© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
TOTE-M Consumer Research
Report on Loyalty, (Potential)
Churn and Testimonials 2009
TOTE-M
Van Diemenstraat 314
1013 CR Amsterdam, the Netherlands
t +3120 420 77 80
e nl.info@tote-m.com
Index
 Introduction 3
 The use of Testimonials 11
 Financial Services 15
 Consumer Electronics 31
 Telecom Operators 47
 Conclusions & Recommendations 63
Copyright © 1994-2009 TOTE-M 2
Financial Services, Consumer Electronics and Telecom Operators 1

© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
TOTE-M Consumer Research
Report on Loyalty, (Potential) Churn
and Testimonials 2009
Introduction
About TOTE-M
 An independent management consulting firm in
Customer Management founded in 1994
 40 consultants, offices in the Netherlands and Belgium
 Partners: G-CEM, Smith+co, MarketResponse
 50% owner of ?Next! Coaches
 The number one partner for designing and implementing
personal, memorable and enduring customer
interactions
 Our clients recommend us because our consultants are
competent, independent and involved: NPS +31%
 Well known for our results, publications, research,
masterclasses, DOC and jury member of CRM Awards,
Introduction
PON/OM Outsource Awards, Global CEM Awards
Copyright © 1994-2009 TOTE-M 4
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
Our mission and vision
 Our mission is to create, facilitate and secure valuable
encounters. Success of our clients is central in reaching
this goal
 Our vision:
 The future belongs to organizations that are able to create
valuable and authentic encounters
 They have impassioned customers, employees and
shareholders
 Valuable encounters are personal, memorable and
enduring. The secret is the ‘click’
 Connecting the customer and the organization is
Introduction
fundamental for each valuable encounter
Copyright © 1994-2009 TOTE-M 5
Our brand values
 Personal
 From contact to relationship (CRM)
 Know your most important
customers
 Memorable Gratify
 From need to experience (CEM) Satisfy
PPG
Pain –
 Captivate your most important
Neutral
Pleasur
Bad e Gap
customers Horrible
 Enduring Orientation
 From moment to lifecycle (CLM) New needs
Purchase
 Bind your most important customers
Introduction
Problems
Use
Copyright © 1994-2009 TOTE-M 6
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
About the research
 This survey was conducted by MarketResponse among a Dutch
nationwide weighted sample (n=1.523). The minimum age of the
respondents was 16.
 The survey was conducted in accordance with the European research
guidelines (Esomar), which state that anonymity must be guaranteed
and that personal information may not be passed on to third parties.
 The survey was weighted by:
 Sex
 Age
 Household size
 Education
 Internet usage
The research focuses on three branches:
 Financial Services: retail banking sector
 Consumer Electronics: multimedia product vendors
Introduction
 Telecom Operators: (mobile) telecom, cable and internet service
providers
Copyright © 1994-2009 TOTE-M 7
Terminology
 Churn:
the number of individuals or items moving out of a
business over a specific period of time
 Loyalty:
the number of individuals staying at a business over a
specific period of time
 Testimonial:
a written or spoken statement about the virtue of some
product, service or brand
 First time right:
measure for the due date flawless delivery of a product
or service in that specific branche
Introduction
Copyright © 1994-2009 TOTE-M 8
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
Net Promoter Score (NPS)
 The NPS (Reichheld, 2003) is frequently used to gain insight
into customer loyalty
 The NPS method measures customer loyalty by:
 Asking ‘Would you recommend company X to your friends, colleagues and
relatives?’
 Scoring the answers on a 11-point scale (0 = absolutely not; 10 = yes,
absolutely)
 Calculating the net score by subtracting the number of 0 to 6 scores (the
detractors) from the number of 9 and 10 scores (the promoters)
Detractors Passives Promoters

 Recommending seems to be obligation-free, but in fact, it is
Introduction
not. Recommenders put their reputations at stake.
Copyright © 1994-2009 TOTE-M 9
Customer life cycle
This report is based on the TOTE-M customer life cycle model. This
model sequentially describes each step from the start to the
extension of the customer relationship and/or churn. This research
focuses on loyalty, (potential) churn and the use of testimonials
during orientation and (re)purchasing covering all phases.
