Seller Beware:
The Curse of the Disloyal Customer
In the face of growing fickleness
among customers of all types
of companies, widespread
misconceptions obscure the nature
Seller Beware:
The Curse of the Disloyal Customer

Findings from a recent survey of
US and UK consumers

Accenture rese...
Figure 1: Satisfaction versus loyalty

Consumers are                                           Provider type             ...
wireless cell phone companies, followed     providers had met or exceeded                  Most consumers (94 percent) in ...
Figure 2: Actions consumers take when expectations are not met

Figure 4: Reasons consumers decided to switch providers in past year

Most consumers believe good
customer service should be a core
competency of the companies
with which they do business.

Demographic differences
to loyalty, it’s easy to overlook the                                                          Int...
Women and men generated
a high degree of consistency
in their responses to most
questions in the survey, with
a few notabl...
having problems corrected in a timely       Surprisingly, high-income respondents          that foster or erode loyalty—a ...
We believe the key is to develop
insight beyond current customer
behavior to create a branded
customer experience that
Figure 6: Multiple types of loyalty

Figure 7: Respondent Income Level
Seller Beware: The Curse of the Disloyal Customer 15
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Seller Beware

  1. 1. Seller Beware: The Curse of the Disloyal Customer
  2. 2. In the face of growing fickleness among customers of all types of companies, widespread misconceptions obscure the nature of loyalty, how it’s created and how to sustain it. Seller Beware: The Curse of the Disloyal Customer
  3. 3. Seller Beware: The Curse of the Disloyal Customer Findings from a recent survey of US and UK consumers Accenture research indicates that high frequently are misguided. In the face surveyed said they could be persuaded performance businesses outperform of growing fickleness among customers to switch or discontinue doing business others in their industries by mastering of all types of companies, widespread with a company they currently patro- specific capabilities—including those misconceptions obscure the nature of nize, depending on the incentive. marketing skills that create strong, lasting loyalty, how it’s created and how to Furthermore, nearly 60 percent said bonds with customers. Our research also sustain it. they had, in fact, decided to switch indicates that the ability to deliver a One of the most common mistakes or discontinue using at least one type consistent—and consistently satisfying— companies make is to equate customer of company included in the survey customer experience plays a key role satisfaction to customer loyalty. As a during the past 1 months. Those in in creating customer loyalty. recent Accenture survey of consumers in the United Kingdom are more likely Organizations that manage to create the United States and United Kingdom (6 percent) than in the United States loyal customers reap substantial illustrates, the two are not the same, (5 percent) to have switched or benefits. Loyal customers may also and any company that fails to recognize discontinued service. As well, more serve as company advocates, spreading this fact risks waking up one day to find individuals between the ages of 18 positive word about the company that its most satisfied customers switching and 54 and those with at least some strengthen its brand and make it easier to the competition. college education have switched or to convert prospects to customers. discontinued service in the past year. Customer satisfaction: a poor indicator of customer loyalty In short, customer loyalty improves the As if those findings are not discouraging bottom line and grows the top line. In enough for providers, nearly two-thirds— fact, without strong customer loyalty, According to a recent Accenture study 64 percent—said they are likely or even organic growth is extremely difficult (not of 10 product and service categories, very likely to switch or discontinue doing to mention costly) to achieve. However, customers in the United States and business with companies they currently loyalty often is misunderstood, and United Kingdom are a restless lot. A patronize. The companies most at risk companies’ attempts to strengthen it full 90 percent of the ,000 consumers include Internet service providers and Seller Beware: The Curse of the Disloyal Customer
  4. 4. Figure 1: Satisfaction versus loyalty Consumers are Provider type % indicating company met or exceeded expectations highly satisfied for the most part… US UK% Retailers 90% 89% Internet Service 82% 82% Home telephone service 74% 77% Hotels 78% 73% Utilities 77% 69% Banks 82% 61% Wireless/cell phone service 61% 68% Cable/satellite TV service 66% 59% Airlines 54% 66% Life insurance 57% 46% …but very willing Reason to switch % indicating would switch providers to switch providers if the incentive is right US UK All Any reason 88% 86% 87% Lower price 80% 77% 79% More reliable/better service 58% 58% 58% Better products 48% 46% 47% Offers suited to my needs 48% 45% 46% Access to a real person 34% 37% 36% More product choices 31% 29% 27% Rewards program 29% 29% 29% More accurate billing 20% 24% 22% 4 Seller Beware: The Curse of the Disloyal Customer
