Laurie EnglertUniversity of St. Thomas

May 16, 2007

Can companies experiencing rapid growth maintain loyal

customers?

Has a company won your loyalty?

Northwest Airlines:E-mail check-inSelf-printed boarding passesFree first-class upgradesPriority security screening

Why do companies want to build loyalty?

Acquiring new customers is expensive• Companies spend 7x more on new customers

Loyal customers cost less to keep, spending 3x more in the 3rd year• Less marketing expense• Reduced customer turnover expenses• Lower transaction costs

Competition is intense & continues to grow

How do companies build customer loyalty?Company commitment – all departments

Use of long-term strategy vs. short term tactics

Requires continuous, interactive relationship building

Why is this topic important to me? Currently a Marketing Director for a

rapidly growing companyNeed to do more with less dollars!

More about Chief…Growing at 55% per yearLeading global manufacturer of flat

panel mountsHiring 100 people per yearCustomer service oriented companyRapid growth and change threatens our

ability to stay in touch with customers

What did I want to know?Can companies experiencing rapid growth maintain loyal customers?

What are the key issues?Is Chief in touch with customer needs?

How does Chief perform against competition?

Can Chief do more to ensure long-term loyalty?

Who did I survey?Dealers & distributors who currently purchase mounts from Chief

Located throughout the US & Canada

Focus on residential and commercial installations

How did I reach them?Eight phone interviews1,000 web surveys

How many responded?116 completed web surveys for a response rate of 11.6%

20% was expected

What did I evaluate?17 services and

attributes:1. On-time delivery2. Value (product price

+ services)3. Accurate/Complete

Shipments4. Ease of Install5. Customer Service &

Support6. High quality

products7. Innovative product

solutions8. A broad product line9. No-hassle return

policy

10. Accurate billing11. Technology tools12. Unique product

features13. Shipping/tracking

info14. Product

compliance15. Timely billing16. Product training17. Brand

Is Chief in touch with customer needs? Rate the Importance of Services and Attributes

What I found…Respondents find all 17 services

and attributes important:• Average rating = 8.47 on a 10-point scale

Top 5 include:• Accurate/complete shipments• High quality products• On-time delivery• Value (product & services)• Technology Tools

Is Chief in touch with customer needs?

Rate the Satisfaction of Services and Attributes

What I found…Respondents are very satisfied with Chief services and attributes:• Average rating = 8.89 on a 10-point scale

Is Chief in touch with customer needs?

Impact Differential: (Satisfaction – Importance)

What I found…There is good news!• Small differential between importance and satisfaction

There is opportunity for improvement:• On-time shipments rated 3rd most important - 13th for satisfaction• Value rated 4th most important - 9th for satisfaction• Ease of Install rated 5th most important - 7th for satisfaction

How does Chief perform against competition?

Chart 4

78.1

61.4

41.2

36.8

28.9

23.7

21.9

21.1

20.2

15.8

13.2

10.5

8.8

5.3

3.5

0.9

0.9

0 10 20 30 40 50 60 70 80 90 100

high quality products

a broad product line

innovative solutions

ease of install

on-time delivery

customer service/support

recognized brand name

unique product features

value

complete shipments

technology tools

shipping/tracking information

product testing and compliance

no-hassle return policy

accurate billing

timely billing

product training

Percent of Dealers Identifying Each Factor as Differentiating Chief from its Competitors

Which factors differentiate Chief from its competitors?

Opportunities!

Opportunities!

What I found…Chief is outperforming in 2 Key

areas:• Quality products (78%)• Broad product line (61%)

There is opportunity for improvement:• Product training (.9%)• Timely billing (.9%)• Accurate billing (3.5%)• No-hassle return policy (5.3%)

Could Chief do more to ensure long-term loyalty?

Quick Shipment product availability program – most asked about option!

Frequent buyer/points programEnd-of-year pricing rebates tied to growth

Volume freight incentivesOnline access to customer support

Preferences for loyalty programs offered by other companies.

Why are the findings important?

Chief now has a roadmap to use going forward:• Chief hasn’t lost momentum with customers despite growth• Chief offers competitive advantages in some areas but could address others• Chief has opportunities to do more to continue it’s long-term strategy of maintaining and building loyal customers

Can companies experiencing rapid growth maintain loyal customers?Yes!• Companies must be focused on customer needs– from internal billing to external shipping – they’re all important! • Companies must think long-term; competition is continually adding services• Companies need to grow customer relationships by improving existing or introducing new services

What are my recommendations?

• Keep in touch with customers:• Continue surveys to monitor loyalty/satisfaction

• Evaluate performance to keep a competitive advantage• Leverage Chief strengths by integrating

“product quality” and “a broad product line” into marketing messages

• Work on weaknesses - billing, product training and returns policies

• Continue adding and evaluating services to keep customers loyal• Work with internal groups to evaluate and

implement quick ship program

Do you have any questions?

Thank you for your loyal listening…