Customer Loyalty & Retention
At ConStat we believe that customer retention and loyalty research represents the evolution of customer satisfaction research. All too often, companies that have focused on measuring and improving customer satisfaction have had little success improving customer retention and have found that even their most satisfied customers are susceptible to churn.
As a result of examining our clients' past customer satisfaction research, ConStat has determined that traditional customer satisfaction measurements fall short because:
- They are too narrow in focus, failing to capture all of the attitudes and behaviors that impact customer retention.
- They assess only levels of satisfaction rather than employing broader, more encompassing measures that capture customer loyalty.
- They are too rigid in construction, failing to account for the context and environment in which customers make product- and service-related decisions.
ConStat considers loyalty to be a broader, more complex phenomenon than customer satisfaction. Loyalty is based on a series of decisions that customers make in a variety of different situations and is influenced not only by a company's specific products and services, but also by the customers' interactions with the company's competitors and the general marketplace. With this in mind, ConStat has worked with our clients to identify three dimensions that we feel have a significant impact on loyalty:
- Performance of the Current Provider, or how customers feel about their current brand. This is the domain of traditional customer satisfaction research.
- Perceptions of Competitive Superiority, or customers' perceptions of what they expect to gain or lose by switching brands. Assumptions about the value of competitive offers can have a significant influence on loyalty, even when customers have not used competitive products or services.
- Marketplace Impressions, which involve the personal perspectives customers bring to decisions regarding their preferred brand. These impressions are created by the competitive environment and the customers' level of knowledge about competitive offerings.
These dimensions are central to ConStat's approach to customer retention and loyalty research and represent the interpretive framework that guides the research design and analysis in any work we do for our clients.