ACHRNEWS

Strengthen Customer Loyalty With Market Research

November 24, 2004
Chris Tatham (left) and Bob Cicerone.
Customer loyalty is in jeopardy every time a prospect or customer comes into contact with a company. Each contact, or "moment of truth," is an opportunity to strengthen - or weaken - customer loyalty. Loyalty to a company is the result of a customer's total experience with these moments of truth.

Prospects and customers contact a company at three levels:

1. The core product or service provided by the company. Examples include furnaces, thermostats, repair service, and maintenance service.

2. Policies, procedures, non-core business functions, and properties. Examples include credit policy, ordering procedure, returned goods policy and procedure, invoice content and format, Web site, voice message system, and vehicles.

3. Personnel who have direct contact with customers and prospects in face-to-face meetings or by telephone, e-mail, and letter. Examples include the technician, switchboard operator, customer service rep, accounts receivable clerk, and sales rep.

Customer loyalty is strengthened or weakened by a customer's experiences at each of these levels. To expand its customer base, a company must meet or exceed the constantly evolving expectations of its market(s) more consistently than its competitors at every point where it is possible for a customer to come into contact with the company.

To ensure that customers consistently have experiences that help make them loyal, managers require timely and complete information about customers' reactions to a company's core products or services, procedures, policies, non-core business functions, properties, and personnel.

For example, market research should provide the following information about a company's core products or services:

  • The features or benefits prospects and customers expect.

  • Features that are important enough to prospects and customers to influence their choice of a supplier.

  • Customer satisfaction/dissatisfaction with the product or service - and the reasons.

  • Customers' suggestions to improve the core products or services.

  • Probable supplier selection for future purchases (i.e., future loyalty).

    Market research should also tell managers which features of their company's policies, procedures, non-core business functions, and properties are important enough to prospects and customers to influence their choice of a supplier, as well as customers' satisfaction with their experiences at these moments of truth.

    Finally, market research should tell managers how prospects and customers expect to be treated by the company's personnel and customers' level of satisfaction/dissatisfaction with their treatment by the company's employees.

    By using this information to make appropriate changes within the company, every point of contact can be kept closely aligned with the expectations of prospects and customers. However, experience shows that a typical company's market research does not provide all the critical information that is required to consistently meet or exceed the market's expectations.

    Ten Steps To Keep Your Market Research On Track

    The following 10 steps ensure that your company's market research provides all the key information needed to keep the moments of truth aligned with the expectations of your prospects and customers.

    1. List the features of your company's core products or services that might be important enough to your prospects and customers to influence their choice of a supplier.

    Examples: Operating cost, durability, accuracy of diagnosing causes of equipment failure, timely availability of repair service.

    2. List those procedures, policies, and non-core business functions of your company that prospects and customers experience and that might be important enough to influence their choice of a supplier.

    Examples: Complaint resolution procedure, returned goods policy, advertising.

    3. List those features of your properties that prospects and customers experience.

    Examples: Facility location and appearance, telephone message when on hold, ease of getting information from your Web site, appearance of vehicles, appearance of uniforms.

    4. List the job titles in your company that have the most frequent direct contact with your prospects and customers.

    Examples: Technician, switchboard operator, accounts receivable clerk, sales rep.

    5. For each part of your company that you listed in Steps 1-4, determine whether your company has current market research (less than three years old) showing in specific detail what prospects and customers expect from this part of your company.

    6. For each part of your company that you listed in Steps 1-4, determine whether your company has current market research showing how satisfied customers are with this part of the company and the specific reasons for their satisfaction or dissatisfaction.

    7. For each type of information shown missing by Steps 5 or 6, determine how the missing information hurts your company's efforts to:

  • Attract and hold new customers.

  • Keep existing customers and increase the value of their purchases.

  • Expand its base of customers.

    8. Review your answers to Step 7; decide if the consequences you listed jeopardize customer loyalty.

    9. If the loyalty of your customers is threatened, revise your market research so it provides the missing information uncovered by Steps 1-6.

    10. Repeat Steps 1-9 at least annually to ensure that your market research supports the effort to meet and exceed customer expectations.

    These 10 steps help to strengthen a company's efforts to develop a constantly growing base of satisfied, loyal customers. Other benefits include increased sales, improved cash flow, reduced cost of selling to lost or at risk accounts, and less time spent reacting to fires created by upset customers.

    Bob Cicerone is director of customer loyalty services and Chris Tatham is chief operating officer of ETC Institute in Olathe, Kan. The firm's market research services provide information that helps organizations make better decisions. For the past 15 years, Cicerone has specialized in providing business leaders with tools that enable them to better measure and manage customer loyalty. Tatham has designed and implemented community-based research initiatives for over 100 government agencies in more than 30 states. Cicerone and Tatham can be reached at 913-829-1215 or by e-mail at rcicerone@etcinstitute.com or ctatham@etcinstitute.com. Or visit the firm's Web site at www.etcinstitute.com.

    Publication date: 11/29/2004