Customer Satisfaction, Commitment, and Loyalty Drivers

For-profit corporations can learn much from association membership practices, and associations can, similarly, learn from corporate practices and research.

That’s why I found the study of what drives customer satisfaction, relationship commitment, and loyalty intention in online communities of interest. The study's results appeared in the article "Creating Customer Loyalty in Online Brand Communities" in the journal Computers in Human Behavior.[1]

The research recruited participants from two online brand communities and surveyed them about their experiences. A total of 627 submitted their responses to an online questionnaire using a five-point Likert scale from 1 (strongly disagree) to 5 (strongly agree) on the elements that supported the commitment to the brand's products.

The research explored many hypotheses but found four top correlations to these community commitment characteristics.

The top finding supporting customer satisfaction and loyalty focused on how well the brand provides comprehensive product information to the participants. Meeting this need requires good community management with detailed brand and product insights for the community.  

Likewise, the second significant predictor of customer satisfaction and relationship commitment is the need for what the authors call “bridging social capital.” By this, they mean consumers' desire to connect with new people who will share different perspectives and offer new thoughts about the products. They want to engage with those outside their immediate circle for additional views.

Respondents next stated that they wanted a pleasurable emotional experience. Ideally, community managers should identify the elements that cause customers to feel positive emotions. This outcome may suggest that eliminating divisiveness from the community is necessary.

Finally, the fourth significant predictor of customer commitment requires a perceived critical mass in the community. No one wants to be involved in an echo chamber, so there needs to be a substantial level of interaction and discussion.

Reviewing these findings, I found them applicable to my online community experience. As a Washington Nationals baseball fan for years, I have participated in a team blog. In the community, I find insights on the team that I cannot get elsewhere. I do not know any of the participants, but I find them very knowledgeable, even if I do not agree with each perspective. Additionally, the blog eliminates those who cannot participate respectfully, making it a pleasurable community. And finally, there is a substantial activity with up to a thousand comments on any given day. These elements combined have made me a more committed and loyal fan, even considering the disappointing losing record for the Nationals in the past seasons.

---

[1] Fei-Fei Chenga, Chin-Shan Wub,*, Yi-Chieh Chena, “Creating Customer Loyalty in Online Brand Communities.”

 

Customers Love ‘Em or Lose ‘Em

A friend of mine, Vinay Kumar, just published a book focused on customer service.  The title is, Customers Love ‘Em or Lose ‘Em.  The book includes 57 tips on how to better serve your customers.  I found it full of helpful reminders and practical suggestions. 

Here is an example of one tip from the book.

“Tip No. 13

Communicate! Communicate!

Don’t keep ‘em guessing. No one likes to be in the dark. When customers don’t know what’s happening, they imagine the worst, causing them anxiety and worry. While this is human nature, you don’t want to be the source of their worries. It won’t serve you. Keep your customers updated on your progress on their assignments and requests. Communicating regularly demonstrates your accountability, conveys your customer satisfaction emphasis, and that you’re dedicated to serving them. Along similar lines, if something isn’t going quiet as planned, customers do understand, provided you inform with them within a reasonable time frame rather than surprising them with bad news at the last minute. Therefore, when you do have to convey some “bad” news, at the same time, be sure to also let them know what you are doing to make it right, get it back on track. Your customers will appreciate it. Finally, when in doubt, it’s better to over communicate then under.”

You can download an inexpensive copy of the book from Scribd.  You may find it helpful to share with your membership staff or customer facing colleagues. 

Belonging: The Power of Membership Marketing

Why is membership such a powerful mechanism to build relationship? Because properly understood, membership can build the platform of common vision, values, and valuables to produce belonging.

This desire to belong is beautifully explained by Simon Sinek in his analysis of an old Dr. Seuss story.

“In his 1961 story about the Sneetches, Dr. Seuss introduced us to two groups of Sneetches, one with stars on their bellies and the other with none. The ones without stars wanted desperately to get stars so they could feel like they fit in. They were willing to go to extreme lengths and pay larger and larger sums of money simply to feel like they were part of a group. But only Sylvester McMonkey McBean, the man whose machine puts ‘stars upon thars,’ profited from the Sneetches’ desire to fit in.

As with so many things, Dr. Suess explained it best. The Sneetches perfectly capture a very basic human need – the need to belong. Our need to belong is not rational, but it is a constant that exists across all people in all cultures. It is a feeling we get when those around us share our values and beliefs. When we feel like we belong we feel connected and we feel safe. As humans we crave the feeling and we seek it out.”1

Do you agree that belonging is a basic human need? Is membership a way to help meet this need?

1. Simon Sinek, Start with Why: How Great Leaders Inspire Everyone to Take Action, Penguin Group, 2009, page 53.

Is Loyalty All that it is Cracked Up to Be?

With the job cutbacks that we see each day in person or in the press, I was intrigued with some comments from Jack and Suzy Welch in a recent column.

They wrote, “These days, it’s far more common for managers to protect and reward employees who consistently deliver results. We’re not saying that loyal employees aren’t given any due. When the economy is strong, a record of loyalty can be enough to ‘give cover’ to an employee with a mediocre performance. But when the going gets tough and staff reductions become necessary, the vast majority of mangers act in the best interests of the company. Their top performers will stay, loyal or not. And the marginal employees – again loyal or not – will be asked to move on.” [1]

As I read this, I could not help but think about membership. Members may stay loyal in the good times, but when economically pressed, members may very well follow the same decision process. They will renew membership with the organization that delivers real value and helps their performance.

