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Don’t Ditch your Disloyal Customers – Nurture them!

February 19th 2018

Instead of abandoning customers at the first sign of disloyalty, win back their hearts and minds by exploring the relationship between Customer Satisfaction and Customer Loyalty.

The goal of every organisation is to attract new customers. It’s a vital part of growing your market share, but it’s equally vital to nurture and value your existing customers – even the disloyal ones. As well as taking less effort to acquire, your existing customers will cost your business an estimated five times less to retain than the pricetag of winning a new customer.

Ask the right questions

Q1. ‘How can we find our which of our customers are loyal and which aren’t?’

As a leading provider of international customer satisfaction research, this is an easy answer for TTi Global – We develop questionnaires that focus on measuring the areas most important to customers, customer satisfaction, and their tendencies towards loyalty. These metrics can be further enhanced by seeking to understand a customer’s desire and intention to recommend a business, and how much effort a customer needs to input to achieve their desired outcomes.

Q2. ‘What do we do about customers showing signs of disloyalty?

Effective data management, combined with customer-focused questionnaire design, helps us ensure that clients can identify who these customers are, as well as what actions are needed to transform disloyal customers back into devoted ones.

For example, The matrix below illustrated responses from our UK-wide benchmark survey, December 2017, measuring satisfaction across customer interactions against customer effort and recommendation for 14 different sectors of industry.

Influence of customer satisfaction on loyalty matrix

This satisfaction-loyalty matrix has been divided into four key areas showing different levels of customer tendency towards loyalty, and perceived satisfaction.

1.   Low Customer Satisfaction, Low Customer Loyalty

Customers in the bottom left segment provided low satisfaction scores alongside low loyalty scores. These are customers who have likely had poor customer experience caused by common ‘frustration factors’ – eg. Employees lack of knowledge, or inadequate systems, resulting in the inability to provide information, or employees being disinterested and unhelpful.

Mitigating this behaviour requires action to identify which employees have customer training and development needs and who would benefit from coaching in customer service, or other relevant skills

2.   High Customer Satisfaction, Low Customer Loyalty

The bottom right segment shows customers who have given high satisfaction scores, yet have a tendency to be disloyal. Upon reviewing the data, we discovered that these customer experiences had been largely transactional, and mainly online, where the customer has been highly satisfied with the purchase process and has achieved a purchase price which has fulfilled their expectations. The result of this is that the customer comes away with little brand loyalty because the transaction has been largely based on price, rather than fulfilling a service requirement.

The opportunity to enhance customer loyalty in this segment lies in establishing value-adding services – eg same or next-day delivery – or an attractive customer loyalty programme.

3.   High Customer Loyalty, Low Customer Satisfaction

The top left segment illustrates customers who have a tendency towards high loyalty, but low overall satisfaction with the business. These customer are often ‘captive customers’ who are contractually bound to a company that meets their needs for a purpose – eg. A finance company. However, as soon as the contract expiry date rolls around, most will switch once they have found a better deal.

Building customer loyalty here involves creating market-leading customer experience across every touchpoint, or offering highly competitive deals that can match, or better, other service providers in order to retain their business.

4.   The Sweet Spot (High Customer Satisfaction, High Customer Loyalty

The top right segment is the ideal zone, and contains customers who are highly satisfied and have a high tendency towards loyalty – It’s a win/win!

The key to managing and maintaining this harmony is to keep on delivering the same excellent customer service, using regular customer satisfaction surveys to make sure your high standards are being upheld, and avoiding customer complacency. These customers will still be tempted to stray, but continually marketing innovative services or products will help keep your most valuable customers interested.

Relationship counselling for businesses

Don’t break up with your disloyal customers unnecessarily. TTi Global Research is on hand to help you determine where your most disloyal customer segments are, and guide you through ways in which to win back their hearts. Our customer satisfaction survey experts are here to help. Email us here.