Implementing and running an effective research process can produce valuable insights: who your customers are, what drives them and most importantly, how to keep them coming back.
Market research is an intelligence gathering process. As well as analysing a company’s products and services it can determine whether a solution will satisfy customers' needs. It can identify market trends, demographics, economic shifts, customer's buying habits, and important information on competition.
We consider below the importance of undertaking customer research and the benefits to businesses from implementing and running effective research processes.
Improving customer lifetime to save money
Recent research indicates that almost 70% of UK customers ended a business relationship in 2013 due to poor service. To understand the revenue your business could lose, take your average customer lifetime value and multiply that by 70% of your total customer base.
In many business models the weighting of customer retention has a significant impact on overall business results. Good customer research needs to understand what drives customer retention, and where you can influence your customers’ perceptions and activities in areas other than pricing.
“It is six to seven times more expensive to gain a new customer than to retain an existing customer.” Frederick Reichheld, Strategist and author of The Loyalty Effect
It’s not just these bottom-line statistics that make customer research so important. Research can also uncover information on other vital aspects of business, such as reputation, brand values and competitor perceptions.
TTi Global’s customer research helps you to understand why and at what point customers are leaving, to increase their lifetime value.
Our work in customer and service environments has supported many clients in making positive changes to influenced customer retention.
Here are some examples:
Our team helped a premium car manufacturer improve the way their new vehicles are handed over to customers, dramatically improving their Customer Satisfaction Index (CSI) scores and also those on the well-known JD Power survey.
By advising our clients on changing underwriting criteria, we’ve reduced the time to process applications, winning them more business achieved through more timely offers and sign up.
We helped a key client to understand their rate of candidate acceptance more clearly. By reviewing their key processes they were able to drive up their placement ratio. This was achieved through speed of placement, winning candidates from other agencies and adding increased levels of revenue growth.
Driving loyalty, growing profits
“A 5% improvement in customer retention rates will yield between a 25 to 100% increase in profits” Reichheld (Bain & Co.)
By gathering and analysing data about our clients’ customers we helped them to make money-saving improvements to their processes. This has led to better customer service and enhanced retention.
And the end result? Our clients have a more loyal customer base, more business and increased profits.