  5. 5. wireless cell phone companies, followed providers had met or exceeded Most consumers (94 percent) in both by retailers, hotels, airlines, and home their expectations. countries would be likely to take telephone service providers. Once again, action against companies that failed more of those in the United Kingdom However, any sense of accomplishment to meet their expectations: half of our (68 percent) than in the United States these companies take in meeting or respondents said they would buy less (61 percent) are likely to switch—and exceeding customers’ expectations or less frequently, or investigate the more than one-fifth of United Kingdom may prove fleeting, as it also appears competition’s services, while 69 percent respondents indicated they are likely from the survey that satisfied said they would share their negative to switch in eight of the 10 categories. customers do not necessarily mean experience with friends, family and People ages 18 to 54, those with a high loyal customers (Figure 1). colleagues, or switch to a competitor. income level, and college graduates For instance, while 8 percent of Encouragingly, 6 percent said they also showed a higher predisposition for respondents said their ISPs had either would communicate their dissatisfaction switching in the next year. met or exceeded their expectations, directly to the provider—at least giving These findings may not come as a respondents were more likely to have the company an opportunity to address surprise to some, given the increasing switched or discontinued ISP service the problem. ease—due largely to the Internet— during the past year than any other While companies that don’t satisfy with which customers access provider category—and they were most customers risk incurring customers’ wrath, product information, compare price likely to switch ISPs in the next year. the inverse is also true: Companies that and move their business from one Equally surprising was the reverse: inspire customer loyalty enjoy substantial provider to another. What might be Respondents were least likely to switch rewards (Figure ). About four in five surprising, however, is that these life insurance providers, even though (81 percent) survey respondents ,000 consumers also reported a life insurance was the category selected said they will continue buying from fairly high level of satisfaction with least often (57 percent) as meeting or companies to whom they are loyal. This many of their providers. When asked exceeding expectations. is particularly true among those aged to evaluate whether companies in a 40 and older, and those with at least a range of industries met or exceeded Many factors contribute to high or college degree. Approximately three in their expectations as customers, lower levels of industry churn—maturity, four (74 percent) respondents are likely approximately three-quarters or more level of competition and technology to recommend their favorite companies of our survey respondents reported substitution, to name a few—and to others. About half said they would favorable experiences with businesses these survey results do not reveal respond to “specials” or purchase more. in six industry categories: these underlying causes. They do, And nearly one-third indicated they however, show that the causal • Retailers received the most glowing would provide a personal endorsement relationship between customer reviews, being seen by 90 percent or share information with the company satisfaction and customer loyalty is of consumers as either meeting or about improved products or services. indirect and unpredictable—if it exists exceeding their expectations. at all. Furthermore, this study plainly Clearly, there are strong motivations for • Not far behind: Internet Service shows the disadvantages of tracking a company to continue striving for high Providers (ISP), cited by 8 percent. satisfaction alone as a management customer satisfaction—whether it’s to tool for predicting and managing get customers to buy more, spread good • Home telephone service providers future churn. words about the company, or simply to (76 percent), hotels (75 percent), avoid being blacklisted or disparaged by utilities (7 percent), and banks (71 In short, any company that believes former customers. percent) also were perceived by a that simply generating a strong level Why customers stick—or don’t large majority of consumers as of customer satisfaction will secure its meeting or exceeding expectations. customer base should think again. So what motivates customers to Beware a customer scorned • About six in 10 consumers were stay with one company while refusing satisfied by their experiences with to do business with another? What Our survey also showed why that would three of the remaining four types determines consumers’ interactions with be unwise. Adding insult to injury, some of companies—wireless telephone and attitudes toward their providers? respondents revealed themselves as not providers, cable/satellite television only fickle but potentially harmful to providers, and airlines—while slightly provider reputations (Figure ). more than half said life insurance Seller Beware: The Curse of the Disloyal Customer 5
