For the past 10 years, I have had the privilege of participating in the Central States Conference of State Bankers Associations. Each summer, leaders from 18 state bank trade associations ‒ presidents and CEOs, chairmen and vice chairmen ‒ gather to deliberate about the issues facing their respective organizations. This cross-fertilization of senior staff and volunteer leadership across state lines has proven to be an effective way to enhance our collective knowledge and influence. Last week the 2016 version of this gathering took place in Lake Geneva, Wisconsin, under the capable leadership of Rose Oswald Poels, president and CEO of the Wisconsin Bankers Association.
Ms. Poels scheduled several notable speakers, but one in particular stood out for me. James Kane, a researcher and author, spoke on an issue that I had never before focused on. He and other experts have spent the past 30 years studying the differences between loyalty and satisfaction. I am paraphrasing, of course, but generally loyalty ‒ in customers, family and friends, employees, etc. ‒ has distinct characteristics that both cause it and result from it. Loyalty is what every business aspires to achieve in its customer base. Often, however, we confuse loyalty with satisfaction. Satisfied customers will stay with you, but only as long as you continue to satisfy them with service, products and innovation. Loyal customers will remain through practically anything and will even talk about their loyalty, thus becoming salesmen to some extent.
The clearest analogy from Mr. Kane was in comparing loyalty versus satisfaction to cats and dogs. Having owned both, I could relate. Clearly, dogs are loyal. When you get home from work, a dog will rush to the door to welcome you and shower you with unconditional love. Cats, on the other hand, are at best satisfied. They seem to know you are home, but they will not meet you at the door, unless they want something. Cats intuit that they have a relationship with you and will give you just enough attention to keep that relationship going.
Your customers fit into these camps, too. You have loyal customers who love your products and services. Chances are that they know you or someone in your company, and likely there are personal connections with them. These loyal customers love you so much that they freely talk about your company, and why it is the best. By contrast, satisfied customers may be frequent purchasers of your products or services ‒ perhaps they even buy exclusively from you ‒ but they will only continue to buy from you as long as you keep them satisfied. There is no personal connection. They remain your customers until someone else offers better, cheaper or more convenient products or services.
How can an organization turn satisfied customers into loyal customers? The studies that Kane cited show that personal connection is the trigger. I am oversimplifying, but connections have to do in part with how our brains are wired. What can a company do to relate to and form connections with customers? Do marketing efforts focus entirely on product features, or do they invite personal connections? It’s a fine line, but it could make all of the difference regarding customer loyalty.
I appreciate Rose for bringing forth James Kane to share his unique and important insights into developing customer loyalty. Just as you work hard to make your customers loyal to your institution, the Indiana Bankers Association strives to give you, our valued members, reason to connect with us. Please let us know anytime what we can do to keep you satisfied and earn your loyalty.
– S. Joe DeHaven