Forrester's Bruce Temkin: Customer Service Attracts Loyal Customers
In a new Forrester Research report called Service Seekers Are More Loyal Than Price Seekers (based on a survey of about 4,600 US consumers), we analyze the loyalty of four consumer segments that I've previously discussed.
The report examines the loyalty of these segments across 12 industries: airlines, banks, wireless providers, credit card providers, hotels, insurance firms, Internet service providers, investment firms, health plans, PC manufacturers, retailers, and TV service providers. Across all industries and consumer segments, I analyzed three areas of loyalty: willingness to buy more products, reluctance to switch from current providers, and likelihood to recommend providers to friends and colleagues.
Here are some of the interesting findings from the analysis:
- Across all 12 industries and all 3 measures of loyalty, Service Seekers are more loyal than Price Seekers.
- In all 12 industries, the most loyal segment is either Service Seekers or Price & Service Seekers.
- In 10 of the 12 industries, Service Seekers are the most reluctant to switch away from their current provider.
- The gap between loyal Service Seekers and loyal Price Seekers is at least 20% in the following areas:
o Willingness to buy: Credit card providers, TV service providers, Internet service providers, airlines, and insurance providers.
o Reluctance to switch: Airlines, TV service providers, insurance providers, and hotels.
o Likelihood to recommend: TV service providers, credit card providers, medical insurers, Internet service providers, and insurance providers.
- The gap between loyal Service Seekers and loyal Price Seekers is lower than 10% in only the following areas:
o Willingness to buy: Banks, investment firms, and retailers.
o Likelihood to recommend: Retailers, banks, and PC manufacturers.
o The bottom line: Good customer service attracts more loyal customers.
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Bruce Temkin is a Vice President, Principal Analyst at Forrester Research where he serves Customer Experience professionals. Bruce blogs at Customer Experience Matters. Reprinted with permission of the author.
Related Entries
- Guest Blogger Joseph Jaffe: It's Better to Be S.A.F.E. Than Sorry
- Guest Blogger Ralph Heath: What Has Happened to Customer Service in America?
- Preventing a Customer Experience from Going Downhill
This study validates the suggestion that delivering great service and supporting that service with great customer service is needed to make customers feel valued. We've seen a significant increase in our customer lifetime value (+40%) when we switched to a modern, interactive support portal software and strengthened our social media efforts to engage and reward customers for their service.
Great study, thanks for sharing! :-)
~Joseph