Http Www Loyaltyrules Com Loyaltyrules Acid_test_customer Html

Http Www Loyaltyrules Com Loyaltyrules Acid_Test_Customer Html. loyalty with a tool like the Loyalty Acid Test Survey they are operating in the dark Chances are their energy is misdirected and resources are allocated to fix symptoms rather than root causes To build superior loyalty you need an analytical framework and tools 5 Timeless Principles Reichheld excerpt 6/8/01 205 PM Page 5.

Reichheld&#39s 1996 international best seller The Loyalty Effect set out his theory and established the link between loyalty and bottomline profits In Loyalty Rules! he moves from theory to practice using vivid stories and extensive research to illustrate how superior leaders use six bedrock principles of loyalty to build enduring enterprises.

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In this provocative yet practical new book Fred Reichheld argues that loyalty provides the acid test for leadership in today&#39s volatile business environment and that most leaders deserve failing grades In fact the author is quick to highlight that less than half of today&#39s employees believe their company deserves their loyalty Reichheld&#39s 1996 international bestseller The Loyalty Effect.

Loyalty Rules! Bain & Company

Loyalty and GrowthThe Wrong YardsticksGetting The FactsThe Growth ConnectionThe Dangers of DetractorsKeep It SimpleConverting Customers Into PromotersBefore I describe my research and the results from a number of industries let’s briefly look at the concept of loyalty and some of the mistakes companies make when trying to measure it First a definition Loyalty is the willingness of someone—a customer an employee a friend—to make an investment or personal sacrifice in order to strengthen a relationship For a customer that can mean sticking with a supplier who treats him well and gives him good value in the long term even if the supplier does not offer the best price in a particular transaction Consequently customer loyalty is about much more than repeat purchases Indeed even someone who buys again and again from the same company may not necessarily be loyal to that company but instead may be trapped by inertia indifference or exit barriers erected by the company or circumstance (Someone may regularly take the same airline to a city only because it offers the most flights there) Conversely a loyal customer may not m Because loyalty is so important to profitable growth measuring and managing it make good sense Unfortunately existing approaches haven’t proved very effective Not only does their complexity make them practically useless to line managers but they also often yield flawed results The best companies have tended to focus on customer retention rates but that measurement is merely the best of a mediocre lot Retention rates provide in many industries a valuable link to profitability but their relationship to growth is tenuous That’s because they basically track customer defections—the degree to which a bucket is emptying rather filling up Furthermore as I have noted retention rates are a poor indication of customer loyalty in situations where customers are held hostage by high switching costs or other barriers or where customers naturally outgrow a product because of their aging increased income or other factors You’d want a stronger connection between retention and growt So what would be a useful metric for gauging customer loyalty? To find out I needed to do something rarely undertaken with customer surveys Match survey responses from individual customers to their actual behavior—repeat purchases and referral patterns—over time I sought the assistance of Satmetrix a company that develops software to gather and analyze realtime customer feedback—and on whose board of directors I serve Teams from Bain also helped with the project We started with the roughly 20 questions on the Loyalty Acid Test a survey that I designed four years ago with Bain colleagues which does a pretty good job of establishing the state of relations between a company and its customers (The complete test can be found at http//www loyaltyrulescom/loyaltyrules/acid_test_customerhtml) We administered the test to thousands of customers recruited from public lists in six industries financial services cable and telephony personal computers ecommerce auto insurance All of our analysis to this point had focused on customer survey responses and how well those linked to customers’ referral and repurchase behavior at 14 companies in six industries But the real test would be how well this approach explained relative growth rates for all competitors in an industry—and across a broader range of industry sectors In the first quarter of 2001 Satmetrix began tracking the “would recommend” scores of a new universe of customers many thousands of them from more than 400 companies in more than a dozen industries In each subsequent quarter they then gathered 10000 to 15000 responses to a very brief email survey that asked respondents (drawn again from public sources not Satmetrix’s internal client customer lists) to rate one or two companies with which they were familiar Where we could obtain comparable and reliable revenuegrowth data for a range of competitors and where there were sufficient consumer responses we plotted each firm’s net promot The battle for growth among Internet service providers AOL MSN and EarthLink brings to life our findings For years market leader AOL aggressively focused on new customer acquisition Through those efforts AOL more than offset a substantial number of defections But the company paid much less attention to converting these new customers into intensely loyal promoters Customer service lapsed to the point where customers couldn’t even find a phone number to contact company representatives to answer questions or resolve problems Today AOL is struggling to grow Even though AOL’s customer count surged to an eventual peak of 35 million its deteriorating mix of promoters and detractors eventually choked off expansion The fire hose of new customer flow—filled with people attracted to free trial promotions—couldn’t keep up with the leaks in AOL’s customer bucket Defection rates exceeded 200000 customers per month in 2003 Marketing costs were ratcheted up to stem the tide and th One of the main takeaways from our research is that companies can keep customer surveys simple The most basic surveys—employing the right questions—can allow companies to report timely data that are easy to act on Too many of today’s satisfaction survey processes yield complex information that’s months out of date by the time it reaches frontline managers Good luck to the branch manager who tries to help an employee interpret a score resulting from a complex weighting algorithm based on feedback from anonymous customers many of whom were surveyed before the employee had his current job Contrast that scenario with one in which a manager presents employees with numbers from the previous week (or day) showing the percentages (and names) of a branch office’s customers who are promoters passively satisfied and detractors—and then issues the managerial charge “We need more promoters and fewer detractors in order to grow” The goal is clearcut actionable and motivating In short If collecting and applying customer feedback is this simple why don’t companies already do it this way? I don’t want to be too cynical but perhaps the research firms that administer current customer surveys know there is very little profit margin for them in something as barebones as this Complex loyalty indexes based on a dozen or more proprietary questions and weighted with a blackbox scaling function simply generate more business for survey firms The market research firms have an even deeper fear With the advent of email and analytical software leadingedge companies can now bypass the research firms entirely cutting costs and improving the quality and timeliness of feedback These new tools enable companies to gather customer feedback and report results in real time funneling it directly to frontline employees and managers This can also threaten inhouse market research departments which typically have built their power base through controlling and interpreting cu.

Loyalty Acid Test Fundraising Version Survey Template

This loyalty acid test survey template checks the commitment of your donors for charity or nonprofit organization These donor survey questions can be used to calculate the flow of funds and create a strategy to reach out donors This sample loyalty acid test questionnaire collects the feedback from donors and can be customized as per your.