  6. 6. Figure 2: Actions consumers take when expectations are not met US UK Total Share my negative experience with family and friends 68% 70% 69% Switch to a competitor 68% 70% 69% Communicate my dissatisfaction directly to company 63% 62% 63% Research competition's products and services 52% 51% 51% Buy less or not buy as frequently 52% 48% 50% Limit the information I would share with the company 18% 21% 20% Figure 3: Actions loyal consumers are likely to take UK UK Total Continue purchasing 82% 81% 81% Recommend the company to others 74% 75% 74% Respond to specials 50% 52% 51% Provide direct positive feedback 42% 34% 38% Provide personal endorsement 30% 32% 31% Share information with company for improved products and services 18% 21% 20% Contrary to conventional wisdom, products’ or services’ prices suit their in the decisions about which providers consumers are not compelled to stick budget has a strong or very strong to patronize and which to avoid. with a company based on such perks impact on their decision to continue For instance, 60 percent of all as loyalty cards and airline miles—at using a company with which they have respondents said they would be least according to our survey respondents. been doing business for at least a year. willing to switch providers for more And lack of knowledge about their Ominously, 79 percent of consumers reliable or better service, while 1 options is certainly no longer a reason said they would switch providers for a percent indicated that a company’s for consumers to stay with providers better price assuming the products or unwillingness to take sufficient actions they no longer favor: The once-arduous services are comparable, and according to meet their needs had a strong or task of seeking out and evaluating to 0 percent of respondents, their very strong impact on their decision to alternative providers is of a disincentive principle reason for switching providers stop patronizing a particular company. to switch as the Internet has given in the past year was that they found Furthermore, 4 percent noted that a customers a wealth of information at the same type of offerings elsewhere major factor in their decision to continue their fingertips. (See Figures 4 and 5.) for a lower price. using a specific company is that the Price tops them all. According to Finally, when asked to indicate what organization corrected problems in a our survey results, the most influential— companies that have failed to meet timely manner and in such a way that and probably least surprising—factor their expectations could do to keep the issues did not reoccur. in a customer’s decision is price. What their business, the largest percentage Incidentally, most consumers believe people pay for specific products and of respondents said the company good customer service should be a core services is far and away the most should offer products and services at competency of the companies with significant determinant of where lower rates than their competitors. which they do business, and should people shop and how loyal they are Service is another factor. Consumers are not be considered an “add on.” In other to those companies. adamant that how they’re treated and words, companies should not expect The largest percentage of respondents— the ease and speed with which their customers to bear the cost of improving 48 percent—said the fact that the issues are resolved play an important role service, as evidenced by the fact that 6 Seller Beware: The Curse of the Disloyal Customer
  7. 7. Figure 4: Reasons consumers decided to switch providers in past year Percentage of respondents who indicated this factor had a strong or very strong impact on their decision to switch. US UK Total Found the same offerings for lower price 41% 44% 43% Had a negative feeling about my experience 36% 31% 34% Another company offered more choices 34% 33% 34% Quality of offerings has deteriorated 34% 32% 33% Company did not go above and beyond to meet my needs 32% 29% 31% After giving feedback, offers did not improve 31% 28% 30% Company reps were not trained well enough to understand my needs 27% 26% 27% Weren't enough perks and awards for being loyal 18% 21% 20% Company did not have enough staff dedicated to my needs 18% 17% 18% I wanted to try something new 11% 8% 10% Figure 5: Reasons consumers have stayed with providers Percentage of respondents who indicated this factor had a strong or very strong impact on their decision to stay with providers. US UK Total Price of product or service suits my budget 47% 49% 48% I trust the company's offerings 50% 41% 45% Problems are fixed in a timely manner and do not recur 48% 37% 43% I had a positive feeling about my experience 43% 34% 39% I feel someone is always available to help 42% 32% 37% Company reps are well trained/understand what I need 42% 30% 36% Company goes above and beyond to meet my needs 39% 27% 33% Company is always trying to improve offering based on my feedback 35% 27% 31% I like their perks and awards for loyalty 23% 22% 22% It is too much of a hassle to switch 19% 23% 21% Seller Beware: The Curse of the Disloyal Customer 7
