This post discusses using a 2-dimensional segmentation of loyalty and engagement (or wallet share) as a means of brand research to identify how close your brand image is to your brand objectives, and which brand attributes will yield the most return on investment (ROI) in terms of driving customer loyalty and engagement or wallet share.
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Loyalty / Engagement Segmentation
1. Kinesis CEM, LLC
Loyalty / Engagement Segmentation
https://blog.kinesis-cem.com/2015/12/07/loyalty-the-foundation-of-brand-perception/
https://blog.kinesis-cem.com/2015/12/14/imageperception-a-mirror-to-your-brand/
https://blog.kinesis-cem.com/2016/01/06/beyond-loyalty-engagementwallet-share/
Eric Larse is co-founder of Seattle-based Kinesis, which helps companies plan and execute their customer experience strategies.
Mr. Larse can be reached at elarse@kinesis-cem.com.
http://www.kinesis-cem.com
kinesis-cem.com 206.285.2900 info@kinesis-cem.com
Loyalty / Engagement
Segmentation
2. Loyalty is the Single Business
Attribute with Strongest
Correlation to Profitability
Benefits of
Customer
Loyalty
Loyalty
Amortized Sales
and Acquisition
Costs Per Customer
3. Depending on the Industry:
Benefits of
Customer
Loyalty
5% Increase
in Loyalty
25% - 85%
Increase in
Profitability
4. Customer Experience Managers
Want to Include Loyalty in
Customer Experience Research
Customer
Experience
Measurement
Behavior Attitude
However…
Loyalty is a Behavior not an
Attitude
5. Surveys Best Measure
Attitudes
Behaviors Observed
Longitudinally Over Time
As a Result Researchers Use
Attitudinal Proxies for Loyalty
Behavior
Vs.
Attitude
Behavior Attitude
7. Typically NPS
Would
Recommend0 1 2 3 4 5 6 7 8 9 10
Customers segmented into 3 groups as a result of
their answer to the following question:
“How likely is it that you would recommend us to a
friend or colleague?”
(On a scale of 0-10, where 0 is “not at all likely” and 10 is “extremely likely”)
Detractors Promoters
However…
Any Likelihood of Referral
Question Will Work
8. Agreement with
Following Statement:
Customer
Advocacy
“You care about me, not just the
bottom line.”
(On a scale of 1-5, where 1 is “Strongly Disagree”
and 5 is “Strongly Agree”)
Agreement With This
Statement Strongly
Correlated with Loyalty
9. Some Researchers Just Ask NPS Alone
With No Other Questions for Context
NPS
Alone
Kinesis Believes This is a Mistake:
NPS Alone
Customer
Experience
Actionable
Research
Design
Customers who have agreed to
participate in the survey want to
give you their opinion.
NPS with no context will not lead
to any conclusions about how
customers feel about the brand.
10. Brand perception research should
produce insight beyond loyalty. It should
determine the extent to which customers’
impressions of the brand are aligned with
your desired brand image.
Insight
Beyond
Loyalty
Loyalty
Brand
Image
11. Brand
Definition
Adjectives
Statements
Ask yourself: what
personality characteristics
would you like your
customers to describe you
with? What adjectives
would you want used to
describe your brand?
In addition to describing
your brand personality with
adjectives, come up with a
list of statements that
describe your desired
personality.
13. Statements
What statements would we
want used to describe our
brand?
• We are easy to do business with.
• We are knowledgeable.
• We are like a trusted friend.
• We are interested in customers as
people, not just the bottom line.
• We are committed to the community.
15. Ask Customers for One Word That
Would Describe Your Company
Unaided
Top-of Mind
Compare
Responses
to
Adjective
List
This Will Determine How Close
Perceptions Are To Your Goal
16. Aided
Image
Ask Customers The Extent To
Which They Agree With Your
Brand Statements
Compare
Agreement
to
List of
Statements
This Will Determine How Close
Perceptions Are To Your Goal
17. Cross-Tabulate Brand Attributes with Customer
Advocacy and Would Recommend to Identify
Attributes with the Highest Potential in Terms of
Customer Loyalty
Attributes
With Most
ROI Potential
Highest
Potential
for ROI
Brand
Attributes
Customer
Advocacy
Would
Recommend
18. The Next Step Beyond
Loyalty is Determining
Engagement or Wallet
Share.
Engagement/
Wallet Share
19. Capturing Top-of-Mind
Comparisons to Competitors
Ask Agreement With….
Comparison to
Competitors• Their products and services are competitive
• They are more customer-centric
• They have lower fees
• They have better service
• They offer better technology
• They are more nimble and flexible
• They are more innovative