New relationship model helps predict customer loyalty

The relationship between brands and customers resembles human relationships, with both rational and emotional dimensions, according to the new Harris Interactive Commitment Model - a research framework that helps marketers understand and measure the drivers of customer loyalty.

Harris Interactive says that the Commitment Model can be used to strengthen the bonds between customers and brands by providing the insights and understanding needed to build more committed, loyal and profitable customer relationships.

Loyalty simulators
The model also provides 'loyalty simulators' that allow users to see how changes in service delivery, facilities, and many other aspects of their business are likely to affect the bottom line.

According to Stephan Sigaud, group president for Harris Interactive Loyalty, "The Commitment Model is not built on widely used satisfaction metrics alone, and this is really challenging the way that other companies look at loyalty. Instead, we look at the rational and emotional dimensions of commitment - two concepts that allow us to model customer behaviour more precisely and to demonstrate how committed customers are to a brand."

States of relationship
It's no secret that customer relationships evolve over time as customers bond with brands. But the Commitment Model represents these bonds in a two dimensional format, using both rational and emotional dimensions. And this representation of commitment reveals four relationship states:

1. Acquaintance - the customer is not connected to the brand;
2. Partnership - the customer is rationally connected to the brand;
3. Romance - the customer is emotionally connected to the brand;
4. Commitment - the customer is both rationally and emotionally committed to the brand.

Committed customer behaviours
The Commitment Model confirms that customers who are both rationally and emotionally committed to a brand behave in ways that are more beneficial to business than those who are not. For example, committed customers tend to exhibit the following behaviours:

• They are more likely to forgive failure;
• They are willing to try brand or line extensions;
• They buy more or give a greater share of wallet;
• They are less price sensitive;
• They place frequent, consistent orders;
• They usually cost less to service;
• They spread positive word of mouth.

Pilot programmes
Harris Interactive Loyalty has initially tested the model in two separate trial projects in the United States: one with fast food restaurants and another with retail companies. Almost 4,000 customers of 20 fast food restaurant brands and 21 retail brands completed online surveys, answering questions on a wide range of topics including behaviour, attitudes, and demographics.

Joan Fredericks, senior vice president and director of advanced methodology, explained: "The studies also proved other aspects of commitment, such as the likelihood that committed customers will spend more than the average customer. For example, in the retail study, we found that the future spending of committed customers was more than three times that of other customers."

Since the completion of the pilot programmes, the company has used the commitment model with a number of clients in a variety of industries and geographies in both business-to-business and business-to-consumer situations.