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A Satisfied Customer is NOT the Same as a Loyal Customer!


Learn what it takes to keep loyal customers.Learn What It Takes to Keep Loyal Customers

By Jeff Tobe

Just as healthcare billing organizations experience turnover in their employee ranks, turnover occurs in their customer bases as well. The extent to which both occur has a significant influence on your bottom line.

There is a lot of emphasis these days on creating satisfied customers, but is having satisfied customers enough? In our research, we found several sources that conducted surveys addressing the impact of customer satisfaction on loyalty to a particular vendor. Depending on the survey source, between 60 and 85 percent of customers who chose a new vendor indicated that they were satisfied or very satisfied with their former vendor.

What these results say is that having satisfied customers is not always enough. Certainly, the first step in a vendor-customer relationship is working hard to keep customers satisfied. If your customers are not satisfied with the experience you deliver, you can rest assured that there will be a high level of turnover within your customer base.

An important transformation needs to take place in the way medical billing professionals view their relationships with their customers. The transformation involves moving customers from being satisfied to being loyal. It is important to keep in mind that a satisfied customer is not necessarily a loyal customer. Moving a customer from satisfied to loyal requires hard work, consistent attention at all customer "touch points," and diligence in delivering a truly outstanding experience.

Any given customer can be satisfied with multiple suppliers of the same product or service. Does the level of satisfaction factor in? Possibly, but not likely. The more likely scenario that gets played out is that, as long as a threshold level of satisfaction is achieved, the customer will tend to do business with the medical billing company offering the best price. Clearly, price will always be a factor to some extent in terms of which company gets the business. However, what happens when a company is able to differentiate itself in terms of building some degree of client loyalty? Chances are good that price becomes less of an issue as loyalty increases.

Satisfied customers allow you to be in the game, so to speak. However, with loyal customers, you continually win the game. We look to five attributes to determine a customer's loyalty. A truly loyal customer:

  • buys certain products or services consistently, if not exclusively, from you;
  • tends to be an early adopter of new products or services that you introduce to the market;
  • is less price-sensitive because of the added value they consistently get from you;
  • frequently refers or recommends others to you; and
  • actively promotes/advocates your services in the broader marketplace.

The more of the aforementioned attributes a given customer displays, the more you should consider them your "champions."

So, how do you build customer loyalty? First, we need to address loyalty as it relates to the product or service itself. Let us look at what we will refer to as a commodity product. A commodity product (or service) is one that looks and functions identically or nearly identically among different suppliers of that product. In this case, there is little to differentiate suppliers other than price or level of service. In the case of differentiated products, the various suppliers can point to subtle (or not-so-subtle) differences in the product in making their case for buying one over another. If a differentiated product clearly has a functional or benefit advantage over those of its competitors, long-term preference can be achieved based on that advantage alone. However, in most cases, the competition will simply upgrade their own product to deliver the same functionality or benefit so, over the long haul, the level of product/service-specific loyalty diminishes.

We raise the issue of commodity versus differentiated products and services only to point out that in many ways and in most cases, there is very little sustained product differentiation. The implication, then, is that we have to build loyalty in other ways.
Here are some things to keep in mind when attempting to build customer loyalty:

Let each customer know that you are interested in him or her for the long-term. This implies that your people are very much geared to being problem solvers for the customers. They must understand that their jobs exist to solve customers' problems and to assist the customer on demand.

Think in terms of multiple relationships with the customer. This does not mean a seller-buyer relationship. This means attempting to cultivate as many individual relationships as possible at every level of the customer's organization. While this is often disputed, we firmly subscribe to the notion that people first seek to buy value and, secondly, prefer to buy that value from people they like and trust. Perhaps the key differentiating variable in the business world today is people. The quality of people you put in front of your customers will clearly help separate you from your competition.

Think "value," not services. Make every attempt to differentiate your service from the competition. Try to stay out in front of making your service more functional or beneficial to the customer. The essential ingredient here is value. Does the customer perceive that your service is worth more to them than your competitors' services?

Engage the customer at extremely high levels. This means that your processes must be efficient, your people who have any impact on customer value ("touch points") must be highly trained in customer experience skills, and you must establish a culture with high expectations for interacting with customers or supporting those who do. Nothing short of outstanding customer engagement can be expected without exceptions.

Think long-term. Your business needs to establish a stable customer base. Companies that have a short-term mentality rarely, if ever, build much customer loyalty. Do not go for the quick sale just to generate revenue and to move on to the next target. Build a strong relationship with the customer and repeat sales, add-on sales, and referral sales will follow. Allow customers to provide you feedback easily and on their timetable. Encourage your customers to contact you with ideas, problems, concerns, or with a pat on the back that can be passed on to employees for a job well done. Most importantly, act on that feedback!

Evolve your culture. Your stakeholders' economic value is created at the seam where your people and your customers' people engage each other. Create an environment of high accountability, high performance, high morale, and high productivity. Engaged and productive employees will do a lot to build customer loyalty.

In summary, you can successfully build customer loyalty, but it does take hard work and clear management focus. Your organization needs to re-examine every touch point with your customers' organizations and listen closely to what the customers need from you as their vendor. Then listen between the lines to what the customer is not saying so you can anticipate what they might need next.

Do you want to evaluate the potential for success of your business growth strategy and its underlying customer focus? Take this free online evaluation to get a baseline from which you can begin to work on building customer loyalty versus customer satisfaction:

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