We measure Customer Loyalty because ‘loyal’ customers will drive revenue growth and profitability for any business. Loyal customers are defined as people who:
- Are satisfied with the purchase experience.
- Repurchase your products and services.
- Promote you to Colleagues and Associates.
- Give valuable feedback that allows your business to remain relevant.
Happy customers rarely tell their supplier of their experience and tend to only tell one or two people about a positive experience. But on average, a disappointed person will complain about their poor experience to a dozen people. That is the simple and clearest reason why it is important to engage customers and find out what is on their mind.
Customer loyalty goes beyond just satisfaction. Loyalty reflects the person’s willingness to recommend the supplier to friends and family. From a business perspective, studies show that the cost of sales resulting from referral is a mere fraction compared to sales that come from advertising, marketing, and direct selling efforts.
It turns out that customer loyalty can be measured, represented as an index or score and tracked over time through the Client Insight process. It makes sense to do so when you are committed to improving and want to track your performance.
By interviewing and tracking how this index changes, you will see the impact of decisions, changes and improvements to the products, services and processes that you have implemented.
For additional information, we refer you to the writings of Fred Reichheld who was an early investigator into the nature of Customer Loyalty and published the following:
- The Ultimate Question – Driving Good Profits and True Growth, 2006
- The Ultimate Question 2 – How Net Promoter Companies Thrive in a Customer Driven World, 2011
To learn how you can make this tool work for your company, contact us for a no-obligation chat.