CUSTOMER LOYALTY: Why Satisfied Residents Defect


Yes, they probably are—but don’t take it too personally. It is not always related to you, your company, product or the quality of the service delivered. There are many good companies and products that have customers defecting in droves.

In fact, a consistent research finding is that 60-80 percent of lost customers reported being “very satisfied” or “satisfied” just prior to defecting. Wow! The good news is that 98% of businesses today are satisfying customers’ wants and needs. The bad news is that good service is not good enough to inspire customer loyalty. There was a time when service was the economic value but today it is no longer a competitive position. We are now living in an experience economy. Don’t get me wrong…customer service IS necessary but no longer sufficient by itself. In order to earn their customer loyalty, your residents need something that will clearly distinguish you from being just another apartment community—one that can easily be exchanged for the competitor down the street.

Things that make you go hmmm. If a resident has one great experience after another will they become loyal? No, loyalty is never a guarantee. If you have read my prior blogs you know that I LOVE COFFEE! It is my favorite meal of the day. I am very serious about my coffee and I spend good money to get it. I may be like some of your residents, so pay close attention to what I am about to say.

I LOVE STARBUCKS! I visit my local coffee house at least two times a week (don’t tell my husband) and from the moment I pull up to the drive- thru a sense of calm comes over me. I know just about every voice that comes through that little speaker and they know mine. I usually order a Tall White Chocolate Mocha but at least once a month they surprise me with a Grande. It is probably a mistake but I certainly do not complain. One day when I pulled up to the window they presented me with a small bag. In it was a Cake Pop that I am certain was less than 30 calories. It happened to be my birthday! It was just amazing and it made my day. I LOVE STARBUCKS! I LOVE the taste of the coffee, I LOVE the service I receive, I LOVE the music they play inside the store, I LOVE their treats, I LOVE STARBUCKS! What might surprise you is that I defect from Starbucks at least twice a month.

I discovered the McDonald’s Iced Café Mocha a few months ago. It is a good option for me when I have overspent on my Starbucks coffee for the week. While I don’t feel that sense of calm as I approach the drive-thru, receive any special recognition or surprises from their employees, I do enjoy the drink. It satisfies my wants and needs—that’s about it. My point is this…Customer satisfaction and customer loyalty are not the same thing and there are times when your loyal customers are not loyal.

So although we often hear the words customer service, customer satisfaction, customer experience, and customer loyalty thrown around and even used interchangeably, there is a difference….

At the end of the day customer loyalty is built from the bottom up. It is the icing on the cake…the cherry on top!

  • Customer Service is supplying your residents with their wants and needs.
  • Resident Satisfaction is a measure of their expectations. How well did you fulfill their wants and needs?
  • Customer Experience (CX) is the sum total of all conscious and unconscious events over the duration of the relationship. Every time there is an interaction a customer experience is being created—good, bad or ugly.
  • Customer Loyalty is the ultimate reward for the way your people, product, service, etc., interact with residents. Loyal residents stay longer, are more willing to take the rent increase and refer their friends—that’s true customer loyalty—and it gives you a competitive advantage.

Your satisfied residents focus on price, shop around for concessions and run to your competitor when you mess up.

Your loyal residents focus on value, reward you with their loyalty, forgive you for an occasional mistake, recommend you to their friends and family, and are resistant to the competition (sometimes).

The goal is to build customer loyalty – residents  who actively choose you, rather than simply remaining your resident because of the absence of an alternative.

This short YouTube video really hits home about customer loyalty: Why Satisfied Customers are No good!

What are you doing to ensure your customers are MORE THAN satisfied?

-Maria Lawson

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