Customer Service Attracts Loyal Customers
September 8, 2009 10 Comments
In a new research report called Service Seekers Are More Loyal Than Price Seekers (based on a survey of about 4,600 US consumers), we analyze the loyalty of four consumer segments that I’ve previously discussed in this blog:
Source: Forrester Research
The report examines the loyalty of these segments across 12 industries: airlines, banks, wireless providers, credit card providers, hotels, insurance firms, Internet service providers, investment firms, health plans, PC manufacturers, retailers, and TV service providers. Across all industries and consumer segments, I analyzed three areas of loyalty: willingness to buy more products, reluctance to switch from current providers, and likelihood to recommend providers to friends and colleagues.
Here are some of the interesting findings from the analysis:
- Across all 12 industries and all 3 measures of loyalty, Service Seekers are more loyal than Price Seekers
- In all 12 industries, the most loyal segment is either Service Seekers or Price & Service Seekers.
- In 10 of the 12 industries, Service Seekers are the most reluctant to switch away from their current provider.
- The gap between loyal Service Seekers and loyal Price Seekers is at least 20% in the following areas:
- Willingness to buy: Credit card providers, TV service providers, Internet service providers, airlines, and insurance providers
- Reluctance to switch: Airlines, TV service providers, insurance providers, and hotels.
- Likelihood to recommend: TV service providers, credit card providers, medical insurers, Internet service providers, and insurance providers.
- The gap between loyal Service Seekers and loyal Price Seekers is lower than 10% in only the following areas:
- Willingness to buy: Banks, investment firms, and retailers.
- Likelihood to recommend: Retailers, banks, and PC manufacturers.
The bottom line: Good customer service attracts more loyal customers.
About Bruce Temkin
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Customer service plays an important role in an organization’s ability to generate revenues, and as such, customer service should be a fundamental part of any company’s “valued customer” approach. In fact, there’s an enormous body of research, which strongly indicates that customer satisfaction and loyalty; are major contributors to profitability.
Thank you for sharing your knowledge and insight.
Best wishes.
Fascinating stuff Bruce – I think this provides even more evidence that companies need to be finding out from their customers why they have chosen them and /or are considering them.
Knowing what your customers’ priorities are helps focus your efforts and resources accordingly. Sadly, too many buinsesses never ask.
A simple question I like is ‘why do you buy from us?’
Bruce (and anybody else!), have you got any better ones?
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Interesting read. I’ll make sure to read the full report.
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Best customer service implies practices that bring in and keep clients. . It affects important brand and business objectives like customer satisfaction, loyalty and etc. I am definitely agreed that it is the key to attracting and maintaining customers, which leads to increased business and revenue.
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