Linking Customer Loyalty to Growth Case Solution & Answer

In recent years, researchers and consultants have suggested a number of measures clients to explain the links between customer behavior and growth. However, these efforts have generated more smoke than heat. Despite claims to the contrary, the authors argue that the most popular parameters showed only modest growth correlations. None of them seems to be universally effective in all competitive environments. Metric of our first customers have tried to explain why people buy. For many companies, is down to marketing. However, as the authors explain, the issues that affect customer loyalty are complex and go beyond the standard marketing. This led to a new category of indicators to understand the customer experience. While managers have learned much about the components of service quality (including reliability, responsiveness and empathy), the approach does not point to specific actions managers t. In the early 1990s, many managers began to pay more attention to customer loyalty – in particular understanding the dissatisfaction and satisfaction. But, as the authors point out, the relationship between satisfaction, customer behavior and the positive financial results have been modest. Today the most popular, the Net Promoter Score measurement focuses on how the word of mouth customer – both positive and negative – can foster growth. Powered by Bain & Company consultant Fred Reichheld Inc., which has the ability to predict the future growth of customer responses to a question: “How likely are you to recommend this company to a friend or colleague?” The authors found that the relationship between the SNP and the outcome of the client’s behavior was modest at best based models models NPS outperformed most consistent way from variables. The authors are skeptical that there can be a measure that multiple complex constructions of one or two dimensions, where appropriate, are reduced write, “there is a good chance that ignore one or more important aspects of the equation.”
by
Timothy L. Keiningham,
Lerzan Aksoy,
Bruce Cooil,
Tor Andreassen Wallen
Source: MIT Sloan Management Review
9 pages.
Publication Date: June 1, 2008. Prod #: SMR287-PDF-ENG
Linking customer loyalty to solving cases of growth

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