Keys to measuring loyalty successfully
There are several ways to measure customer loyalty reliably but the process requires a holistic approach, according to Larry Crosby, CEO for Synovate Loyalty, in his speech at an event hosted by Synovate South Africa recently.
According to Crosby, "Many companies are still looking for valid and reliable customer loyalty measures to guide their actions in realising improved financial results. But there's no single survey question that can give you all the answers you need to build and leverage this critical asset - a customer base of passionately loyal customers."
Using various case studies to demonstrate how leading companies are seeing useful results, Crosby explained the need to use measures that are supportive of a company's business strategy, the reliability of multi-item metrics, the power of emotion in building customer loyalty, and ways of putting customer loyalty research to work through management engagement, among other ideas.
The value of loyalty For companies working with customer satisfaction and loyalty strategies, Crosby went on to clarify the influence of cultural nuances for those with multi-country loyalty strategies, the risk of premature abandonment of a loyalty programme, the need to translate customer loyalty return into a monetary value (and its bottom line impact), and the tracking of emotional drivers of loyalty.
Crosby suggested that corporate executives should begin focusing on a customer loyalty strategy by using an index to measure loyalty: "Select loyalty measurement items based on the behaviours you strategically want to influence. Statistically verify that the items reflect loyalty, then use the index as your Key Performance Indicator (KPI) - but avoid net scores."
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