Orientation
New needs
Purchase
Problems
Introduction
Use
Copyright © 1994-2009 TOTE-M 10
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
TOTE-M Consumer Research
Report on Loyalty, (Potential) Churn
and Testimonials 2009
The use of testimonials
Only a fraction of testimonial users actually write a
testimonial
Testimonial usage 0% 20% 40% 60% 80%
Non-users Users
Reads testimonials 66%
45%
55% Gives ratings 45%
Testimonials
Writes testimonials 6%
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
Testimonials about consumer electronics and
holidays are most popular
% of respondents who stated that they had recently read testimonials about:
60%
51%
50%
45%
40%
34%
30%
20%
15%
10%
Testimonials
0%
Consumer electronics Holidays Films, books & music Financial products &
services
Copyright © 1994-2009 TOTE-M 13
Testimonials: use, credibility, effect
 More than 30% of all testimonial users make a buying
decision based on testimonials
 Testimonials influence the higher educated almost twice as much
in their buying decision (44% vs 25%)
 Interest driven testimonial visitors (browsers) have almost the
same sales conversion (e.g. 38%) as visitors who use
testimonials for purchase orientation (seekers) (44%)
 Most popular sites: comparison sites, consumer organization
sites and online communities (telecom)
 Lower educated people give more online testimonies than
higher educated (24% vs 20%), but are more sceptical about
the independence of testimonials. They think that most
Testimonials
testimonials are written by manufacturers (56% vs 40%).
Copyright © 1994-2009 TOTE-M 14
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
TOTE-M Consumer Research
Report on Loyalty, (Potential) Churn
and Testimonials 2009
Financial Services
Orientation
New needs
Purchase
Main drivers of customer loyalty are: Problems
90% of customers
Use
were loyal to their
financial service
provider First time right
90%
Web testimonials 80% Customer service
70%
60%
Offer to new customers 50% Positive experiences
40%
30%
20%
10%
Personal Product features (e.g.
0%
recommendations the interest rate)
Company authority Company image
Financial Services
Brand experience Company PR
Involvement with
company
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
Orientation
New needs
Customers do not recommend their
Purchase
Problems
financial service providers: NPS = -47%
Use
Researched
53% brands include:
41% Postbank
Rabobank
ING
6%
ABN AMRO
Detractors Passives Promoters RBS
SNS
Fortis
AEGON
DSB
Financial Services
Copyright © 1994-2009 TOTE-M 17
Orientation
New needs
Purchase
Main drivers of potential churn are: Problems
Use
Complaints
70%
Welcome offer for 60% Product features (e.g.
new customers the interest rate)
50%
40%
30%
Brand experience 20% Customer service
10%
0%
Involvement with
First time right
company
Financial Services
Recommendations Company PR
Company image
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
Orientation
New needs
Potentially churning customers verify many
Purchase
Problems
characteristics:
Use
0% 10% 20% 30% 40% 50% 60% 70% 80%
Product features (e.g. the interest rate) 80%
First time right 78%
Customer service 76%
Previous experiences with the company 76%
Complaints 76%
Personal recommendations 74%
Company PR 73%
Company image 69%
Financial Services
Company authority 62%
Brand experience 61%
Involvement with the company 58%
Welcome offer for new customers 57%
Copyright © 1994-2009 TOTE-M 19
Orientation
The most frequently quoted sources of New needs
Purchase
information when potentially churning are Problems
internet and personal recommendations Use
Company authority
Customers get 40%
their information Offer to new customers Company PR
35%
from all sources,
but prefer the 30%
internet. Each 25%
source has it’s Other users' complaints 20% Customer service
own goals
15%
10%
5%
Involvement with company 0% First time right
Brand experience Product features
Television
Financial Services
Print
Previous experiences with the
Internet Price
company
Personal recommendations Company image
In-Store - face to face
Copyright © 1994-2009 TOTE-M 20
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
Orientation
New needs
Both usage and perceived reliability of online
Purchase
Problems
communities are low
Consumer Use
organization sites
100%
80%
60%
40%
20%
Online
0% Comparison sites
communities
Consumer
organization sites
are deemed very
reliable but
comparison sites
Financial Services
and company
sites are used as
Company sites well
Use Reliability
Copyright © 1994-2009 TOTE-M 21
Orientation
New needs
Purchase
I use testimonials: Problems
Only 15% of testimonial Use
