1. A systematic approach to building strong customer relationships and long-term profitability Building Customer Relationships The i SKY Relationship Investment Model
6. Satisfaction Has Weak Link to Future Customer Behavior But Most Marketing Research Does A Poor Job of Predicting Loyalty JDP - CSI versus Customer Loyalty Source: JD Powers ■ Individual Auto Manufacturers (e.g. BMW, Toyota, GM) “ Ideal” relationship line if Cust sat is perfect predictor of repeat purchase % of customers who buy next car from same manufacturer as current vehicle Summative measure of product and service quality satisfaction at manufacturer level There is weak relationship between C-sat scores and repeat purchase.
7. The Relationship Investment Model Proves to be a Strong Predictor of Future Behavior So, what is it? And why is it Different?
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9. Commitment Is the Closest Thing We Have To A Perfect Predictor Of Future Behavior Customer Investment Levels and Customer Loyalty Relationship Investment Levels - a Better Predictor of Loyalty ■ Individual Auto Manufacturers (e.g. BMW, Toyota, GM) based on Cust Sat scores ● Location based on RS scores “ Ideal” relationship line if Cust sat is perfect predictor of repeat purchase Customer Investment strongly outperforms C-sat on predictive power of future customer behavior (e.g. repeat purchase)
12. Commitment Segmentation…Retail Case Study The Relationship Investment Model Delivers Brand Differentiation Dots are individual retailers. This is based on study of 5,000 consumers capturing customer attachment for each retailer. There is a lot of variance, meaning, there is ample opportunity to differentiate on personal and functional connections. Fully Invested Functionally Invested Uninvested Personally Invested
13. Does It Really Impact The Bottom Line?…Retail Case Study Invested Customers Deliver Greater Profitability We captured actual spend of 2,000 of the 5,000 customers interviewed for this retail study by re-interviewing them six months later. Actual $$ spent Willingness to pay more for the brand Fully Invested spend 3x as much
14. Does It Really Impact The Bottom Line?… Retail Case Study Invested Customers Deliver Greater Profitability Target brand's share of purchases during the time specified Actual number of visits to the brand's store
15. Saks RELATIONSHIP INVESTMENT Predictor Map Quick Checkout Stands Behind Service Friendly Employees Attentive Service Happy Employees Special Shopping Experience Organized Stores Easy to Return Merchandise Prices Carries Favorite Brands PERFORMANCE IMPORTANCE Variety of Merchandise Managers Quickly Resolve Problems Employees Easy to Find Underperforming areas negatively impact Saks Relationship Investment Strength and Profitability. The RIM model can answer the business question of which to address based on ROI.