Using Market Research to Optimize Customer Loyalty Author: Jim Knight
"Loyalty cannot be blueprinted. It cannot be produced on an assembly line. In fact, it cannot be manmade at all, for its origin is the human heartthe center of selfrespect and human dignity. It is a force which leaps into being only when conditions are exactly proper for itand it is a force very sensitive to betrayal." Maurice Franks (1929 2005), Oxford University professor. Leaders throughout the ages have aspired for the loyalty of their followers. To be a leader in business, a company should concentrate on building, and more importantly, maintaining customer loyalty. What makes a customer prefer Brand X over Brand Y, in spite of X's higher cost and similarity of quality with Y? What makes a customer recommend Brand Z to her friends without having any material incentive to do so? The answer is Customer Loyalty. That is why the customer loyalty program is such a popular strategy amongst companies. Customer loyalty is that Holy Grail that all businesses aspire for, but very few realize. Before setting up a customer loyalty program, there is a lot of study required to determine the why's, what's and how's. Here's where customer loyalty optimization comes in. Customer loyalty optimization is the procedure by which one can analyze the people, processes and products of the company, as well as its communication with customers, to come up with several loyalty drivers and risks that find out customer loyalty. Moreover, the optimization procedure involves recommending steps to maximize the aforementioned loyalty drivers and minimize the loyalty risks to create maximum value for the customer and the company. Comparisons with competitors and eventual evaluation of changes made are also part of the customer loyalty optimization procedure. As can clearly be seen, a lot of identification, collection and analysis of information is required in the entire system. This is done through market research. Market research,as defined by the ICC/ESOMAR International Code on Market and Social Research, "includes social and opinion research, [and] is the systematic gathering and interpretation of information about individuals or organizations using statistical and analytical methods and techniques of the applied social sciences to gain insight or support decision making." hence, market research is a needful to optimize the procedure of customer loyalty optimization.
Market research carried out for this ambition can be of two types depending on source of data primary and secondary. Primary research is information that comes directly from the sourcethat is, potential customers. A company can compile this information yourself or hire someone else to accumulate it via surveys, focus groups and other methods. Secondary research involves gathering statistics, reports, studies and other data from organizations such as government agencies, trade associations and the local chamber of commerce. Depending on the type of data collected, market research can be qualitative or quantitative. Customer loyalty may be intangible but will outcome in extremely tangible benefits for the company. Remember that "Customer is King", but in order to appreciate what the king wants, market research is a must. For more information, please visit: http://www.linkedin.com/pub/dir/Jeff/Savitz
Published on Oct 30, 2010
Customer loyalty optimization is the procedure by which one can analyze the people, processes and products of the company, as well as its co...