"Happiness" Doesn't Predict Loyalty

Customer satisfaction, while important, is not the most-important measure of customer loyalty. In fact, even customers who say they are satisfied are not necessarily "loyal." The converse also now appears to be true. Even "dissatisfied" customers are not "disloyal."

Verizon, for example, gets higher satisfaction ratings than AT&T. But when asked whether they plan to switch providers, Verzon has just a one point lead over AT&T in the loyalty area. Changewave analysts think the Apple iPhone is the reason.

Verizon, the perennial leader in customer satisfaction among cellular service providers, earned a 42 percent "very satisfied" rating in ChangeWave's latest cell phone survey.

Tied for second were AT&T and T-Mobile, each with a 28 percent "very satisfied" rating. As a result, you might conclude, Verizon customers should less likely to defect to another provider. And, to be sure, only 10 percent of its current customers reported they plan to switch to another cellular provider.

But although saying they are less satisfied, AT&T customers who say they plan to switch carrier is just 11 percent. More surprising is the finding that 28 percent of users plan to switch to AT&T over the next 90 days, compared to the 22 percent who plan to switch to Verizon.

Presumably a new customer cannot yet have formed an opinion about the quality of a service. BSo the "switch to" data probably does not provide much indication of user expectations about the quality of service.

The switch indications would fit nicely, though, with an argument that a specific device is pulling new users into wanting a relationship with a carrier.

The Apple iPhone, which looks set to capture more than a third of smart phone sales during the next 90 days, is the answer. Customers are fanatically loyal to the device.

All of which ought to suggest a couple of really important implications. Measuring and creating "customer happiness" does not provide protection against churn. Even happy customers in the wireless and other areas show a marked willingness to churn.

The other thing is the clearly-growing importance of devices as the "thing" determining loyalty and churn resistance. People don't care about their "service providers." They care lots more about their devices.