The Building Blocks of Business and Personal Success

Posted on: 19 Aug 2010
Link: https://empoweringabc.com/2010/08/19/c-is-for-customer-loyalty/

The Building Blocks of Business and Personal Success

Posted on: 19 Aug 2010

C is for Customer Loyalty

In this down economy, repeat customers and word of mouth can be key to your survival.

What makes customers loyal to brands?

In 2008 Forrester Research published a report called, “Balancing The Funnel: Which Consumers Are Loyal?” In it, there is a chart that correlates certain variables with customer loyalty across several industries.

In a nutshell:

  • Prior experience had a “medium” level of correlation with loyalty for Banking, Mobile Phones, Credit Cards, Consumer Packaged Goods (CPG) — and a small positive correlation with Durable Goods.
  • These factors also had small to medium positive correlations with loyalty:
  • Trust
  • Reliable service
  • Product fits needs
  • Ease of use
  • Customer service
  • Social responsibility
  • Brand

What had a “small” negative correlation with loyalty?

  • Advertising for Banks
  • Loyalty programs for CPG

And what had no measurable correlation except where noted:

  • Advertising — for industries except Banks, where it was negative.
  • Loyalty programs — for industries except CPG, where it was negative.
  • Price — except for durable goods where there was a small positive correlation.

Note: No factors examined had a “high” level of correlation with loyalty.

What we can all learn from Apple

Apple gets it right for Customer Experience
Apple customers tend to be very satisfied and loyal. I’m talking about average Apple customers — not the ones who will camp outside of Apple stores for days to be one of the first to get their hands on the company’s latest offering.

Why are they so loyal? Many reasons, but it really boils down to: Outstanding Customer Experience.

Of the factors that Forrester found correlating to customer loyalty, Apple nails most of them.

Going a bit deeper, I asked a good friend (who is a long time Apple user) a few open ended questions about his loyalty.

Q: What are the things you like most about Apple products?

A: So sleek and cool and easy to use. I really really think they understand the users and it shows in their product portfolio. Compared to similar companies, each product only has a couple basic variations and that’s really all anyone needs. You won’t see 15 different configurations that are only slightly different. It makes it easy to pick and choose what you want.

Take the iPod. There are 4 basic types and they are all visually distinct and target different user needs. Making your choice on the device that meets your requirements is simple.

Creative was another early player in the MP3 player market. But unlike Apple, their lineup consisted of several different players that often had similar features to each other and names that didn’t help customers to tell them apart. Do you want the Creative NOMAD MuVo, MuVo NX, MuVo TX FM, or maybe the Muvo Micro N200? The differences between models were often lost on potential customers.

Buyer remorse quickly kills any chance of loyalty you have with a customer. Make their buying decision easy. Help them buy your product that best meets their needs.

Q: What would you say are the top things you like about Apple as a company?

A: I do think they understand users and the importance of getting something right, making a product that is usable the first time around and people will like.
In general their support is very good. You hear a few stories on he web about bad support, but I think people are exaggerating or it sounds awful because there are so few other complaints that they stand out. Honestly I have never had a problem, going back 15 years ago. I’ve had only a couple hardware issues and they were all handled impeccably.

Innovation innovation innovation. I don’t know how they do it but they keep cranking out the most innovative interfaced consumer products there are. Nearly every worthwhile interface innovation was done by Apple first or at least commercialized first.

This also boils down to Customer Experience.

Apple is focused on delivering products and services that satisfy people’s needs and desires. Period.

And the marketplace is rewarding them handsomely for their dedication to their customers.

Back to the Forrester results. These are the factors that affect customer loyalty most:

  • Prior experience
  • Trust
  • Reliable service
  • Product fits needs
  • Ease of use
  • Customer service

What aspects of your business are you focused on? Where are you putting your resources to work?

I don’t have an iPhone (yet), nor do I have an iPad. I do have an iMac that I use for testing web sites I build, and I have an iPod for listening to podcasts when I’m on the go… so I would hardly say I am an Apple fanatic. But let’s face it: They’re getting it right!

What do you think?

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One Response to “C is for Customer Loyalty”

  1. EmpoweringABC.com » C is for Customer Experience

    […] The limited line up strategy is similar to the lineup of iPods I discussed in my previous blog post C is for Customer Loyalty. […]

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This entry was posted on Thursday, August 19th, 2010 at 11:02 am and is filed under Business, English. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.