users read testimonials
about financial services 0% 20% 40% 60% 80%
to find information about product quality 78%
to find the best product offer 75%
before I purchase the product 75%
to verify my preference 72%
to find price information 65%
to keep up to date 63%
to get new ideas 61%
to get more information about a purchased product 60%
to get more information about after-sales service 42%
when there are problems after product purchase 40%
during product purchase 39%
Financial Services
to base my product choice on 34%
after product purchase 21%
to get in touch with other users 5%
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
Orientation
New needs
Purchase
Main drivers of testimonial reliability are: Problems
Use
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
actuality 85%
Independency 76%
positive vs. negative reviews 71%
average review score 67%
length and detail of testimonial 59%
# of reviews 58%
language spelling 56%
site look and feel 41%
how I got there 34%
identification with author 33%
Financial Services
know who the author is 31%
Copyright © 1994-2009 TOTE-M 23
Orientation
Cost of change prevents switching between New needs
Purchase
financial services. Therefore churn ratio is Problems
low (10%) and mostly related to savings accounts Use
Postbank (19%),
0% 10% 20% 30% 40% Rabobank (11%) and
Interest rate 35% ABN AMRO (10%)
have the highest churn rates
Other
9%
users'complaints
Involvement with
7%
the company
Service 6%
Churned
customers
Company PR 6% are more
Welcome offer for
new customers
6% price
Personal sensitive than
4%
Financial Services
Recommendations
loyal
Brand experience 4%
customers
No choice 3%
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
Orientation
New needs
Purchase
Customers that churned are deal-sensitive Problems
Use
0% 10% 20% 30% 40% 50%
I switch whenever I can get a
42%
better offer for the same price
I switch only if conditions get
28%
really bad
I switch based on price only 12%
Spreading the
None of the above applies to
me
19% word:
30% of churned
Financial Services
customers share
their experience
Copyright © 1994-2009 TOTE-M 25
Orientation
New needs
New customers were strongly attracted by the
Purchase
Problems
interest rate (savings account)
Use
0% 10% 20% 30% 40% 50% 60% 70%
Interest rate 59%
Company image 16%
Positive experiences 15%
Personal recommendations 14%
First time right 12%
Brand experience 12%
Company PR 11%
Involvement with the company 10%
Financial Services
Customer service 9%
Welcome offer 9%
Positive web testimonials 2%
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
Orientation
New needs
New customers mainly made their decision
Purchase
Problems
based on:
Use
0% 10% 20% 30% 40% 50% 60%
Product features (e.g. the interest rate) 56%
Company PR 42%
Company image 42%
Customer service 42%
First time right 42%
Personal recommendations 36%
Company authority 36%
Brand experience 35%
Previous experiences with the company 34%
Financial Services
Welcome offer for new customers 29%
Involvement with the company 28%
Complaints of other users 26%
Copyright © 1994-2009 TOTE-M 27
Orientation
Internet was the channel most often New needs
Purchase
used to verify information to support the new Problems
choice, especially on price and product features Use
Company authority
40%
Welcome offer 35% Company PR
30%
25%
Users' complaints 20% Customer service
15%
10%
5%
Involvement with
0% Reliability of service
company
Brand experience Product features
The Internet is mostly
Financial Services
Television used for finding price
and product info
Print
Previous experiences with
Price
the company
Internet
Company image
Personal
In-Store
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
Orientation
Recently switched customers are slightly New needs
Purchase
better promoters than loyal customers: Problems
NPS = -17% Use
59%
29%
12%
Detractors Passives Promoters
Financial Services
Copyright © 1994-2009 TOTE-M 29
Loyalty and churn have different drivers
Potential churn drivers Loyalty drivers
Churn drivers New choice drivers
89%
First time right 12%
-26%
88%
Customer service -37% -6%
15% 87%
Positive experiences
75%
Product features -40% 59%
-35%
62%
Company image -15% 16%
-6%
59%
Company PR 11%
-19% -6%
10% 55%
Involvement with company -12%-7%
12% 52%
Brand experience -11% -4%
50%
Company authority 9%
47%
Personal recommendation -14% 14%
-4%
29%
Welcome offer to new customers 9%
-9%
-6%
Financial Services
2% 24%
Webtestimonials
Complaints -63% -9%
Forced switch
-4%
Copyright © 1994-2009 TOTE-M 30
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
TOTE-M Consumer Research
Report on Loyalty, (Potential) Churn
