Customer Experience Drives Loyalty

NEW YORK While it isn’t shocking that a positive customer experience leads to customer loyalty, Forrester Research’s new report shows just how crucial it can be. Forrester surveyed 4,500 U.S. consumers and asked them about their interactions with more than 100 brand-name firms.

It found a good experience correlates with a willingness to repurchase a product or service, a reluctance to switch and a likelihood to spread a positive word-of-mouth endorsement.

Among the companies surveyed, Office Depot and SunTrust Bank showed the highest correlation between customer experience and customers’ repurchase plans. Merrill Lynch, Hampton Inn/Suites, Sears and RadioShack followed.

In terms of overall categories, TV service providers, Internet service providers and banks showed the greatest link between the brand experience and whether or not customers would spend again.

“Since new customers are harder to come by in an economic downturn, firms need to pay even more attention to building loyalty with their most important customers,” wrote Bruce Temkin, author of Customer Experience Correlates to Loyalty. “If firms lose pace with competitors’ customer experience, they may end up attenuating the negative impact of the economic downturn.

The companies that showed the highest correlation between customer experience and a reluctance to switch were U.S. Airways/America West and RadioShack. This was most common among investment firms and medical insurers.

Charter Communications, an ISP, plus TV service provider Bright House and AAA insurance showed the highest correlation between experience and likelihood to recommend.