A new report from Walker Information has revealed that less than one in two information technology (IT) customers are truly loyal to their IT suppliers.
Less than half (44%) of all IT customers are truly loyal (i.e. they plan and want to do business with a company) to their IT suppliers, according to a report from Indianapolis-based customer loyalty management experts and researchers, Walker Information.
The '2004 Walker Loyalty Report for IT' provides a variety of results about customers' attitudes and experiences, and their perceptions of IT firms. Fifty-one companies were represented across five key sectors (computer software, IT services, networking equipment, servers and workstations, and storage systems).
Loyalty vs. profitability
In addition to key benchmarking information, the report provides specific loyalty information for top-performing brands receiving a statistically significant number of evaluations. Each brand was classified either as 'Loyalty Leader', 'Loyalty Limbo', or 'Loyalty Laggard', based on its individual loyalty scores.
The report also links these loyalty categories to overall profitability, using a proprietary model based on combining financial and loyalty factors. The correlations are significant:
- The Loyalty Leader group (companies with high levels of customer loyalty) generated an average operating margin of 12%;
- The Loyalty Limbo group generated an average operating margin of 6%;
- The Loyalty Laggard group generated an average operating margin of -11%.
According to the report, three out of ten (30%) of IT customers are trapped. Their commitment to the supplier organisation is weak but their likelihood to continue doing business is strong. However, nearly one-quarter (23%) of all surveyed were found to be high risk, with both low commitment and low intentions of continuing the relationship.
Key findings from the report include:
- Overall perceptions: While more than four out of five (84%) are satisfied with their IT suppliers, the overall quality is viewed less favourably, with only 72% having positive opinions.
- Future trends and behaviours: Most expressed a willingness to recommend their suppliers across sectors (69%) but fewer plan to increase their business with existing suppliers (44%).
- Experiences: Less than half (47%) have positive perceptions of non-technical customer service in the IT arena.
- Satisfaction still doesn't equal loyalty: The number of IT customers claiming to be satisfied with their companies has increased four percentage points to 84% since 2002, while the number of customers truly loyal to their IT suppliers dropped to 44%, down three percentage points since 2002.
Walker Information gathers and analyses information that supports businesses in their quest to better understand and serve customers, and conducts critical business research in the areas of employee loyalty, corporate philanthropy, and business ethics for companies of all sizes.