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Connections Keeping you informed |
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Issue 1 : Sept, 2006 Better Corporate Health Through Effective Smoking Programmes: > Improving Customer Satisfaction, Retention, Loyalty and Sales > Introducing Company Performance Targets
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Customer Satisfaction, Retention And Loyalty
Customers create value through their future purchase intentions. The solution to develop value is relatively easy - by creating processes and a company culture that enables employees to concentrate on acting in the customers' best interests. This means that each challenge starts with "Now what does the customer want in this situation, what is best for him or her?" The bean counters will of course take the short-term view of asking what it is costing. However, really great organisations see past the barriers and empower employees to solve problems and act in the customers' interest - they recognise the long-term goal of creating long-term customer value. From a recent 2Europe survey it is evident that if the customer thinks recommendations are based on what they need rather than what you have to sell, then you develop trust and they will want to do more business with your company. Organisations are now beginning to realise the importance of Trust as an attribute and that earning the customers trust places them high on customers agenda.
The Challenge Existing customers are essential to any organisation’s business development initiatives, particularly when you consider that it costs several times more to acquire new customers than to retain existing ones. Today, customers take it for granted that their suppliers have excellent products & services with reliable service & support. To gain customer loyalty, we have to go beyond this as customers are looking for additional drivers to give them a reason to continue dealing with a supplier. The Solution 2Europe runs satisfaction and loyalty programmes for its clients across 20 countries and over the last decade has specialised in all aspects of loyalty research. Our aim is to provide knowledge and answers to resolve customer satisfaction and loyalty challenges. This enables clients to develop profitable strategies to improve customer loyalty and increase customer return on investment.
“The independent specialist” MANAGEMENT TODAY Successful organisations monitor their customers’ attitudes towards and perceptions of the products & services they deliver, benchmarking their performance against the competition to ensure they have no weaknesses. The information they gain proves a valuable competitive tool to guide operational improvements; recognise and leverage strategic advantages; anticipate customer requirements & potential issues and identify potential weaknesses.
The next level derives a Relative Customer Satisfaction Index for each company function or process (compared to the competition).
Customer Value Customers often provide high satisfaction scores but still buy products and services from competitors if they consider they will gain additional value. A high customer satisfaction score on its own is therefore no indicator of customer loyalty.
Customer Loyalty It is more critical than ever for companies to focus on loyalty as well as satisfaction. Loyalty means continued business and this drives revenue. Keeping customers loyal, relying on them to refer your business to their friends and colleagues is good business. Customer loyalty is evaluated in terms of propensity to continue with the current supplier and attitude towards recommending.
Influence of Brands on Customer Loyalty Customers make decisions on numerous dimensions and even after we have gained customer satisfaction at a physical level there are buying behaviours that appear more emotive than rational. In this instance we turn to the brand. A powerful influencing factor in purchasing habits is the subtle, often-overlooked brand, which has a "relationship" with loyal users not unlike a healthy relationship between two people. To build a strong brand relationship, you must first understand the core values of your target market. In marketing, we often talk about this as "laddering up to emotional end benefits." These are the unspoken customer values that are the glue to brand loyalty because they validate the user's self-perceptions. We also need to know where the competition is in this emotional terrain. Segmenting Customers By Loyalty Customers are individuals and ideally need to be treated as individuals however, if a company has hundreds or many thousands of customers then individual attention proves a significant challenge. An alternative approach is to segment the market by monitoring Satisfaction versus Loyalty, and to then serve each segment according to its needs. The four basic segments are: Loyalists Defectors Hostages Mercenaries
Finally, targets can be established to drive a company forward. These are divided into two categories of service and sales & marketing and with targets for each hierarchical level in the company. As we pass down the organisation the number of activity targets and the level of detail increases. Targets are based on the critical performance factors that drive customer loyalty and which have been identified from the survey programme. The targets often form the basis of bonus schemes.
The Connection Challenge....  Put us to the test...... If you'd like more information about how 2Europe can help your organisation or If you have a specific research challenge that you'd like some advice about, contact us today for a no obligation initial discussion. Call: 01442 831711 or email: dbacon@2europe.co.uk Or submit your enquiry online >> Contact InformationHave a comment or question about the newsletter? Or perhaps you're doing interesting things with researching your marketplace and would like to be considered for a customer profile in an upcoming newsletter. Please contact: editor@2europe.co.uk- David Bacon, Editor Copyright © 2006 2Europe. All Rights Reserved.
Wayside | Upper Bourne End Lane | Hemel Hempstead | HP1 2RR T: 01442 831711 | E: dbacon@2europe.co.uk |
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Existing customers are essential to any organisation's business development initiatives, particularly when you consider that it costs several times more to acquire new customers than to retain existing ones. 
Customer satisfaction sets the balance between customer priorities, company and competitor performance. Our process presents information at 3 levels. At the top strategic level we have a ‘customer satisfaction index’ for a company, which guides change in those directions, which improve customer satisfaction.
The final operational level then evaluates customer priorities and both company & competitor performance, for each of the key activities within customer facing functions or processes. The management grids identify the action required for each activity.
The customer value model considers a price/quality or performance trade off for each competitive brand (or sector of your company).
