There is a dominant assumption within the CX industry that more satisfaction means more loyalty, and that increasing loyalty is the most effective path to growth. Yet there is very little data to support these beliefs.

To quote Tim Keiningham et al. “Our research finds that changes in satisfaction (and NPS) explain a miniscule 0.4 percent of a change in share of wallet over time.”

Matt Dixon’s research in The Effortless Experience found “Virtually no statistical relationship between how a customer rates a company on a satisfaction survey and their future customer loyalty.”

Even Fred Reichheld’s research in The Ultimate Question confirmed that these beliefs are unfounded: “60 to 80 percent of customers who ultimately defect had said they were satisfied or even very satisfied the last time they participated in a survey.”

Furthermore, as Byron Sharp points out in his influential book — How Brands Grow — a loyalty first approach is not the optimum path to growth:

“In market after market, the potential gains from acquisition dwarf the potential gains from reducing defection…Growth is due to extraordinary acquisition. Contraction is due to dismal acquisition.”

What does all this mean? If your CX programme is promising commercial returns to the business through improving satisfaction and loyalty, you might be facing an uphill struggle.

If you’d prefer to take an evidence based approach to running CX programs that deliver real world results, The Leader’s Guide to Customer Experience is here to help. Link in the comments!

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