  8. 8. Most consumers believe good customer service should be a core competency of the companies with which they do business. The customer experience also plays 60 percent of survey respondents said ability to win customer loyalty, the a major role in loyalty. Consumers they would not be willing to pay more most important factor is mastering for better service from any of the types the development and consistent are unlikely to do business with a of companies studied. delivery of a branded customer company that, from their perspective, experience. In fact, our research found provides unpleasant interactions. In A third element of loyalty is trust. that this ability may account for our survey, 4 percent of respondents Many consumers surveyed place a high one-third of a company’s ability to said a negative feeling about their degree of importance in a company’s achieve customer loyalty. In Accenture’s whole experience with a company had credibility and in knowing that a experience, companies that embody a strong or very strong impact on their company’s offerings will perform as the key skills required to deliver the decision to terminate their relationship promised. When asked why they brand promise, day in and day out, with that organization. Conversely, continue to purchase products or are more likely to create a favorable 9 percent indicated that a positive services from a particular company, customer experience and, thus, build feeling about the customer experience 45 percent of respondents said it’s stronger customer loyalty. These skills had a strong or very strong impact because they have grown to trust the are predominantly people-management on their willingness to continue company’s products or services. skills—including ensuring that all patronizing a company. functions deliver the same branded But trust can be broken easily—such Tellingly, 6 percent of consumers experience, training all front-line as when a company solicits feedback said dealing with a real person when people completely and effectively, from consumers on how to improve its shopping or requesting service would and reinforcing the brand promise products or services, but seemingly be an incentive to switch providers. consistently across campaigns. fails to act on the input consumers give. The fact that survey participants cited In fact, 0 percent of respondents A company’s actual offerings the customer experience as a major said such a lack of credibility has played go a long way toward fostering factor in where they shop confirms the a strong or very strong role in their or undermining customer loyalty. findings of related Accenture research, decision to stop using a provider in the In all the discussion about how important which indicates that while multiple past 1 months. price, service, trust and experience are factors contribute to a company’s 8 Seller Beware: The Curse of the Disloyal Customer
  9. 9. Demographic differences to loyalty, it’s easy to overlook the Interestingly, Americans are more in loyalty critical role that the actual offering likely to share information about being purchased plays in keeping their unmet needs and requirements As might be expected, impressions customers coming back for more. As with the companies they are loyal to, of product and service providers our survey respondents told us, the while those in the United Kingdom vary—sometimes dramatically—by such state of a company’s product or service are more willing to provide information factors as age, income level, gender is a significant determinant of where to such companies on their hobbies and place of residence. they shop. Indeed, just under half of and interests. consumers surveyed said they would Country of residence Overall, a larger While there is little interest among be willing to switch to a competitor if percentage of Britons than Americans more than 60 percent of respondents the new company’s products or services have switched from any provider in the overall in paying more for better were “better” or more closely suited past 1 months. Respondents in the service, United Kingdom residents are to their needs. United Kingdom are less enchanted than more likely to pay extra for better those in the United States by banks, life Given that, it makes sense that one-third service from hotels and airlines. Those insurance companies and utilities—being of respondents said deteriorating product in the United States are more willing less likely to believe such companies quality strongly or very strongly influenced to accept additional fees for better meet or exceed their expectations, and their decision to stop using a particular service from wireless telephone less likely to think such companies are provider—or that approximately the same service providers. consistent in what they promise in percentage indicated a company’s their advertising and what they actually Americans are more willing to see constant efforts to improve products deliver. Moreover, a greater percentage a number of factors as having a based on customer feedback played a of UK residents reported being likely or strong or very strong impact on their significant role in their continuing to very likely to switch or discontinue doing decision to continue to patronize patronize the organization. business with these companies. particular providers, especially trust in the provider’s products or services; Seller Beware: The Curse of the Disloyal Customer 9
