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Unlocking the customer treasure chest

Understanding the relationship between loyalty, satisfaction and customer delight is the key to unlocking higher profits.

Customer satisfaction research unlocks higher profits

The key to unlocking the customer treasure chest is developing a deep knowledge of your customers, their needs, motivations, service and product expectations and the two crucial factors of what drives their satisfaction and loyalty.

This stream of customer insight must feed into management processes and be actionable to drive improvement.

Understanding your customers and increasing loyalty

In 1986 Parasuraman, Zeithaml and Berry (PZB) designed the SERVQUAL instrument for assessing service quality. Our customer research team have significant experience in applying this model across different markets, public and private sectors, business types and non-profit organisations. The model has also been successfully used in regulated businesses.

This is the PZB model for assessing service quality:

We apply the PZB gap analysis model through a research framework that is robust, yet provides sufficient flexibility to enable its use across all organisations, businesses and relationships where there is a beneficiary of service or a product.

The most important criteria in evaluating service quality is defined by the customer, it is their judgement that counts when measuring service quality perceptions.

The relationship between loyalty, satisfaction and customer delight

This relationship should never be underestimated. The more satisfied or delighted the customer is, the more loyal they will be, increasing re-purchase and recommendation indicators.

The chart below presents an example, showing the highly correlated link, the more satisfied the customer, the more loyal they will be and likely to repurchase.

Satisfying and delighting customers through delivering value

It is important to understand that loyalty is an outcome - it is influenced by other factors, essentially through the value they perceive during their interactions and their satisfaction.

Creating and delivering excellent service is the goal. Measuring how well customers perceive this is achieved and benchmarked against competitors will support your objectives.

Before loyalty and satisfaction can be improved we help clients through these initial steps:

1. Measuring the loyalty metric as it stands now, before improvement starts. We also establish the different loyalty rates of different customer groups e.g. buyers of different products or services, types of customer e.g. male or female etc.

2. We can also measure the cost of customer disloyalty, again by different customer types. Using the two measures together we can provide an invaluable predictor of the return that each percentage point of improvement in loyalty will make to profitability.

These metrics provide the baseline for trending improvement over time, enabling meaningful targets to be set and action planning undertaken to support change.