nce from a customer perspective, and from it a better predictor of profitability and growth. The reason for this is that real profitability and growth comes from loyal customers who not only buy more (and other things), but stay with the company longer and are more likely to refer the service provider to family, friends and colleagues. We already discovered in the miThe time, money and effort spent on gathering and analysing customer satisfaction measures isn't worth the economic payback, and yet companies large and small regularly survey their customers to get feedback on their satisfaction levels. The problem with customer satisfaction surveys is that they don't tell you much about the perceived differentiated customer experience that drives loyalty in terms of intentions to repurchase, or advocacy in terms of willingness to actually refer you to friends, family and colleagues.

Why is this important?

Satisfaction, as we all know, is an ever moving bar. What kept customers happy about our products and services in the last 10, 5 or even two years wouldn’t now meet the expectations of the average person in the street. Customer wants, needs and expectations move as quickly as the market itself, and so what would have delighted and surprised them a short while back is now seen as run of the mill and worse still as a hygiene factor: while they may not remain loyal because it, they will defect the moment it is absent. So customer satisfaction ratings only ever measure a customer “happiness quotient” with existing transactions.

Recent studies on the other hand, particularly those of Fredrick Reicheld (et al), have shown that measuring and managing the perceived value that the customer places on the ‘experience’ of dealing with the product or service provider is a much better measure of organisational performance from a customer perspective, and from it a better predictor of profitability and growth. The reason for this is that real profitability and growth comes from loyal customers who not only buy more (and other things), but stay with the company longer and are more likely to refer the service provider to family, friends and colleagues. We already discovered in the mid

ce that drives loyalty in terms of intentions to repurchase, or advocacy in terms of willingness to actually refer you to friends, family and colleagues.

Why is this important?

Satisfaction, as we all know, is an ever moving bar. What kept customers happy about our products and services in the last 10, 5 or even two years wouldn’t now meet the expectations of the average person in the street. Customer wants, needs and expectations move as quickly as the market itself, and so what would have delighted and surprised them a short while back is now seen as run of the mill and worse still as a hygiene factor: while they may not remain loyal because it, they will defect the moment it is absent. So customer satisfaction ratings only ever measure a customer “happiness quotient” with existing transactions.

Recent studies on the other hand, particularly those of Fredrick Reicheld (et al), have shown that measuring and managing the perceived value that the customer places on the ‘experience’ of dealing with the product or service provider is a much better measure of organisational performance from a customer perspective, and from it a better predictor of profitability and growth. The reason for this is that real profitability and growth comes from loyal customers who not only buy more (and other things), but stay with the company longer and are more likely to refer the service provider to family, friends and colleagues. We already discovered in the mi

of the average person in the street. Customer wants, needs and expectations move as quickly as the market itself, and so what would have delighted and surprised them a short while back is now seen as run of the mill and worse still as a hygiene factor: while they may not remain loyal because it, they will defect the moment it is absent. So customer satisfaction ratings only ever measure a customer “happiness quotient” with existing transactions.

Recent studies on the other hand, particularly those of Fredrick Reicheld (et al), have shown that measuring and managing the perceived value that the customer places on the ‘experience’ of dealing with the product or service provider is a much better measure of organisational performance from a customer perspective, and from it a better predictor of profitability and growth. The reason for this is that real profitability and growth comes from loyal customers who not only buy more (and other things), but stay with the company longer and are more likely to refer the service provider to family, friends and colleagues. We already discovered in the mi

s only ever measure a customer “happiness quotient” with existing transactions.

Recent studies on the other hand, particularly those of Fredrick Reicheld (et al), have shown that measuring and managing the perceived value that the customer places on the ‘experience’ of dealing with the product or service provider is a much better measure of organisational performance from a customer perspective, and from it a better predictor of profitability and growth. The reason for this is that real profitability and growth comes from loyal customers who not only buy more (and other things), but stay with the company longer and are more likely to refer the service provider to family, friends and colleagues. We already discovered in the mi

nce from a customer perspective, and from it a better predictor of profitability and growth. The reason for this is that real profitability and growth comes from loyal customers who not only buy more (and other things), but stay with the company longer and are more likely to refer the service provider to family, friends and colleagues. We already discovered in the mid ‘80’s that it’s operationally nine times cheaper to keep an existing customer than to acquire a new one, so customer retention is key to growth and profitability.

Customer loyalty in these days of ‘rate chasing’ with credit cards and mortgages, and best unit price with gas and utility companies is, of course, a fickle thing. What is known is that customer loyalty is a value-laden concept that has everything to do which the customer-company relationship, and particularly the psychological and emotional perceptions engendered in the customer experience. In other words the customer has to feel good about their relationship with the company. Customer loyalty is more than the sum of the parts of superior value in terms of price, features, quality, functionality and ease of use. It’s about the entire customer experience that drives growth and profitability.

Customer satisfaction surveys only tend provide a superficial measure of the behaviours that drive profitability and growth. We know this because detailed research has shown that between 60 – 80% of those customers who judged themselves to be “satisfied” or “very satisfied” on satisfactions surveys were saying so just before they defected to the competition. No, the new measure of customer economic value and relationship with the company is Customer Experience Management.

What is Customer Experience Management?

Customer experience management is a way of looking at every single aspect a