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Increase Loyalty by Improving the Customer Experience

Is there a correlation between the customer’s experience and loyalty? The answer is yes and for many industries it is a very strong correlation. A study conducted by Forrester, examined the connection between customer experience and three components of loyalty:

  • Reluctance to switch business from a company
  • Willingness to buy another product from a company
  • Likelihood to recommend a company to a friend or colleague

Not surprising that the research found that across all 12 industries examined, there was at least a medium level of correlation between customer experience and loyalty. In many cases the correlation was much higher. Office Depot has the highest correlation between customer experiences and repurchase plans while US Airways has the highest correlation between customer experience and reluctance to switch. When Forrester compared the data with last year’s results, the correlation between customer experience and loyalty increased in every industry. Given the stronger connection between customer experience and loyalty, companies looking to increase sales, and build profitable customers relationships, need to focus on the customer.

So who delivers a good customer experience? Barnes & Noble took the top spot in the CxPi ranking, followed by USAA’s credit card business, Borders, Amazon and Costco. Healthcare, TV service providers and wireless carriers are on the bottom of the list. The CxPi is based on consumer evaluations during October 2008 across three areas: 1) usefulness; 2) ease of use; and 3) enjoyability. Listed below is the full report of companies ranked.

Customer Experience Index