It doesn’t take much to convince business leaders that building customer loyalty is a logical customer retention strategy. Intuitively, it just makes sense.
In fact, customer retention is just one of many different reasons why a company would want to partner with a business consulting firm, like Walker, to develop strategies for building customer loyalty. But, one often overlooked reason is loyal customers will stick with you during tough times.
We have all worked for a company that has encountered significant change and times of change create uncertainty amongst employees and customers. Whether the change is a significant product upgrade, an overhaul of an order management or billing system, or the integration of a new call center, all have implications on the customer experience and customer loyalty.
Companies that have a strong and loyal customer base will come out ahead during times of change. The graph on the left is data for a company that is in the process of implementing a significant change that directly impacts the customer.
The horizontal axis represents the customer experience of the change, with responses ranging from "excellent" to "poor." The vertical axis represents the percent of customers who are "extremely" or "very likely" to search for alternative products. The two lines represent loyal customers and disloyal customers.
The key take-away – The difference between the slope of the two lines is extreme. Notice the dramatic slope for the disloyal group compared to the subtle slope for the loyal customers. When loyal customers encounter a bad experience they will stick with you. Whereas, disloyal customers will not tolerate a bad experience.
There are many benefits of having a loyal customer base. Which ones do you think get overlooked?
Note: This post was originally published in Customer Connection on 9/2/2009.