Customer Service Attracts Loyal Customers

In a new 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 in this blog:

ServicePriceMatrix
Source: Forrester Research

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:
    • Willingness to buy: Credit card providers, TV service providers, Internet service providers, airlines, and insurance providers
    • Reluctance to switch: Airlines, TV service providers, insurance providers, and hotels. 
    • 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:
    • Willingness to buy: Banks, investment firms, and retailers.
    • Likelihood to recommend: Retailers, banks, and PC manufacturers.

The bottom line: Good customer service attracts more loyal customers.

Written by 

I am a customer experience transformist, helping large organizations improve business results by changing how they deal with customers. As part of this focus, I examine strategy, culture, interaction design, customer service, branding and leadership practices. I am also a fanatical student of business, so this blog provides an outlet for sharing insights from my ongoing educational journey.

Simply put, I am passionate about spotting emerging best practices and helping companies master them. And, as many people know, I love to speak about these topics in almost any forum.

My “title” is Managing Partner of the Temkin Group, a customer experience research and consulting firm that helps organizations become more customer-centric. Our goal is simple: accelerate the path to delighting customers.

I am also the co-founder and Emeritus Chair of the Customer Experience Professionals Association (CXPA.org), a non-profit organization dedicated to the success of CX professionals.

10 thoughts on “Customer Service Attracts Loyal Customers”

  1. Customer service plays an important role in an organization’s ability to generate revenues, and as such, customer service should be a fundamental part of any company’s “valued customer” approach. In fact, there’s an enormous body of research, which strongly indicates that customer satisfaction and loyalty; are major contributors to profitability.

    Thank you for sharing your knowledge and insight.

    Best wishes.

  2. Fascinating stuff Bruce – I think this provides even more evidence that companies need to be finding out from their customers why they have chosen them and /or are considering them.

    Knowing what your customers’ priorities are helps focus your efforts and resources accordingly. Sadly, too many buinsesses never ask.

    A simple question I like is ‘why do you buy from us?’

    Bruce (and anybody else!), have you got any better ones?

  3. Best customer service implies practices that bring in and keep clients. . It affects important brand and business objectives like customer satisfaction, loyalty and etc. I am definitely agreed that it is the key to attracting and maintaining customers, which leads to increased business and revenue.
    Business Answering Service

Leave a Reply