Impact Learning Systems


What Drives Customer Loyalty? Peggy Carlaw

I was speak­ing with a col­league at work last week about the Har­vard Busi­ness Review arti­cle on cus­tomer effort and its effect on cus­tomer loy­alty. She had recently writ­ten a post about the arti­cle and we were dis­cussing what we thought drove loy­alty. Lots of research has been done, but the results are incon­clu­sive. Some research shows that there’s a direct cor­re­la­tion between cus­tomer ser­vice or cus­tomer sat­is­fac­tion and cus­tomer loy­alty; oth­ers don’t. My guess is that the dif­fer­ences are dri­ven by the way ques­tions are asked in the sat­is­fac­tion survey.

My col­league, Mon­ica, was mus­ing that per­haps we’re just less loyal than pre­vi­ous gen­er­a­tions. Her father drove a Ford…forever. My folks favored Mer­cury. I was a Volvo girl until the Prius came along. Since I believe that peo­ple buy based on emo­tion and back­fill with logic, it makes sense that loy­alty may be dri­ven in part by demo­graph­ics and psy­cho­graph­ics in addi­tion to cus­tomer sat­is­fac­tion, cus­tomer effort, etc.

I’ve been exam­in­ing my own loy­alty ever since that arti­cle came out in the Har­vard Busi­ness Review. What I can report is that while I love my Fit­Bit to death and am cur­rently extremely loyal, I would bail in a heart­beat if bet­ter tech­nol­ogy came along (read I see myself as an early adopter of tech­nol­ogy). I love my Prius but with my next car pur­chase could be talked into some­thing even more energy effi­cient (read save the planet and don’t for­get the cool fac­tor). Yes, cus­tomer effort plays a part in keep­ing me loyal, but only until some­thing that fits my val­ues and emo­tions bet­ter come along. Then I’m will­ing to travel into uncharted waters and risk poor ser­vice. So loyal? Yes, for awhile.

Think about your own loy­alty. What com­pa­nies do you con­sider your­self loyal to? What would cause you to move to another com­pany? Just how “loyal” are you? Does it have to do with what type of ser­vice you receive from the com­pany? The prod­uct? Your val­ues and emo­tions? I’d be inter­ested in your thoughts.

Peggy Car­law is the founder of Impact Learn­ing Sys­tems, a lead­ing train­ing com­pany spe­cial­iz­ing in improv­ing com­mu­ni­ca­tions between front-line employ­ees and cus­tomers. Peggy is co-author of sev­eral books pub­lished by McGraw-Hill, includ­ing Man­ag­ing and Moti­vat­ing Con­tact Cen­ter Employ­ees and The Big Book of Cus­tomer Ser­vice Train­ing Games.
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Peggy Carlaw
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  • http://newblogger jroselle

    Prod­uct loy­al­ity can be much dif­fer­ent than stan­dard cus­tomer loy­al­ity. If your cus­tomer sees a prod­uct he/she thinks is supe­rior to yours in what­ever cri­te­ria, and you can't match the fea­tures, you lose. Don't get me wrong though. You won't always lose them per­ma­nently. They may try the com­pe­ti­tion and find some­thing they don't like and come right back to you. You can run all the sur­veys you want from now until dooms­day and you will never learn all the rea­sons for los­ing sales. When you can read people's minds, then you will know. But even then, minds can change. It is truly unbe­liev­able some­times what can turn peo­ple against you. Remem­ber this: your best shot at reten­tion is treat­ing peo­ple with great empa­thy and respect and the atti­tude of want­ing to help them. Next to a per­sons name, the most pow­er­ful phrase in the eng­lish lan­guage, is: I Can Help.

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