Henry Ford famously said, “The customer pays the wages.” Translation: customers’ experiences ultimately determine whether or not a company stays in business. What Ford didn’t have any clever quips about was how to systematically quantify and improve the customer experience. Which customer feedback metrics should companies track to boost profits? Customer loyalty is one quality business leaders have long valued, as it is much more costly to attract new customers than it is to retain current customers. The importance of customer satisfaction was a hot business topic in the 1980s, as customer satisfaction was considered the best window into loyalty. In the late ‘80s, however, researchers questioned whether customer satisfaction actually impacts overall performance. They found that the link between customer satisfaction and higher profits, ROI, or share of market is dubious. What, then, should businesses follow to determine and improve customer loyalty? Is there a quantifiable link between the customer experience and business outcomes? PeopleMetrics research shows that Customer Engagement is the best metric to follow, as it incorporates customer loyalty and drives crucial business outcomes.
Posts Tagged ‘Loyalty business model’
The Importance of Customer Satisfaction and Customer Engagement in Business Outcomes
Thursday, September 16th, 2010Reward Programs: Are they Effective for Creating Engaged Customers?
Monday, August 31st, 2009Most Americans are members of at least one loyalty program, if not several. Whether they carry around a R.E.I. dividend, a key chain tab for their grocery store, or a card for their airline, Americans love to get a little something extra for their patronage—and loyalty programs claim to give it to them. The American love for loyalty programs is strong, even in the recession. As loyalty research firm COLLOQUY’s Rick Ferguson put it, “Despite the recession, more consumers across all demographic segments are participating in rewards programs than ever before.” In fact, COLLOQUY found a 25% increase in American loyalty program memberships since 2006. So, reward programs are popular, but are they effective from a business perspective?
Why All The Telecom Customer Service Problems?
Friday, July 24th, 2009
How many times a day do you use your cell phone, land line, internet connection, and/or cable television? If you’re like me, your answer shows just how much you rely on your telecom provider(s). And yet, most people don’t feel warm and fuzzy when they think of their cell phone or internet company. When compared to other industries, telecom suffers from lower customer engagement scores, higher incidence of customer problems, and slower problem recovery (data available in the PeopleMetrics 2009 Most Engaged Customers Report).