Is Your Supply Chain Achieving Customer Loyalty?

Companies need to focus time, attention, and dollars on the areas that will meet their customer’s needs.  While many companies have plans to achieve those challenges of loyalty versus satisfaction, repeat business, and the cost of losing a customer, companies realize that without true customer loyalty, repeat business and cost of losing customers, they cannot easily sustain success.

One of the biggest mistakes made in trying to achieve true customer loyalty are attempting achievement before your supply chain is ready; not knowing that employee loyalty is an absolute prerequisite before achieving customer loyalty; and only measuring and achieving customer satisfaction, which is not true customer loyalty.  Understanding your supply chain maturation level will help you set expectations about your likelihood of success, and ensure you understand not only how to achieve true customer loyalty, but when to achieve it (Dicello, 2000, n. p.).

Loyalty vs. satisfaction. Executives now know that customer loyalty is not customer satisfaction. Customer satisfaction is just an attitude at a moment in time, usually while responding to a verbal or written survey. Loyalty is actual behavior that results in multiple buying cycles over a period of time (Dicello, 2000, n. p.).

In order for companies to ensure they have loyal customers they have to have loyal employees.  To achieve this employee loyalty, the company has to educate all and ensure the company is schronized, one needs to eliminate the feelings that the left hand does not know what the right hand is doing.  When your companies employees are loyal, their customers will see that and increase their awareness of the entire business, which in turn will have them see the good in doing repeat business with a company that has loyalty for its employees.

Repeat business. Conversely, customers will quickly pick up on an employee’s lack of loyalty and awareness of their role in the big picture. While they may be happy to do business with you, they are ready to move on when they are offered a chance to work with a loyal employee base and a more mature supply chain. This is why trying to achieve customer loyalty before your supply chain is ready at best only produces satisfied customers (Dicello, 2000, n. p.).

Satisfaction is needed but it does not equate to a customer’s commitment to spending money with your company. There is not a lot of support showing that satisfaction will guarantee repeat business, sometimes it is all about money and the cost of doing business, customers will go where they can get what is needed at a cheaper price. With this in mind, companies are moving toward the loyalty aspect of their customers, giving some type of incentive for being loyal.

The cost of losing a customer. Achieving and measuring customer loyalty is not as nebulous as you think. Customer loyalty equals customer retention. Customer retention not only means huge profits, it is a key reason e-commerce is evolving so quickly as a strategic enabler in the E2E supply chain (Dicello, 2000, n. p.).  Companies cannot afford to lose customers, per say, but on the flip side, they cannot afford to continue to satisfy their customers at any cost.  In some cases, let go of a customer is cheaper than trying to keep them in the long run, depending upon the circumstances.