[1] Jack and Suzy Welch, The Loyalty Fallacy, Business Week, January 19, 2009.

Membership Satisfaction Compared to Membership Loyalty: A Real Life Example

Many traditional surveys evaluate member satisfaction with an organization. But does satisfaction give a clear picture of what members really feel and want?

We wanted to find out! So in a recent membership survey, we asked both satisfaction and loyalty questions. These questions measure members’ feelings about the organization, their likelihood to renew membership and their willingness to recommend membership to others.

The findings comparing these two techniques were enlightening.

The good news is that we found that membership satisfaction ran at 90.8%.

However, we saw a much more diverse picture using our loyalty questions. Based on these questions we found:

• 57% of members could be categorized as “Advocates”: They express positive relationship feelings toward the organization, indicating an intention to remain a member and a willingness to recommend membership to others.


• 2% of members could be categorized as “Reluctant”: They express positive feelings toward the organization, but are hesitant to commit to future membership or recommending others.


• 18% of members could be categorized as “At Risk”: They express negative feelings toward the organization, but plan to remain a member. This segment often feels trapped in a membership with few or no alternatives.


• 23% of member could be categorized as “Detractors”: They express negative feelings toward the organization, indicating little intention to renew or refer others.

By measuring loyalty instead of satisfaction with this organization, a membership picture comes into focus that lends itself to action. This is especially true as each loyalty category is cross tabulated by job titles, membership tenure, company type, and other key demographics.

Do you have a meaningful measure of membership loyalty for your organization?

Comparing Wireless Phone Customer Churn to Association Membership Retention

Quick Quiz: Who has better retention rates, associations or wireless phone companies?

I got thinking about this the other day when I read a piece in the Washington Post on AT&T. They were highlighting that wireless “customer turnover narrowed to 1.7 percent to from 1.8 percent a year ago.” Sounds pretty good, except that they report turnover for each month. So that 1.7% monthly churn rate turns into an annual loss of 20.4% or a 79.6 percent retention rate. From my limited searching around, these rates are close to other wireless providers.

On the association side, ASAE and the Center report that the median renewal rate for individual membership associations is 87% and 94% for trade associations. [1] So associations win the churn battle. Good job!

What did you guess? What went into your thinking?

Having associations come out on top was a pleasant surprise for me. You would think that AT&T has some clear advantages to associations that might help them retain customers at a better rate. They have long term contracts with big cancellation fees, a monthly billing routine, and an opt-out instead an opt-in renewal system. Plus, they have the hot new iPhone.

If you are interested in looking at this comparison more deeply, take a look at the MSN article on a Virginia wireless company, NTELOS. At the end of the article it shows their SEC 10-K report on their wireless subscriber acquisition and renewal. It is remarkably similar to the dashboard report that I recommend to associations to keep track of membership growth and renewals. You can see the post for this on this July 9th.

[1] 2006 American Society of Association Executives (ASAE, Policies and Procedures in Association Management: A Benchmarking Guide, vol. 1 Membership P. 36.

Tangible Benefits Matter

We just completed a survey evaluating the effectiveness of a recently launched printed, membership periodical. The good news is that the members very much like the new benefit.

But what was most impressive about the survey results was how the publication increased member loyalty. For those who received and read the new publication, we found that they were:

• 33.9% more likely to say, “I would recommend this association to colleagues and friends.”


• 15.4 % more likely to say,” I plan to continue my membership.”

Admittedly, we may have a bit of a chicken and egg situation here. More committed members may be more likely to read association publications.

But this data is corroborated by ASAE & The Center’s Decision to Join survey returns.

When asked the question “How do you prefer to receive information about your profession or field?” the option of receiving “magazines and journals” was the choice surpassing conferences and meetings, E-newsletters, and an association web site.

The data from these two surveys serves as a reminder that part of member’s decision to join may be altruistic, but providing tangible product in return for dollars spent is still a key ingredient to getting and keeping members.

What do you think?

Early Returns on Dues Increase Survey

In my post on August 9th, I shared that we were doing a survey to get feedback on how associations handle a dues increase. We sent out about 12,000 surveys and returns are coming in at a pretty good clip.

I spent some time this morning going through the open ended responses to our question: “In your own words, what lessons have you learned and what would you do differently next time an association you work for raises dues?”

There are some varied responses ranging from don’t raise dues at all and grow revenue in other ways to communicate the need for a dues increase frequently.

I would value your feedback on the initial survey comments that have been submitted.

Here are some representative responses.

“A dues increase should always be a last resort. I think the winner in business is the one that finds the way to give the customer/member the most for the dollar.”

“Always make small increases rather than large ones made less frequently. Nothing slows or stops renewals like a shocking increase.”

“Say it more than once, more than twice and more than three times . . . eight months later, we still have members saying, ‘we didn’t know’”.

"Our primary members’ dues increased at 30 percent. . . I would do a smaller increase more often rather than a large increase at once.”

“Never raise dues unless you have added value associated with it.”

“We learned to raise dues every year – even if that raise is only 1 percent. Our costs go up every year (salaries for staff, insurance, rents, utilities, etc.) Raising dues each year is a given, it’s just a question of how much.”

“Raising dues modestly, with ample notice and explanation does NOT impact membership.”

"The larger the dues increase the more detailed the explanation has to be. Small incremental increases don’t require much if any, explanation.”

“The less you make of it, the less of an issue it will be for members as well.”

“You can never start too early to educate [members] of the need for an increase and you can never communicate enough for the need."

There is one comment that I personally really like. Guess which one it is?