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Category: Listening to Customers

How do you build customer loyalty in tough economic times?

Listening to the customer becomes even more crucial in economic downturns. It is the company that continues to meet customer needs by creating customer value, even if it means cutting into profits, that will come back quickly once economic conditions improve. 

Some of this is seen by watching current tv advertisements. Take for example, LensCrafters, an eyeglass company, who is currently advertising free lenses for children 17 years and under – www.lenscrafters.com. They have reached out to parents at a time before the new school year starts, recognizing that when there is a diminished household budget, children will be a high priority. By drawing the family into the store, they are also building household loyalty, not just that of a single customer. In many households there are multiple members who need corrective vision.

Another example is Sears’ protection plan when purchasing appliances, should the consumer lose their job – www.sears.com. Again this program is designed to attract and retain customers.

In both of these examples, the companies are striving to create customer value, which in turn has been shown to result in increased customer loyalty.

Pamela Toft
Vice President
Walker Information  

How does Job Loss data help us ‘Listen’ better to the Consumer?


Sometimes building customer loyalty is interrupted by external factors, such as the recent economic downturn that has resulted in job loss. In attempting to interpret what is going on with consumers it is helpful to look at job loss statistics by both gender and age groups. If there has been some decline in consumer spending, is it because the targeted consumer falls into a gender or age bracket that has been more impacted by the economic slowdown? This type of data is difficult to get from customer survey research.

Analyzing the loss in employment statistics available on www.bls.gov from March 2008 to March 2009 there are 3 findings that help our understanding of what could be going on with consumer spending, as well as where retailers may need to refine their current customer segmentation approaches. 

1.       The only age group where that has been a net gain in employment is the 55+ category.
 

2.        Males have been more impacted by job loss than Females. As seen in the adjacent pie chart, almost three-quarters of the job loss among age groups 18-54 have been among Males.

 

3.  As illustrated on the bar graph below, for both Males and Females the age group most impacted by job loss are 35-44 year-olds. However, whereas for Males this group represents 34% of those who have lost their job in the past year, it jumps to 55% for Females.

 Pamela Toft, Ph.D.
Vice President Client Services

How many ways are we listening?

Due to some situations I have encountered in the last couple of weeks, I am reminded of the need to make it possible for all customers to be able to provide feedback through some type of mechanism.  In our formal research studies, we spend a lot of time talking about who should, and should not, be included.  The conversation usually centers around limiting our feedback and improvement dollars to the “best” customers, and only inviting that group to the survey.   But what about the other guys, that also have useful feedback that could help us improve. 

As an example … On spring break I stayed at a lovely beach hotel.  It was a great place, large rooms, wonderful pool/beach setting.  However, there were several broken items in the room.  They were not large enough to call the desk during my stay, but they were small irritants that should be fixed.  Yet, there was not an obvious way for me to let the hotel know about those items.   And in my haste to check out I neglected to mention the items, and they did not ask.  I am probably not on that hotel’s A-list to be catered to, but it would be helpful to the hotel, and the next guest, to get those items noted and repaired before a long stream of customers have the same annoyance I did.

This serves as a reminder that our customer feedback programs should provide a way for any customer to provide feedback so we can continue to improve our products and services.  Do we have a way to get meaningful feedback from our best customers?  Do we have an approach to hear about complaints from any customer?  Do we have a way to monitor our daily transactions that touch hundreds/thousands of customers daily?  Is it clear how any customer can communicate with the company? 

While a broken lamp switch is a small thing, if it goes unfixed and multiple hotel guests have the same irritation I did, it it becomes a bigger and bigger issue.  If only the hotel had a repair list on the counter that I could have filled out for them …

Chris Sego
Vice President

What can you learn from a lost customer?

Talking to lost customers is a little bit like talking to an elderly relative – they have such meaningful stories to tell that you often wish you would have started really listening to them a lot sooner.

I’ve helped several companies with their journey to understand why their customers love them (their loyalty studies) and why they leave them (their lost customer studies).  In this entry, I want to explore the unique learnings you can only get from talking to those customers that you’ve loved… and lost.

A framework for talking to lost customers often looks like this: 

Lost Customer Framework
1. Understand why they left – in their own words. 
 
2. Understand the full span of their reasons for leaving, often using a pre-populated list. 

3. Identify their main reason for leaving.

4. Dig into as much detail as possible about their main reason for leaving.

5. Gather insights on prevention or remedy steps, essentially: what could we offer to get you back?

Results from a lost customer study are almost guaranteed to be intriguing.  They come pre-packaged with an automatic and clear business impact.   Lost customer data inherently contains very specific reasons for lost revenue, and naturally translates into forecasting models for revenue that could be saved if the right steps are taken.

Of course, you can expect to hear a certain amount of justification around price or the other usual suspects.  But there will also be great stories that would otherwise be left untold; stories of lost customers who had mostly positive interactions with your company, and are willing to come back, if it weren’t for that one nagging barrier.  Find out what barriers you’re been putting up for lost customers.  And as an added bonus, I bet you’ll find a few of the believed-to-be-barriers are already outdated, or were even misguided in the first place.

In my next post, we’ll explore related insights on this same topic, including segmentation and competitive intelligence. 

Krista Roseberry
 

Using Unemployment Statistics to Understand Declining Sales

Building customer loyalty can be interrupted by the economic climate. Savvy business consulting firms look to many different ‘listening posts’ to provide information to better understand the environmental aspects affecting  customers. For example, recently when looking at a retail situation where males had been the dominant purchaser, it was helpful to review labor statistics at www.bls.gov  to help explain what might be going on with declining sales.
 

Not only is the percentage of male unemployment higher than that of females, the unemployment rate for males is increasing faster than that of females. In the past year, approximately two-thirds of those who became unemployed are males, whereas males represent around 53% of those currently employed.
 

Labor statistics can also be used to understand how various markets have been affected by unemployment. This includes providing insights to assist with interpretation of same-year sales, resource allocation going forward, as well as refining the overall customer relationship strategy.

Pamela Toft
Vice President