  10. 10. Women and men generated a high degree of consistency in their responses to most questions in the survey, with a few notable exceptions. 10 Seller Beware: The Curse of the Disloyal Customer
  11. 11. having problems corrected in a timely Surprisingly, high-income respondents that foster or erode loyalty—a gap manner; having a positive feeling about are just as price-sensitive as low-income more pronounced in some industries the overall experience of dealing with individuals. Eighty-four percent of the than in others. the provider; perceiving the company’s former and 78 percent of the latter Overall, older and younger respondents representatives to be well-trained and indicated they would switch providers expressed similar views on the types understanding customers’ needs; and for lower prices. However, high-income of companies that meet or exceed the company’s continuing to improve respondent are more likely to switch for their expectations, with two notable products and services based on the sake of superior service or products. exceptions: older individuals are customer feedback. High-income individuals are more likely more likely to say home telephone A much larger percentage of Britons to share negative experiences about a service providers, and less likely to than Americans believe the Internet company with their friends and family, indicate airlines, meet or exceed has made it easier to switch providers switch to a competitor if a company is their expectations. both by providing quick access to not meeting their needs, and to have When companies don’t meet their information on competitive products actually switched providers in the past expectations, older consumers are and services, as well as enabling year. Furthermore, wealthy respondents less likely to share their negative customers to sign up for services and are more likely than low-income experiences with friends and family or move their accounts online. participants to switch providers in the switch to competitors, and more likely next year—especially wireless telephone Gender Women and men generated to communicate their dissatisfaction service providers, retailers, hotels, a high degree of consistency in their directly to the company. Interestingly, airlines and life insurance providers. responses to most questions in the older people tend to be less price- survey, with a few notable exceptions. The low-income group is more likely to and service-sensitive than younger provide positive feedback to and share individuals, and few older respondents Women are more likely to switch providers additional information with companies reported a desire for greater product because of a lower price at a competitor, to which they feel especially loyal. On choice or better rewards program as negative feelings about the experience the other hand, a larger percentage of factors driving them to switch providers. with the existing company, and greater high-income individuals said they would Not surprisingly, a much larger percentage choice and product quality offered respond to such a company’s customer of younger consumers than older ones by competitors. satisfaction surveys. cited the Internet as a potent tool that makes it easier for them to switch Similarly, women are more likely to The factors that influence the decision providers when they are unhappy. continue using a company because its to stick with a provider or to switch prices fit their budgets, they trust the vary only slightly between the high- and In general, younger people seem to company’s products and services, and low-income groups. However, a greater expect more from companies—and they have positive feelings about the percentage of low-income respondents punish providers when they don’t overall experience. Women also were believe home telephone service providers, deliver. Younger consumers are more much more likely than men to stay with banks, and utilities exhibit consistency likely than older ones to have switched a provider because they valued its perks between their ads and what they providers in the past year—especially and rewards, and because they believed actually deliver. A smaller percentage banks and wireless telephone service switching was too big a hassle. of this group sees alignment between providers—and have done so primarily promises made and kept by hotels, because the companies failed to Income level When viewing the data airlines and life insurance companies. improve their offerings despite getting by the income level of participants, feedback from customers, and because we found a number of disparities in Age Finally, age definitely plays a role the companies did not go “above and responses between high-income and in consumers’ perspectives on product beyond” to meet customers’ needs. low-income individuals. and service providers. In general, Additionally, younger survey participants younger respondents tend to be more are more likely than older respondents to High-income respondents are more restless—ready to switch providers expect to switch providers in the next 1 likely than low-income participants quickly if not satisfied—whereas older months (70 percent versus 56 percent). to believe companies are meeting or participants appear more willing to exceeding their expectations—especially communicate with companies and When they are happy with companies, hotels, utilities, mobile phone service give them an opportunity to correct young people appear to be the better providers, airlines and life insurance mistakes. Furthermore, a noticeable customer. They are more likely than companies. generational gap exists in the factors older individuals to say they buy more Seller Beware: The Curse of the Disloyal Customer 11
