Consumer Insights on Customer Loyalty

I just read a white paper from Aberdeen Group on “Best-in-Class Marketers Drive Enhanced Customer Loyalty” (http://bit.ly/bQwDVn) that is full of statistics about how top-performing organizations demonstrate a significant emphasis on building comprehensive knowledge of their customers and prospects and have substantial evidence of their superiority as the result of doing so.

The white paper references six separate studies that compares the performance of “best-in-class” (top 20%), “industry average” (middle 50%) and “laggard” (bottom 30%). Needless to say, the “best-in-class” consistently outperformed “industry average” and “laggard” on the following metrics across the six studies:
– 11% improvement in customer acquisition for “best-in-class” versus a 2% and 4% decrease for “industry average” and “laggard.”
– 8% improvement in cross-sell/up-sell volume for “best-in-class” versus 2% and 1% for “industry average” and “laggard.”
– 8% improvement in customer retention for “best-in-class” versus 2% and 1% for “industry average” and “laggard.”
– 91% average customer retention rates for “best-in-class” versus 78% and 62% for “industry average” and “laggard.”
– 34% of “best-in-class” increased customer conversion rate versus 19% for “industry average” and 7% for “laggard.”
– 20% improvement in customer retention for “best-in-class” versus 9% and 0% for “industry average” and “laggard.”
– Average 70% return on marketing investment for “best-in-class” versus 33% and 13% for “industry average” and “laggard.”
– 9% average year-over-year increase in customer satisfaction for “best-in-class” versus an 8% and 2% decline for “industry average” and “laggard.”
– 91% average customer retention rate for “best-in-class” versus 59% for “industry average.” 98% of “laggards” did not measure customer retention.
– 16% average year-over-year increase in customer retention for “best-in-class” versus a 4% and 6% decline for “industry average” and “laggard.”
– 5% average year-over-year decrease in customer attrition for “best-in-class” versus 1% for “industry average” and a 5% increase for “laggards.”
– 22% annualized customer retention rate for “best-in-class” versus a 5% and 14% decline for “industry average” and “laggard.”
– 20% annualized online customer conversion rate for “best-in-class” versus 8% and 2% for “industry average” and “laggard.”

This compilation of research confirms that companies should recognize the importance of taking a 360-degree view of their customer. By doing so, customers benefit from better service and efficiency while sellers improve loyalty and generate additional revenue from repeat business.

The more disconnected and disorganized the data, the lower the likelihood that all customer-facing employees are operating on the same page and providing and accurate message to the customer.

Is your firm “best-in-class,” “industry average” or a “laggard?”

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About Insights From Analytics

Integrated marketing professional who generates insights from analytics to increase revenue. Daily blog now resides at www.insightsfromanalytics.com/blog.
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