loyalty service profit chain

Finding the Gorilla in the Data:Five Things We’ve Learned from

Talking with 100 Million People

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where the data comes from…

Customer loyalty Employee loyalty

SMG measures

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#1 Satisfied customers aren’t loyal

5 things we’ve learned from talking with 100 million people

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OVERALL SATISFACTION

5Highly

Satisfied (Top Box)

50%

Zone of Affection

#1 Satisfied customers aren’t loyal

1 2Highly

DissatisfiedDissatisfied

2%2%

Zone of Defection

Zone of Indifference

3 4

Why SatisfiedCustomers Defect

Neither Satisfied

38%

8%

Don’t focus on customer satisfaction.

Focus on customer loyalty!

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#1 Satisfied customers aren’t loyal #2 Customer loyalty drives sales

5 things we’ve learned from talking with 100 million people

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9% 10%

22%

42%

90%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

% Hi

ghly

Likely

Overall Satisfaction Rating

Likelihood to Return

‘Highly Satisfied’ customers are 2 times more likely to Return

SMG Client Data

2.1x I

ncrea

se

top box 5’s are twice as loyal as 4’s

1 2 3 4 5Highly

DissatisfiedHighly Satisfied

(Top Box)Dissatisfied Neither Satisfied

8

7% 7%

17%

32%

89%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

% Hi

ghly

Likely

Overall Satisfaction Rating

Likelihood to Recommend

5’s drive new and lapsed customer trial

SMG Client Data

2.8x

Increa

se

highly satisfied customers are almost 3 times more likely to recommend

1 2 3 4 5Highly

DissatisfiedHighly Satisfied

(Top Box)Dissatisfied Neither Satisfied

9

#2 Customer loyalty drives sales

Same StoreSales Growth

Intent to Return& Recommend

Overall Satisfaction

Friendliness

Speed of Service

Quality

Service attributes drive satisfactionSatisfaction drives loyaltyLoyalty drives sales growth

SMG Client Data

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#1 Satisfied customers aren’t loyal #2 Customer loyalty drives sales#3 Inconsistency is the enemy of loyalty

5 things we’ve learned from talking with 100 million people

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56%

89%88%88%87%

94%93%

42%39%

47%

35%

50%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Speed Friendliness Atmosphere Taste Cleanliness Temperature

Top

Box

Per

cent

SMG Client Data

customers tell us there are huge variances in their experiences across multi-unit organizations

Boxes represent range of scores for at least 95% of the restaurants (+/- 2 standard deviations from mean) or the most extreme score for skewed distributions. Restaurants with 30 or more responses were included.

The gulf between satisfied customers and exceptionally satisfied customers can swallow a business….

Harvard Business Review

#3 Inconsistency is the enemy of loyalty

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#1 Satisfied customers aren’t loyal #2 Customer loyalty drives sales#3 Inconsistency is the enemy of loyalty#4 Loyal employees drive outstanding

performance

5 things we’ve learned from talking with 100 million people

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The Service Profit Chain

Adapted from “The Service Profit Chain,” Heskett, Sasser, & Schlesinger, 1997

EmployeeSatisfaction

EmployeeSatisfaction

RecommendTo

Buy From

RecommendTo

Work

EmployeeLoyalty

CustomerSatisfaction

CustomerSatisfaction

Sales

Sales

LikelihoodTo

Recommend

LikelihoodTo

Return

CustomerLoyalty

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Loyal employees drive comp sales

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#1 Satisfied customers aren’t loyal #2 Customer loyalty drives sales#3 Inconsistency is the enemy of loyalty#4 Loyal employees drive outstanding performance#5 Great problem resolution creates apostles

5 things we’ve learned from talking with 100 million people

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76%

28%18%

10% 9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

HighlyDissatisfied

Dissatisfied Neither Satisfied HighlySatisfied

great problem resolution improves overall satisfaction dramatically 945 guests experienced a problem and brought it to the

staff’s attention

Problem Resolution Rating

OSA

T To

p Bo

x

SMG Client Data

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59%

76%

28%18%

10% 9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

HighlyDissatisfied

Dissatisfied Neither Satisfied HighlySatisfied

NationalTop BoxAverage

great problem resolution improves overall satisfaction dramatically 945 guests experienced a problem and brought it to the

staff’s attention

Problem Resolution Rating

OSA

T To

p Bo

x

SMG Client Data

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A customer with a problem is anopportunity to create an apostle

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#1 Satisfied customers aren’t loyal #2 Customer loyalty drives sales#3 Inconsistency is the enemy of loyalty#4 Loyal employees drive outstanding performance#5 Great problem resolution creates apostles

5 things we’ve learned from talking with 100 million people