and Testimonials 2009
Consumer Electronics
Orientation
New needs
Purchase
Main drivers of customer loyalty are: Problems
Use
75% of customers
reported that they are
loyal to their consumer
electronics brands
Customer service
90%
Web testimonials 80% Positive experiences
70%
60%
Company authority 50% Price
40%
30%
Involvement with the 20%
10% First time right
company
0%
Consumer Electronics
Brand experience Product features
Welcome offer to new Personal
consumers recommendations
Company PR Company image
Copyright © 1994-2009 TOTE-M 32
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
Orientation
New needs
Customers do not recommend their
Purchase
Problems
consumer electronics brand: NPS = -35%
Use
Researched
brands include:
57% Nokia
39% Philips
Samsung
4% Sony
JVC
Detractors Passives Promoters LG
Siemens
Dell
Consumer Electronics
Compaq
HP
Panasonic
Apple
Copyright © 1994-2009 TOTE-M 33
Orientation
New needs
Main drivers of potential churn are:
Purchase
Problems
Use
Complaints
60%
Welcome offer to
50% Product features
new consumers
40%
30%
Brand experience 20% Customer service
10%
0%
Company image First time right
Consumer Electronics
Personal
Company PR
recommendations
Price
Copyright © 1994-2009 TOTE-M 34
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
Orientation
New needs
Potentially churning customers verify many
Purchase
Problems
characteristics:
Use
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Product features 84%
Price 84%
Customer service 81%
First time right 80%
Other users' complaints 79%
Personal recommendations 76%
Consumer Electronics
Previous experiences 74%
Welcome offer for new customers 71%
Company image 65%
Company PR 64%
Company authority 59%
Brand experience 56%
Involvement with the company 55%
Copyright © 1994-2009 TOTE-M 35
Orientation
Customers considering churn New needs
Purchase
mainly base their decisions on online Problems
information and the in-store service they receive Use
Consumers use many
sources, mainly
internet,
Company authority
recommendations and 35%
in-store are very Welcome offer Company PR
30%
important.
25%
Users' complaints 20% Customer service
15%
10%
5%
Involvement with the company 0% Reliability of service
Consumer Electronics
Television
Brand experience Product features
Print
Internet Previous experiences with the
Price
company
Personal
recommandations Company image
In-Store
Copyright © 1994-2009 TOTE-M 36
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
Orientation
Both usage and perceived reliability of online New needs
Purchase
communities are low. Problems
Comparison sites are most frequently used Use
Consumer
organization sites
100%
80%
60%
40%
Video sites Comparison sites
20%
0%
Comparison
sites are
widely used,
but consumer
Consumer Electronics
sites are
Online communities Company sites perceived as
more reliable
Use Reliability (very reliable)
Copyright © 1994-2009 TOTE-M 37
Orientation
New needs
Purchase
I use testimonials: Problems
Use
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
to find information about product quality 92%
before I purchase the product 90%
to find the best product offer 75%
to find price information 74%
to verify my preference 71%
to get more information about a purchased product 68%
to get new ideas 59%
during product purchase 54%
to base my product choice on 45%
Consumer Electronics
to keep up to date 44%
to get more information about after-sales service 43%
when there are problems after product purchase 43%
after product purchase 22%
to get in touch with other users 7%
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
Orientation
New needs
Purchase
Main drivers of testimonial reliability are: Problems
Use
0% 10% 20% 30% 40% 50% 60% 70% 80%
actuality 78%
independence 75%
# of reviews 71%
positive vs. negative reviews 66%
average review score 65%
language / spelling 61%
length and detail of testimonial 55%
Consumer Electronics
identification with author 33%
look and feel of the site 32%
how I got there 31%
know who the author is 29%
Copyright © 1994-2009 TOTE-M 39
Orientation
Actual churn is mainly driven by obsolete New needs
Purchase
product features Problems
Use
0% 20% 40% 60%
Product features 66%
Price of last choice 14%
Complaints 14%
Personal recommendations 9%
Customer service 7%
Company image 4%
Lack of involvement with the
3%
company
Consumer Electronics
Welcome offer for new
3%
customers
Complaints play Brand experience 3%
a far smaller
role in actual Provided by employer 3%
churn than in
potential churn
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
Orientation
New needs
Customers that churned are deal-sensitive.
