Customer Retention vs. Customer Loyalty

As a demand generation company, we frequently work with marketers on building lead nurturing programs and creating effective content to shorten their sales cycle.  Companies spend millions a year on lead generation, advertising, brand awareness and lead nurturing campaigns.  While the need to focus on lead generation and closing new business is obvious, customer retention and customer loyalty programs are equally as important to an organization’s growth and overlooked or done poorly by many b-to-b companies. Many organizations make the mistake of lumping customer retention and customer loyalty together and making them a function of the marketing department.  However, In Sirius Decision’s most recent blog post,Megan Heuer points out that customer retention and customer loyalty are two different things, and loyalty cannot be a marketing program because it involves the customer’s feelings toward the brand.  It raises the question, if a customer is retained, does loyalty really matter?   As she points out in her post, for marketers, customer loyalty absolutely matters.

Customer loyalty is about more than just maintaining a customer.  It’s also about a customer being willing to champion an organization’s cause, provide them with useful feedback and refer/recommend them to others.  Marketers need loyal customers for lead generation campaigns as they depend on them for web content, speaking engagements, references and case studies.

So while the marketing department is typically responsible for customer retention, customer loyalty rests on the organization’s performance, customer service and quality as a whole.  Marketers need to help CEOs and board members understand that customer loyalty and customer retention are not one in the same, and without loyal customers, lead generation efforts are stifled.

What is your organization doing to foster not only customer retention, but customer loyalty?