging the patient by showing kindness, caring and compassion that is clearly perceived. While many service industries focus on courtesy and competence, they may be missing the differentiator, compassion.

The bottom line is that I think Mr. Lee has introduced me to a new dimension of service excellence, namely, compassion. I know that most of the training consultants that I have seen train only for competence and courtesy but I am not aware of any that train service people to be compassionate. One argument against using compassion in the commercial market place might be that customer service people will give too much away. That may be the case if they are not properly trained. However, I will take the position that compassion used properly will never be considered a negative by the customer. I will also take the position that this may be the shortest route to customer loyalty. I look forward to finding research to support my position. If anyone has such research I would appreciate a lead to the source.

1 comment:

Paul Schwartz said...

I do like this methodology you suggest as it's easy to comprehend. I have always defined compassion not as feeling sorry for someone, but the ability to put yourself in another person's situation. If employees can do this, then the customer relationship will be strengthened as the customer will feel they have been understood. Looking forward to more on this.


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