Purchase
Problems
They want a better product for the same price.
Use
0% 10% 20% 30% 40% 50%
I switch whenever I can get a
better offer for the same price
45%
I switch only if conditions get Young people share their
really bad 21%
experiences with family and friends
during switches. Company image
also plays a important role in
My switching is based on price switching.
alone
14%
None of the above applies to me 20%
Consumer Electronics
Spreading the
word:
40% of churned
customers share
their experience
Copyright © 1994-2009 TOTE-M 41
Orientation
New needs
New customers were mainly attracted by
Purchase
Problems
product features and price
Use
0% 20% 40% 60%
Product features 56%
Price 40%
Personal recommendations 21%
Welcome offer 20%
Positive experiences 19%
Company image 14%
Web testimonials 12%
Customer service 11%
First time right 8%
Brand experience 8%
Consumer Electronics
Low-income consumers rely
more on friends and relatives
than do consumers with
a higher income
(27% vs. 6 %)
Copyright © 1994-2009 TOTE-M 42
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
Orientation
New needs
New customers mainly made their decision
Purchase
Problems
based on:
Use
0% 10% 20% 30% 40% 50% 60% 70% 80%
Product features 79%
Price 78%
Personal recommendations 59%
Previous experiences 52%
Company image 52%
First time right 51%
Customer service 51%
Brand experience 48%
Welcome offer for new customers 47%
Consumer Electronics
Company PR 40%
Company authority 40%
Other users' complaints 36%
Involvement with the company 33%
Copyright © 1994-2009 TOTE-M 43
Orientation
New needs
Internet and In-store were the primary sources
Purchase
Problems
of information for new customers
Company authority Use
35%
Welcome offer Company PR
30%
25%
20%
Users' complaints Customer service
15%
10%
5%
Involvement with company 0% Reliability of service
Brand experience Product features
Consumer Electronics
Television
Previous experiences with the
Price
Print company
Internet Company image
Personal
In-Store
Copyright © 1994-2009 TOTE-M 44
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
Orientation
Recently switched customers are better New needs
Purchase
promoters than loyal customers and have a Problems
positive NPS: NPS = 1% Use
67%
16% 17%
Detractors Passives Promoters
Consumer Electronics
Copyright © 1994-2009 TOTE-M 45
Loyalty and churn have different drivers
Potential churn drivers Loyalty drivers
Churn drivers New choice drivers
88%
Customer service 11%
-43%
-7%
85%
First time right 8%
-23%
88%
Positive experiences 19%
86%
Price 40%
20%
-14%
83%
Product features 56%
-44%
-66%
58%
Personal recommendation 21%
-20%
-9%
47%
Company PR -12%
49%
Company image 14%
-10%
-4%
43%
Brand experience 8%
-10%
-3%
46%
Welcome offer 20%
-10%
-3%
Consumer Electronics
36%
Company authority
40%
Involvement with company
-3%
31%
Web testimonials 12%
Complaints -54%
-14%
Forced switch
-3%
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
TOTE-M Consumer Research
Report on Loyalty, (Potential) Churn
and Testimonials 2009
Telecom Operators
Orientation
New needs
Purchase
Main drivers of customer loyalty are: Problems
Use
Customer service
90% of 90%
customers Web testimonials 80% First time right
stated that they 70%
are loyal to their 60%
telecom Involvement with the
50% Positive experiences
operators company
40%
30%
20%
Company authority 10% Price
0%
Welcome offer for new
Product features
customers
Telecom Operators
Personal
Brand experience
recommendations
Company image Company PR
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
Orientation
New needs
Customers do not recommend their
Purchase
Problems
telecom operators: NPS = -29%
Use
Researched
61% brands include:
34% KPN
T-Mobile
5% TELE2
Detractors Passives Promoters Ziggo
Vodafone
Pretium
XS4ALL
Planet
Telecom Operators
Copyright © 1994-2009 TOTE-M 49
Orientation
New needs
Purchase
Main drivers of potential churn are: Problems
Complaint Use
handling is
critical to avoid
churn
Complaints
60%
Changing employer 50% Price
40%
30%
Company image 20% Customer service
10%
0%
Annoyed by
welcome offer for Reliability of service
new customers
Telecom Operators
Outdated
Company PR
productfeatures
Personal
recommendations
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
Orientation
New needs
Potentially churning customers verify many
Purchase
Problems
characteristics:
Use