  12. 12. We believe the key is to develop insight beyond current customer behavior to create a branded customer experience that taps into unspoken needs and hard-to-measure attitudes. products and services when they evolving consumer demographics— churn appears to be inherent to doing feel especially loyal to a company. have made customer retention more business; in this case, companies will Furthermore, younger people are more challenging than usual. Our survey have to deal with the loss and learn willing to share information of all clearly demonstrates the impacts these how to be prosperous in spite of it. sorts with companies to which they changes have made on consumers and When companies think about are favorably inclined, while older illuminates the factors that customers customer loyalty, they often frame people will limit their data-sharing to say will drive them to be more loyal. the issue as how do we keep customers responding to customer satisfaction What do companies have to do to from going to someone else? By surveys. meet customers’ needs? By researching approaching the challenge as a Interestingly, while younger people many successful companies—as well negative—something they must keep often are portrayed as skeptical as working with hundreds of other from happening—companies put the and cynical, our survey found little organizations—Accenture has gained focus on retention rather than loyalty, substantive difference between the a unique perspective on what it takes and management can easily come to perceptions young and old have of to increase customer loyalty. We view customer care as an annoying companies’ advertising. About equal believe the key is to develop insight distraction from its primary agenda. percentages of both groups felt there beyond current customer behavior to Companies should recast the issue is consistency between the promises create a branded customer experience in a positive context—how do we get made in companies’ ads and what that taps into unspoken needs and customers to want us more than the they actually deliver. hard-to-measure attitudes. alternatives?—to reflect the central role that loyalty plays in achieving organic Analysis and recommendations The concept of a lifetime customer is growth and profitability. quickly becoming a quaint remnant There’s no question that various of the past, and companies should As we learned from our survey, multiple changes in the business context— recognize that virtually any customer factors influence a customer’s decision including economic ups and downs, may switch to the competition at any to stick with a company or leave. Price increased competition and choice, and time. For some sectors, a high level of has the strongest influence, regardless 1 Seller Beware: The Curse of the Disloyal Customer
  13. 13. Figure 6: Multiple types of loyalty Category Brand Involvement Commitment High Low Habitual Category Defection Defection Defection Inertia Bias Conditional Emotional Bias Loyalty Risk High Risk High High Risk High High High Habitual Inert Emotional Low Low Low Loyalty Loyalty Grow Convert Manage Manage Habitual Maintain Grow cost base cost base Satisfaction Satisfaction Brand Satisfaction Loyalty Brand Catagory Commitment Manage Save De-prioritise Counter Manage Involvement Save High for competition cost base Low profitability Low Low Low Conditional Low Value High Low Value High Low Value High Category • Current • Current • Current Loyalty • Potential • Potential • Potential Conditional Fleeting Emotional Loyalty Loyalty Conditional Brand Loyalty of the type of provider or the customer’s effectiveness of employees in handing nature of a customer’s loyalty— country of residence, age, gender or their issues and understanding their combined with the expressed level income. Trust is also an important particular needs, and how far the company of satisfaction—paints a much clearer factor in why consumers select and will go toward meeting these needs. picture of which customers are at remain with specific providers. Forty- risk and why. By aligning this picture As key influences of loyalty, all of these five percent of our respondents cited with an equally clear view of current factors—price, trust, service quality and faith in a provider’s products or services and probable profitability, companies overall experience—must be considered as part of their decision to stay with can map a solid strategy for customer when mapping out a plan for finding the company. treatment. and keeping customers. But they should Service quality and the overall customer be considered in the context of specific Accenture believes the prevailing experience are strong influencers of customer relationships and clear goals definition