Let me ask you, do you know how loyal customers do you have? Are you using for example Net Promoter Score to measure the number of loyal customers? If not, then you are driving blind! Any company that knows their customer base and their loyalty can drive actions to make even more money. But those companies who are not measuring customer loyalty, can only guess what their customers think about them.
But let’s say that you are measuring customer loyalty and you can see that your trends are getting down. Basically, this means that you are having less and less loyal customers every year. As research over many years (for example by Forrester, Satmetrix and Bain & Co) has shown, customer loyalty is a future looking metric on company’s financial success. This means that your financial success is in negative trend also, meaning that you will run into financial challenges in next couple of years, if nothing is done to change the trend to be positive. And this is really dangerous situation, because average tenure of a CEO is around 2-3 years and that is also the time it may take for neglecting customer experiences today to show in the financial numbers in the future.
Any company who has identified negative trend in Net Promoter Score, Net Easy Score or Customer Satisfaction score should take it really seriously. It might not hurt you today, but I can promise that it will hurt you in the future. In these situations you need to do a root cause analysis to understand, why exactly your customer loyalty is going down and what needs to be done to improve it. This may require process improvement, system changes and developing managing practices.
Why is this so important for your business then? Like mentioned earlier, your future literally depends on it. When the company starts to lose customers and therefore money in next couple of years, your job may be on the line. And it will be very hard to turn that tide quickly, because customer loyalty is not only future-looking metric, but also it is lagged. The efforts you will take today will bring results in the future. And for this reason you should take the lead of customer experiences today and make sure you will prosper in the future also.
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