0% 10% 20% 30% 40% 50% 60% 70% 80%
Price 79%
Customer service 78%
Product features 78%
Reliability of service 77%
Users' complaints 74%
Previous experiences with the company 70%
Company PR 64%
Telecom Operators
Company image 61%
Welcome offer 60%
Company authority 56%
Brand experience 52%
Involvement with the company 44%
Copyright © 1994-2009 TOTE-M 51
Orientation
Main sources of information for potential New needs
Purchase
churners are internet and personal Problems
recommendations Use
Company authority
40,0%
Welcome offer 35,0% Company PR
30,0%
25,0%
Users' complaints 20,0% Customer service
15,0%
10,0%
5,0%
Involvement with the company 0,0% Reliability of service
Brand experience Product features
Telecom Operators
Television
Print
Internet
Previous experiences Price
Personal
In-Store Company image
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
Orientation
Comparison sites are preferred although New needs
Purchase
consumer organization sites are perceived Problems
as more reliable Use
Consumer
organization
sites
100%
80%
60%
40% Comparison
Video sites
sites
20%
0% The usage of online communities and
consumer organization sites
Online Company
Telecom Operators
communities sites
Use Reliability (very reliable)
is lagging behind their deemed
reliability
Copyright © 1994-2009 TOTE-M 53
Orientation
New needs
Purchase
I use testimonials: Problems
Use
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
to find information about product quality 82%
before I purchase a product 79%
to verify my preference 76%
to find the best offer 73%
to find price information 69%
to get more information about a purchased service 69%
to get new ideas 62%
to keep up to date 56%
whenever there are problems after product purchase 53%
during product purchase 52%
to get more information about after sales service 44%
Telecom Operators
to base my product choice on 31%
after product purchase 29%
to get in touch with other users 11%
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
Orientation
New needs
Purchase
Main drivers of testimonial reliability are: Problems
Use
0% 10% 20% 30% 40% 50% 60% 70% 80%
actuality 71%
independence 71%
average review score 67%
# of reviews 66%
positive vs. negative reviews 63%
language / spelling 60%
length and detail of testimonial 52%
identification with author 50%
Telecom Operators
how I got there 40%
site look and feel 30%
know who the author is 23%
Copyright © 1994-2009 TOTE-M 55
Orientation
New needs
Actual churn is mainly driven by price,
Purchase
Problems
complaints and product features:
42% of churn Use
0% 10% 20% 30% 40%
is related to
KPN
Price of former provider 39%
Complaints 22%
Outdated product features 20% Churned
customers are
Forced change (e.g. move) 10% more price
sensitive than
Friends Recommendations 10%
loyal customers
involvement with company 9%
Loyal young people are more
Customer service 8% influenced by friends than by
older people when leaving their
Company image 6% providers (30% vs 9 %)
Telecom Operators
Annoyed by welcome offer 5%
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
Orientation
New needs
Purchase
Customers that churned are deal-sensitive Problems
Use
0% 10% 20% 30% 40% 50%
I switch whenever I can get a better offer for
the same price 41%
I switch only if conditions get really bad 29%
My switching is based on price alone 20%
More than
50% of the
churned
None of the above apply to me 10%
Telecom Operators
customers
share their
experience
Copyright © 1994-2009 TOTE-M 57
Orientation
New customers were attracted by
New needs
Purchase
Problems
price
Use
0% 10% 20% 30% 40% 50% 60% 70%
Price 59%
Product features 16%
> 50% of the new
Welcome offer 15% customers were
attracted by price
Positive experiences 14%
Personal recommandation 12%
Reliability of service 12%
Company image 11%
Customer service 10%
Telecom Operators
Company authority 9%
Company PR 9%
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
Orientation
New needs
New customers mainly made their decision
Purchase
Problems
based on:
Use
0% 5% 10% 15% 20% 25% 30% 35%
Price 30%
Product features 28%
Customer service 21%
Recommendation 21%
Reliability of service 20%
Welcome offer 20%
Previous experience with the company 19%
Company image 18% Low-income consumers make a
decision based on previous
Company PR 17%
experiences more often
Company authority 14% than high-income
User complaints 13% consumers
