Customer Loyalty - From the Customer's Perspective
by Joan Donogh

Businesses may not define loyalty in the same way that their customers do. A recent survey, Consumer Eyes 2000©, conducted by Acumen Research Group, Inc. and TrendSeek Int'l. goes to the source, interviewing 1000 Canadian consumers for their views on loyalty. The survey was based on personal interviews in malls across the country, with banking, telecom and retail customers. 

Loyalty Does Not Mean Exclusivity
Customer loyalty has typically been defined and measured by repeat business and recommendation of the store to others. While customers agreed with these behaviours, 60% of customers who named a business they were loyal to, said they would also shop at the competition. 

Attracting and Retaining Customers 
Consumers were asked to rate the importance of 22 attributes in maintaining their loyalty. These attributes were further defined as Core Services and Trust Builders

Core Services - were found to be most important in attracting a customer to the business in the first place. Customer satisfaction with the fundamentals of the business, through their first transaction, is key to generating a repeat visit. Ranking highest in importance among the Core Services are: 
 

  • Favorable return policy 
  • Selection and choice of merchandise


Ranking lowest among the core services are Rewards programs and Promotions. This is one interesting variance between retailer and customer perceptions of loyalty. A majority of retailers cite loyalty programs as a priority in their marketing strategy for loyalty building, while it is ranked lowest among customers as a factor that will win their loyalty. Likewise, promotions and price, also key retail tactics, are not essential for loyalty. Shoppers are more price flexible than retailers believe. 

Trust Builders - while you are meeting their basic needs, at a less conscious level, customers are building trust in their relationship with you. These are the factors that keep them coming back to your business over time. Ranking highest in importance among the Trust Builders are: 
 

  • Good staff attitude 
  • Accurate product information 
  • Delivering on advertising promises


Ranking lowest are Knowing the people and Being recognized. These results show that the customers do not expect to be recognized and greeted by name. They do expect to be given good and accurate information and help in selecting the products or services they require. 

Consistency is Essential
When asked why they trusted one company over another, 31% of the customers said Consistency in meeting their expectations. Whether it is their expectation for service, price, product selection and choice, once the expectation has been established, it must be upheld on a consistent basis in order to keep the customer's trust. 

Why Customers Leave
Customers were asked why they stopped doing business with a company. The responses were overwhelmingly related to not meeting their expectations in the Trust Builder attributes. Key reasons for leaving are: 
 

  • Undesirable staff attitude 
  • Not making the customer feel valued 
  • Dishonesty or lack of integrity


Once a relationship has been established, minor shortcomings in the Core Services (e.g. not having a size in stock) will rarely cause desertion. If the business has earned the customer's trust they will usually give the business a chance to rectify the issue. However, a break in trust, even a minor one, will cause the customer to leave. 

Store Staff - The Front Line 
Store staff are the direct link to the customer. How the customer is treated by the store staff will determine the retailer's future relationship with the customer. Customers were asked how they rated store staff on loyalty driver attributes. Highest performance ratings were given for: 
 

  • Honesty 
  • Helpfulness 
  • Cheerfulness


Ranking lowest are Availability of staff when needed, Staff knowledge, and Caring attitude. This uncovers another important gap between what customers expect and what retailers are delivering. Honesty, helpfulness and cheerfulness are certainly important to developing the customer relationship. However, the attributes which rate lowest here, in store execution, are those rated highest in importance in order to earn the customer's loyalty. 

Acumen Research Group, Inc. is a consumer behavioural research company in London, Ontario. They have created a new measurement tool, the Consumer Loyalty Index©, as a result of their research findings through the Consumer Eyes 2000© study. For more information, visit their website at http://www.acumenresearch.com , or contact consumereyes@acumenresearch.com . TrendSeek Int'l. is a Toronto based consulting firm.


Joan Donogh is the President of In-Formation Design and has extensive experience in marketing communications and the design and development of customer relationship management and loyalty programs. Contact Joan by e-mail: joan@donogh.com and visit www.donogh.com .

Many more articles in Customer Relationship Management in The CEO Refresher Archives

   


Copyright 2000 by Joan Donogh. All rights reserved.

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