How do you define loyalty? This is a concept that marketers have thought and worried about for decades. As a topic area, academics and practitioners alike have thoroughly conducted customer loyalty research. A few things that we know about loyal customers:
The area of profitability, as far as loyal customers are concerned, is somewhat muddied as well. If you are lucky enough to be able to measure customer profitability then you will likely find a percentage of your base that is loyal, but may not necessarily be profitable. Identifying this group and creating efforts to move them up the profitability chain is a topic for another discussion.
Bringing this discussion back to measuring customer loyalty, we can turn our eyes to a process developed by the market research firm Burke, Inc. Researchers with Burke have developed an index they call the Secure Customer Index® or SCI for short. This index is survey driven and can easily be deployed in any customer satisfaction study. The SCI® uses three questions to comprise its index: overall satisfaction, percentage that would repeat purchase, and percentage that would recommend.
The secure customer is the one that is jointly: very satisfied, definitely would repurchase and definitely would recommend. Customers that fall outside of this nexus are more vulnerable to churn. If your CRM allows you to track profitability, then you can tie a customer’s loyalty index score to their individual profitability and further assess loyalty’s impact to the bottom-line.
Loyal customers exhibit those types of behaviors that keep a business growing, especially in less stable economic times. Therefore, they are worth getting to know. Loyalty measurement is germane to both consumer and B2B marketing efforts.
- They tend to be satisfied
- They return with some level of frequency
- They will talk about their experiences with others
The area of profitability, as far as loyal customers are concerned, is somewhat muddied as well. If you are lucky enough to be able to measure customer profitability then you will likely find a percentage of your base that is loyal, but may not necessarily be profitable. Identifying this group and creating efforts to move them up the profitability chain is a topic for another discussion.
Bringing this discussion back to measuring customer loyalty, we can turn our eyes to a process developed by the market research firm Burke, Inc. Researchers with Burke have developed an index they call the Secure Customer Index® or SCI for short. This index is survey driven and can easily be deployed in any customer satisfaction study. The SCI® uses three questions to comprise its index: overall satisfaction, percentage that would repeat purchase, and percentage that would recommend.
The secure customer is the one that is jointly: very satisfied, definitely would repurchase and definitely would recommend. Customers that fall outside of this nexus are more vulnerable to churn. If your CRM allows you to track profitability, then you can tie a customer’s loyalty index score to their individual profitability and further assess loyalty’s impact to the bottom-line.
Loyal customers exhibit those types of behaviors that keep a business growing, especially in less stable economic times. Therefore, they are worth getting to know. Loyalty measurement is germane to both consumer and B2B marketing efforts.