Is customer loyalty dead?

I respect the work and publications of Lior Arussy's Strativity Group. They recently conducted a study among 1,994 consumers in the US and Canada. The purpose of the study was to discover if customer loyalty is dead due to the challenging economic conditions that most consumers currently face.

• Their report revealed that customers are paying careful attention to the experiences they receive from companies with whom they conduct business, and are rewarding or penalising those companies accordingly. Some pertinent findings include the following:
• Share of wallet: More than 70% of consumers surveyed indicate that they are willing to spend 10% or more with businesses if those businesses exceed their expectations.
• Customer retention: Loyal customers are almost three times as likely to expect to continue doing business with companies for another decade or more than dissatisfied customers. Dissatisfied customers are 10 times more likely to expect to attrite during the next 12 months than their loyal counterparts.
• Premium pricing: 40% of loyal customers said they are willing to pay 10% or more to continue purchasing from companies delivering great experiences, in contrast with 9% of dissatisfied customers. Meanwhile, 52% of dissatisfied customers expect discounts of 5% or more to continue doing business with a company. Loyal customers do not expect discounts.
  

Although challenging economic conditions and a reduction in purchasing power have increased price sensitivities among consumers, many continue to demonstrate loyalty to those vendors that continue to provide exceptional customer experiences.

In the survey, customers were asked to rank their most important aspects of the experience. We then correlated these responses with their likelihood to purchase additional products and services from vendors. The aspects and touch points of the customer experience that are most likely to generate additional sales of products and services from consumers include the following:

• Quick and effective issue resolution
• Common sense and discretion
• Employees who exceed expectations
• Retail stores
• Call centers
  

Interestingly, the factor that did not make the aforementioned list is the self-service channel. While customers are willing to demonstrate loyalty to those companies that treat them well, they do not perceive the self-service channel as being a prominent factor in the overall customer experience.