How loyal are your most loyal customers?
According to a recent study from Harvard Business School (HBS), the customers you think are the most loyal are often the first to cast you aside when a competitor challenges your service superiority.
I was surprised to find out after reading an article republished on Loyalty Today by Julia Hanna, Harvard Business School, “What Loyalty? High-End Customers are First to Flee“.
The research conducted by HBS, studied a large US domestic bank from 2002 to 2006 that operates in 20+ states. This study found that the service you provide can, and in many cases should, differ by market. Although challenging, it is important for companies to try and find the right balance between price and service across markets.
The study also concluded that even though high-end customers can be fickle, a company that sustains a superior service position in its local market can attract and retain customers who are more valuable over time.
“One prescription from all of this is that managers should avoid service complacency—or the tendency to rely on preexisting service advantages—and invest more in proactively increasing relative service levels when they’re faced with even the potential threat of increased service competition,” says Campbell.
You can read the full article here.
Excellent post! Loyalty isn’t something businesses just get. They have to earn it! To do so, a culture of service must be created. This video (http://www.upyourservice.com/video-theater/five-essential-problems-to-overcome-when-building-service-culture) offers some great insights on overcoming the obstacles that stand in the way of delivering loyalty-building service.