Series 2, Part 1: The Myth of Customer Satisfaction

It is my experience that many retail pool company owners believe they have extremely satisfied customers — but very few actually measure customer satisfaction. Some even believe that their years of experience have anointed them with some kind of clairvoyant customer comprehension. 

What's more, many lose sight of the primary reason for creating extremely satisfied customers, which is to improve customer retention. In addition, most don’t measure customer retention, either. How can I make such daring declarations? Because they're based on solid evidence.

Introducing groundbreaking pool consumer research

Many of you read my blog series run by AQUA last year. With the encouragement of many, it is a pleasure to announce Series 2 based on the new 2013 groundbreaking research conducted by Xmente Swimming Pool Retail Academy. 

Last year’s series disclosed our research titled: Inside the Mind of the Loyal Retail Consumer. This year, we moved inside the wallet of pool retail customers by analyzing five years of point-of-sale transactions for 88,000 pool retail consumers. The research was possible with the cooperation of multiple retailers across the U.S. and included well over half a million purchase transactions and 10 million data points.   

Our goal was to further our understanding of loyalty by first examining customer retention and then learning how to improve it — subjects that have been largely uncharted in the pool industry. This article is the first in a series that will unfold over the coming months sharing some of the results.

Busting a myth

While it may seem intuitive that extremely satisfied customers will remain loyal, the facts are contrary. Chart 2-1 indicates that 51 percent of self-proclaimed loyal customers (Loyalists) are not extremely satisfied with the overall value received from the pool product store they frequent. It also points out that even for customers that are not loyal (Nonloyalists), 18 percent are extremely satisfied. 

So if a company satisfies its customers and/or doesn't hear complaints, is it on safe ground? No. That's the myth of customer satisfaction, and you should consider that myth busted. In reality, while customer satisfaction is an important ingredient, it is not solely responsible for long-term customer retention.  

Answering important questions

What is the cost of customer defection in the retail pool products market? How does it affect our most loyal customers and the bottom line? How can we identify exactly who these customers are? Is there an early warning system that can be put in place? How can we improve retention and what can it mean to our businesses? What can we do to win back lost customers?   

If you have all of these answers, you are way ahead of the game. Unfortunately, our research confirms that there is a huge gap between what retailers may believe and what consumers are doing with their wallets.

I will address these questions and more in upcoming blog articles derived from our research. I hope to stimulate discussion, debate and crowd-sourced solutions to benefit the entire industry.  

Your turn

Are you measuring customer satisfaction? If so, how are you doing it and how is it working? Please let the industry hear from you — I want to shine a light on opportunities with the goal of helping retailers improve. Remember, even if you think you are among the best, there is no finish line.