Customer satisfaction is dead. Oh, there are a bunch of huge companies that haven’t figured it out yet. And there are a bunch of hotels and airlines that haven’t figured it out yet. And some (OK, most) will never figure it out.

There are even organizations that give out “Customer Satisfaction” awards. And the companies that win the “satisfaction awards” – especially the WORST SERVICE PROVIDERS IN THE UNIVERSE (like airlines and automobile manufacturers) – brag to everyone. They take out full-page ads. They put up banners in public places as though it will change the mind of a public that already knows the score.

Another word for satisfaction is: mediocre. How would you like to win an award for mediocrity? “We are the highest-rated mediocre company in the universe!” What a joke.

TRUTH: Any company that posts a “satisfaction” award has an army of people who hate it for the lousy service it provides AND a bigger army of people laughing at the audacity and the phoniness of the banner.

Satisfaction is the LOWEST level of acceptable service. And in the end, it means nothing. Companies such as America Online measure “satisfaction” while they lose thousands of customers a DAY because of lousy service and apathy.

THE FACT IS: Customer LOYALTY is all that matters.

I define loyal customers as people who will do business with you again, tell others about you and refer others to do business with you.

Most large companies spend all their time worrying about “shareholder value” and do nothing about its source: customer loyalty.

THE REALITY: To GET loyalty, you first have to GIVE loyalty. Loyalty starts with a corporate philosophy. One that is created and written by the owner or the CEO – NOT the marketing department, human resources people or an advertising agency.

The CEO has a vision beyond self-service. His or her vision of the company is the one mission that must be carried out. How can anyone march to a philosophy or a vision that’s not created by the creator?

Consider the vision of Hugh McColl, arguably the greatest banker of all time, founder of North Carolina National Bank, which ultimately became Bank of America. His philosophy was simple: “I take care of my people, my people take care of my customers, my customers take care of my shareholders.”

Here’s what you can do:

Loyalty starts at home. Loyalty to employees – taking care of employees is the No. 1 job of any business owner or CEO. Happy people, respected people, cared-for people and empowered people are more likely to transfer those feelings to customers. And vice versa.

Take loyal actions. Loyalty to customers stems from the actions that are taken and the words that are spoken from employees. It’s not just “business as usual” – it’s going the extra mile and taking a proactive approach to communication.

Earn loyalty and you’ll get it. Loyalty from customers is a result that occurs when all the other elements of your business have been mastered.

Make loyalty the imperative. From the CEO to the person who answers the phone. Make loyalty the corporate language. BUT there has to be total senior-level support.

Start with attitude. You can’t teach loyalty, but you can teach and instill a positive attitude among all the people in your company.

Measuring satisfaction? Waste of time, waste of money, waste of customer interaction.

Measure loyalty? Easy. Count the number of repeat customers. Count referred customers. Count sales. Count profits. The rest is bogus.

If you want my formula for loyalty, go to www.gitomer.com, register if you’re a first-time visitor, and enter LOYALTY FORMULA in the GitBit box

Jeffrey Gitomer can be reached by  phone at (704) 333-1112 or by  e-mail at salesman@gitomer.com.  © 2007 Jeffrey H. Gitomer