of customer loyalty and the loyalty as well. Our survey found, for for these relationships: which relationships strategies for attaining it have been example, that nearly 60 percent of are profitable, for example, which ones oversimplified. Moreover, we believe consumers would switch providers could be more profitable, and which that traditional loyalty management to get better or more reliable service; ones are at risk. practices, which often focus on 4 percent have switched because of developing a sense of evangelical or Here, understanding what customers a negative experience; and 9 percent emotional loyalty in customers—may think about a company, its competitors continue patronizing a provider due not succeed in the long term. or their own desires is invaluable. to a positive feeling about the However, companies must avoid To be successful today, companies need overall experience. the trap of equating how satisfied a to recognise, grow and manage more Specific factors in these two areas customer reports to be with how loyal than one kind of customer loyalty with that may have a strong impact on the customer is. By itself, expressed more than one kind of strategy. customers include whether or not their satisfaction is a poor indicator of We believe the different kinds of loyalty issues are addressed in a timely manner, whether or not the customer is a can be understood by analyzing their whether or not these issues reoccur, the candidate for defection, or when. The Seller Beware: The Curse of the Disloyal Customer 1
  14. 14. Figure 7: Respondent Income Level US UK Total High 18% 24% 21% Medium 27% 28% 27% Low 43% 29% 36% Figure 8: Respondent Ages US UK Total 18–39 28% 33% 30% 40–54 36% 40% 38% 55 or older 33% 22% 28% Figure 9: Respondent Education US UK Total High school/secondary school or less 21% 23% 22% Some college/tech school 38% 32% 35% College/university or higher 41% 43% 42% distinct dimensions, including brand they are also less aware of the of loyalty is exhibited by which characteristics, market category and competition. customers—and craft and execute a customer’s individual loyalty drivers effective programs to ensure that • Emotionally-biased loyalty: and decision-making. A well-crafted the “best” customers become and Customers in this group are more strategy for building and sustaining remain emotionally loyal—will be a key likely to continue using the company loyalty takes all of this into account, determinant of market leadership and, or brand, even when personal and defines how the most profitable ultimately, high performance. circumstances—such as income or and potentially profitable relationships Method Accenture commissioned location—change. They are less likely align with these loyalty “segments”. to change behavior in response to the research firm ICR to survey Doing so allows a company to prioritize competitor offers, and generally hold customers in the United States and focus, and marshal its resources. strong positive beliefs and attitudes the United Kingdom about their loyalty • Conditionally-biased loyalty: about the company and its brand. toward specific industries and service Customers in this category are the categories, including the factors that It must be noted that gaining these most susceptible to competitors. They persuade them to switch or stay with insights into customers is itself a complex know what the competition offers and their providers. ICR surveyed 010 undertaking. A large percentage of how it compares with their current consumers in the United States and our survey participants indicated provider’s offering. They are also less United Kingdom via the Internet. The an unwillingness to share personal likely to be influenced by their current sample set was evenly distributed information with their providers—why provider’s brand promises. between the two countries and evenly they buy what they do, what needs divided between male and female • Inertia-biased loyalty: Customers in are unsatisfied, how much they would participants. More specific demographic this category are essentially passive. pay for new products and services and information on survey participants can They have limited knowledge of the so forth—even when they are loyal to be seen in Figures 7, 8, and 9. company’s brand, and are less likely these providers. In this environment, to recommend it to others. However, the ability to understand which type 14 Seller Beware: The Curse of the Disloyal Customer
  15. 15. Seller Beware: The Curse of the Disloyal Customer 15
  16. 16. Would you like to learn more? About Accenture Copyright © 006 Accenture Contact Accenture to learn how we All rights reserved. Accenture is a global management can help you achieve high performance consulting, technology services and Accenture, its logo, and by transforming customer contact. outsourcing company. Committed High Performance Delivered Visit or email to delivering innovation, Accenture are trademarks of Accenture. collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilize the right people, skills and technologies to help clients improve their performance. With more than 19,000 people in 48 countries, the company generated net revenues of US$15.55 billion for the fiscal year ended August 1, 005. Its home page is