This Week's Herman Trend Alert

Leadership in Normal 2.0

  The Herman Trend Alert

December 14, 2011

Fascinating Implications of New (Internal and External) Customer Loyalty Studies

Just as loyalty towards green products and services has fallen victim to the continuing economic woes around the world, so has customer loyalty---both internal and external to organizations.

In a surprising report recently released by Right Management, 84 percent of the respondents to an online poll said they "plan to look for a new position in 2012". That number is almost double the number found by Randstad in their recent poll. Only seven percent of these "internal customers" said a move was "unlikely" or that they expected to stay in their current positions.

On the other end of the customer spectrum, in a recent survey of service providers, 66 percent of respondents believed that their (external) customers are less loyal today than they were two years ago. If service providers want to attract new subscribers in saturated markets, they will need to implement loyalty strategies to combat competitors' aggressive offers. Due to this market saturation and increasing competition, 82 percent of service providers said that customer loyalty programs would be "very important" or "important" over the next five years to their company's strategy.

Customer retention and loyalty can become a new center for growth, if providers understand what their customers really want and develop their offers accordingly. Customer retention and loyalty programs must be started early in the customer lifecycle; they are important during the entire relationship between service providers and their clients.

It is unwise to wait until after the fact when they have already lost customers. Moreover, two-thirds of consumers stated that "personalized and tailored services, proactive care, and rewards for being loyal customers" would earn their loyalty.

Applying this advice to internal customers, we highly recommend that employers conduct "stay" interviews, instead of waiting until people leave to conduct exit interviews. Wise (external) marketers will begin implementing "stay" interviews as well.

Both internal and external loyal customers are expecting more from their suppliers at every level; employees, contractors, wholesale businesses, retail consumers are all demanding more. Intensifying competition in the various marketplaces is driving increasing focus on what works to attract and retain these valued customers.

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