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Insight100 because loyalty matters Customer Loyalty Tariq Mahmood
Insight100because loyalty matters
Customer Loyalty
Tariq Mahmood
Insight100because loyalty matters
“The purpose of business is to create
and keep customers”
Theodore Levitt (1983)
Professor Harvard Business School
Editor Harvard Business Review
Insight100because loyalty matters
Leaky Bucket
Insight100because loyalty matters
Insight100 definition
“Wants to do business with us because
of who we are and how we do things”
“Wants to tell others about us”
Insight100because loyalty matters
Customer Loyalty
Benefits.......
Cost savings & Profitability
Retention v Acquisition
Account management
Less price sensitive
Consistent buying behaviour
Protect market share
Customer satisfaction
Insight100because loyalty matters
Customer Loyalty
Save Money An increase of customer loyalty of 1 percent is equivalent to a 10
percent cost reduction (source: Bain & Co.)
Increase Sales The probability of selling to a new prospect is only 5 percent to 20
percent while the probability of selling to an existing customer is 60
percent to 70 percent (source: Marketing Metrics)
Grow Profitability Customer loyalty accounts for 38 percent of margin, 40 percent of
revenue growth and 38 percent of shareholder value (source:
Accenture Research).
Insight100because loyalty matters
Loyalty v Satisfaction
Good is not good enough…….
75% of customers that defect to a
competitor claim that they were satisfied
with the company or service from which
they defected.”
Gartner Group, CRM analytics and personalization
Insight100because loyalty matters
Customer Loyalty
Drivers…….
Integrity
Competence
Recognition
Proactivity
Savvy
Chemistry
Insight100because loyalty matters
Customer Loyalty
Top 5 Loyalty Drivers
44%
39%36% 35%
31%
Staff attitude Deliver on
promises
Returns /
warranty
policy
Accurate
product
information
Value me
Research by Deloitte and Touche Consulting Group
Insight100because loyalty matters
Measuring Loyalty
Net Promoter Score®
NPS®
The Ultimate Question®
Net Promoter Score®,NPS®, and The Ultimate Question® are registered trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld.
Insight100because loyalty matters
The Ultimate Question®
How likely is it that you would recommend us to others?
Promoter
Passive Detractor
Extremely
unlikely
Extremely
likely
NPS = % Promoters - % Detractors
0 1 2 3 4 5 6 7 8 9 10
Insight100because loyalty matters
Scoring How likely is it that you would recommend us to others?
Promoters
40%
Passives
40%
Detractors
20%
Extremely
unlikely
Extremely
likely
NPS = 20
0 1 2 3 4 5 6 7 8 9 10
Insight100because loyalty matters
Scoring How likely is it that you would recommend us to others?
Promoters
20%
Passives
80%
Detractors
0%
Extremely
unlikely
Extremely
likely
NPS = 20
0 1 2 3 4 5 6 7 8 9 10
Insight100because loyalty matters
Scoring How likely is it that you would recommend us to others?
Promoters
50%
Passives
20%
Detractors
30%
Extremely
unlikely
Extremely
likely
NPS = 20
0 1 2 3 4 5 6 7 8 9 10
Insight100because loyalty matters
Net Promoter Score®
A loyalty metric
A way of managing your business
Leading indicator
Net worth
Good v bad profits
Know & grow
Growth rate twice that of competition
Insight100because loyalty matters
Bad Profits
“Whenever a customer
feels misled,
mistreated, ignored, or
coerced, then profits
from that customer are
bad.”
Creates Detractors
Good Profits
“When a company so delights its customers
that they willingly come back – and not only that, they tell their
friends and colleagues.”
Creates Promoters
Insight100because loyalty matters
Net Promoter Score®
Benefits…….
Simplicity
Actionable results
Good profits
Open source
Insight100because loyalty matters
Net Promoter Adopters
Insight100because loyalty matters
Total Customer Worth
Insight100because loyalty matters
Typical surveys
70%
Highly
Unlikely
1 2 3 4 5 6 7 8 9 10
Very Likely Likely Unsure Unlikely
7% 10% 10% 3%
How likely is it that you would recommend us to others?
Insight100because loyalty matters
Result
80% of our customers are likely to
recommend us to others!
Aren’t we doing well!!
Some room for improvement
Insight100because loyalty matters
Alternative Result How likely is it that you would recommend us to others?