( 29% vs 7%)
Telecom Operators
Brand experience 13%
Involvement with the company 12%
Copyright © 1994-2009 TOTE-M 59
Orientation
New needs
New customers mainly used internet as a
Purchase
Problems
source of information
Use
New customers
preferred to consult Company authority
online information 45%
during their Welcome offer 40% Company PR
decision-making 35%
30%
25%
Users' complaints Customer service
20%
15%
10%
5%
Involvement with company 0% Reliability of service
Brand experience Product features
Telecom Operators
Television
Print Previous experiences with the
Price
company
Internet
Company image
Personal
In-Store
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
Orientation
Recently switched customers are not very New needs
Purchase
enthusiastic about their new providers: Problems
NPS = -26% Use
62%
32%
6%
Detractors Passives Promoters
Telecom Operators
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Loyalty and churn have different drivers
Potential churn drivers Loyalty drivers
Churn drivers New choice drivers
Customer service 10% 90%
-31%
-8%
89%
First time right 13%
-30%
87%
Positive experiences 18%
83%
Price 56%
-33%
-39% 76%
Product features 28%
-22%
-20%
51%
Personal recommendation 16%
-12%
-10%
46%
Company PR 6%
-10%
42%
Company image 12%
7%
-6%
39%
Brand experience
37%
Welcome offer 21%
-10%
-5%
36%
Company authority 8%
33%
Involvement with company
-9%
Telecom Operators
28%
Webtestimonials
Complaints
-53%
-22%
Work related -7%
-4%
Forced switch
-10%
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
TOTE-M Consumer Research
Report on Loyalty, (Potential) Churn
and Testimonials 2009
Conclusions &
Recommendations
Conclusions – Testimonials
 25% of users repurchased, based on testimonials
 Higher educated are more influenced by testimonials
 Testimonials are mostly used for consumer electronics,
holidays and books & music
Conclusions
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
Conclusions – Financial Services
 More than 50% of customers are detractor of their bank
 Insufficient customer management is the main reason to
leave a bank
 NPS is not directly related to churn rate. Cost of change
prevents dissatisfied customers to leave
 Interest is an important criterion to choose
 Customer management will become more important in
the future, e.g. when account numbers can be
transferred to a new bank
Conclusions
Copyright © 1994-2009 TOTE-M 65
Conclusions – Consumer Electronics
 Customers are quite loyal to their brands in spite of a
high level of detractors
 Manufacturers have to keep their products up-to-date
 Loyalty is defined by the product and customer service
 Consumers have a multichannel approach for verification
when choosing or leaving a brand
Conclusions
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
Conclusions – Telecom Operators
 Customers are loyal, in spite of a high level of detractors
 Cost of change prevents customers to leave
 Switched customers are not more satisfied than loyal
customers
 Customer management is the most important driver for
customer loyalty
 New choices are strongly related to price and product
offering (e.g. phones)
Conclusions
Copyright © 1994-2009 TOTE-M 67
Recommendations
 Personal
 Active interactions on social media show your customers that you care about
their voice
 Take your customers’ social group into account when defining your social
media strategy
 Provide your customers with a personal, tailored service offering
 Memorable
 Use testimonials to see what moves your brand and to tune your promise,
products and services
 Surprise your customer by delivering service above expectation over all touch
points
 Enduring
 Tailor your social media strategy to each consumer life cycle stage
 Focus on customer experience to create loyal customers
Recommendations
 Flawless business processes reduce your operating cost level and have an
enduring positive impact on your customer value
 Maintain a competitive pricing and product/service offering to avoid churn
 Invest in your existing customers
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© TOTE-M 1994-2009 June 2009
TOTE-M Consumer Research Report on Loyalty, (Potential) Churn and Testimonials 2009
TOTE-M
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The Netherlands
T +31(0)20 420 77 80
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