Customer Loyalty Scores Reveal ‘Best of Breed’ Printers
Do you really know how loyal your customers are? Or, do you just feel you’re doing great?
Last year, the owner of a printer in Colorado shared how he dodged a bullet saving one of his established large accounts. What surprised him most was that the two of them sat together each month at the local Rotary meeting, but the customer never said anything to him face to face. The customer could not tell him face to face that he was blowing it, and only when the printer owner received a filled out survey did he uncover the issues.
We all have stories in which our loyalty to a supplier slips to the point where we turn elsewhere, and we did not share our dissatisfaction. Many of us would rather just slip into the sunset than invest time in situations where we no longer have skin in the game. We all do it, but it doesn’t have to end that way.
How do you measure loyalty?
Loyalty is measured by asking one question: “How likely are you to recommend us to colleagues and friends?” Let’s first look at a couple competitive industries—life insurance and airlines.
For life insurance companies, customer loyalty is in the low 20 percent range, and for airlines it is worse. But still, State Farm (35 percent) and Southwest Airlines (52 percent) achieve high customer loyalty and, not coincidentally, are more profitable than their peers. Read Fred Riecheld’s best seller—“The Ultimate Question”—to learn how businesses achieve success by measuring customer loyalty and taking action.
Study after study show that customers participating in a survey have the potential to be loyal if complaints are corrected. The entire feedback system reinforces itself, both with the customer and supplier.
The ultimate question should be asked to customers in a safe environment to drive candid feedback. If a customer is not “very likely” to recommend you, then they are not loyal. It’s that simple.