Promoters
10%
Passives
70%
Detractors
20%
Extremely
unlikely
Extremely
likely
NPS = -10
0 1 2 3 4 5 6 7 8 9 10
Insight100because loyalty matters
Insight100because loyalty matters
Insight100because loyalty matters
Loyalty Surveys
Features
On-line or paper based
Customers or employees (or both)
3 questions
3-5 minutes to complete
Report by various dimensions
Insight100because loyalty matters
Example Loyalty Drivers
Speedy, flexible & responsive service
Delivery to promise
Approach to resolving complaints
Staff attitude & enthusiasm
Technical knowledge & expertise
Quality of product
Range of products and services
Price
etc
etc
Insight100because loyalty matters
Example Employee Loyalty Drivers
Challenging, interesting & meaningful work
Opportunities for career progression
Involvement in decision making
High degree of team & camaraderie
Regular & constructive feedback
Flexible working arrangements
Fair & equitable reward and remuneration
Recognition and appreciation
etc
etc
Insight100because loyalty matters
Outputs
Score
Top 5 loyalty drivers
Performance against drivers
Suggestions for improvement
Insight100because loyalty matters
Benefits
Low cost, high value
Independent, objective, easy to understand
Helps reduce perception gap
Identifies areas for improvement
Involves customers in improvement
Quality & quantity of responses
Flexibility of use
Benchmarking
Insight100because loyalty matters
Insight100 NPS®
66
58 5752 51 49 47
37 37
30 30
18 17
82
-26 -34 -48 -49
Education
Leis
ure
Assessm
ent
Serv
ices
Insura
nce
Tra
inin
g
Monitoring S
erv
ices
Leis
ure
Reta
il
Insura
nce
Recru
itm
ent
Manufa
ctu
ring
Accounting
Leis
ure
Tele
com
Leis
ure
Leis
ure
Logis
tics
Leis
ure
Net Promoter Score
Insight100because loyalty matters
Insight100 ENPS®
8480
62
43 43
32
15
1 -1 -3 -7 -7 -10 -28 -29 -59
Education
Insura
nce
Accounta
ncy
Care
Education
Tra
inin
g
Recru
itm
ent
Sto
ck m
onitoring
serv
ices
Leis
ure
Pro
cure
ment &
Fulfilm
ent
Leis
ure
Tra
inin
g
Care
Pro
fessio
nal
Serv
ices
Manufa
ctu
ring
Education
Employee Net Promoter Score
Insight100because loyalty matters
NPS® v ENPS
6671
1
43
80
2
15
-19 -12 -13 -51-7 -1 -7
Net Promoter Score
Employee Net Promoter Score
Insight100because loyalty matters
Customer Loyalty Drivers
Insight100because loyalty matters
Employee Loyalty Drivers
Insight100because loyalty matters
Customer surveys
Over 26,000 surveyed
3,700 responses
1,922 suggestions for improvement
Average response rate 23%
Insight100because loyalty matters
Delivering Outstanding
Customer Service
Putting the Customer First®
Insight100because loyalty matters
Why Customer First?
A clear message to customers that they are putting customers at the heart of their organisation
A practical approach to develop a customer-focused culture that delivers outstanding customer service
Putting the Customer First ®
The National Standard for Customer Service
Creating a reputation for outstanding service
Insight100because loyalty matters
Why Customer First?
The Standard is associated with
organisational performance and real
impact:
Competitive differentiation
Increased financial turnover
Improved services
Winning new customers
Customer Loyalty
Insight100because loyalty matters
Why Customer First? What our Customers say ……… “With happy employees delivering a service we are proud of
and happy customers that feel confident they are getting the very best from us as a utilities provider; we are in a great position to attract further business. We look forward to the continued benefits holding this accolade will deliver to CNG”
(Jacqui Hall, CNG Ltd)
“As part of a major global business, we have to secure a crucial competitive edge-’Delighted Customers’”
(Steve Carter, Daimler Insurance)
“Customer First has helped us to put in place processes that help us build long term relationships with our customers, and grow our business as well as theirs as a result”
(Liz Dowd, CMA CGM)
“Achieving the Customer First Standard has been incredibly positive for our team & provided us with a framework for continual improvement”
(Dr Bruce Butler, Grant Thornton LLP)
Insight100because loyalty matters
Customers
Insight100because loyalty matters
Universities
Kingston
Leeds Met
Sheffield
London South Bank
East London
Hull
York
Bradford
Exeter
Huddersfield
Westminster
Teesside
North Warwickshire and Hinckley College
Imperial College
London School of Economics and Political Science
Polymer Centre
Insight100because loyalty matters
Achieving the Customer First
Standard
Insight100because loyalty matters
The Customer First Standard
The Standard is divided into 3 sections:
Customer Relationships
Market Awareness
People
Each section has a series of Statements
which an organisation must comply
with in order to meet the Standard
Insight100because loyalty matters
The Standard Examines and tests an organisation’s approach to the delivery of effective
services at 3 levels:
Strategic – Board , Directors, Senior Management team –i.e.
planning and policy
Operational – Staff Delivering the services and carrying out policy
Tactical – Partners, sub contractor and joint delivery
It examines and tests processes for monitoring, evaluation and
improvement
Insight100because loyalty matters
The Customer First Standard
Section Statement Example Customer
Relationships
1. We build successful long term
relationships with our customers
Market Awareness 19. The introduction of every new or
changed service is based on a clear
rationale
People 27. We use customer feedback to
evaluate our peoples’ performance
Insight100because loyalty matters
Support
Throughout your journey to achieving Customer First, you will have
access to:
Dedicated Relationship Managers
Guide to ‘Putting the Customer First’
Online Resources
Our Network of Approved Consultants
