Customer Loyalty Index – Managing expectations critical

Each year, the gap between what companies pledge and what customers want, grows wider.

According to Customer Loyalty Index (done by  Market Research firm Brand Keys) which surveyed over 16,00 customers, it was found that :

  • Customer Expectations have increased  dramatically across all categories
  • Customers expect to be thrilled as a matter of course!
  • Take bottled water, for instance – a highly indistinguishable category. Expectations for bottled water rose 8% in 2006! They felt brands in the category have to be more refreshing!!! How do customer expect bottled water to be more refreshing? They are unclear.
  • The gap between expectation and delivery is also to do with the category. In old fashioned packaged goods, it is easier to manage expectations but in technology related categories the expectations are ceiling high!
  • Then, there are categories that lie in the middle ground with  21st century technology and old world products like Airlines, Hotels  etc. Only Southwest and JetBlue gained a point in 2006.
  • Take credit cards, the top3 brands showed no movement. Credit card is a credit card and they have more than one in their wallets. That’s why rewards have become important.
  • Banking is getting highly commoditized. Every bank almost offers similar features. Why is Wachovia scoring better? Customer Service

Key take-away is that expectations need to be carefully controlled as promises. Download LoyaltyIndex06.pdf

thro’ Brandweek

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