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Focus on retention of new customers improves customer loyalty and company image
Increasing competition from strong catalog competitors and new sources, such as software suppliers and office superstores, threatened a leader in the Business Services industry. The company was challenged to maintain its reputation for high quality and customer service while protecting market share from lower-priced alternatives. The business services organization turned to Gantz Wiley Research to help them measure key drivers of customer loyalty.
Gantz Wiley Research developed a telephone survey focusing on current customers. The sampling plan included three customer segments: top customers, new customers and retained customers. The sample also included three acquisition sources. A competitive study was designed for customers from five competitive categories. Both studies focused on the small business market. Extensive statistical modeling was conducted to determine the impact of various product, service and process attributes on repurchase intent. Comparing the results from the two studies, competitive strengths and weaknesses were identified.
As with most companies, the study confirmed that new customers are less likely to repurchase than are other segments. The best way to protect and increase market share was to improve the retention rate of new customers, and to increase product depth with existing customers. The analysis identified several leverage points for new customers, including ease and convenience of the order process, hardware/ software compatibility and value for price paid.
Several initiatives were undertaken to improve new customer retention and the depth of relationship:
- Catalogs, website and other collateral promoted the variety of ordering methods/hours.
- Training for representatives focused on proactive suggestions for additional products and higher knowledge of promotional offers.
- Efforts were also focused on improving the order notification process.
When resurveyed the following year, satisfaction measures for new customers increased by an unprecedented 12 percentage points, while loyalty measures increased 5 percentage points. Awareness of product depth and related image measures increased by 10 percentage points.
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Gantz Wiley Research has worked with leading organizations across the globe. View our select client list.
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