Ride or Die Buyers: How to Gauge Customer Loyalty

Your company’s success depends upon its customer base. You’ve created a desirable product, you’ve structured your customer service department, and you’ve set up a good system of CRM, so what’s next? A 2011 study by Adobe Digital Index showed that 40% of eCommerce business comes from just 8% of a company’s buyer base – the returning customers. Your customer loyalty rates can have a drastic effect on your sales and revenue, but it is often overlooked when planning out company strategies. So how do you go about encouraging and satisfying this group of customers?

There are three basic customer support metrics which will allow you to monitor and analyze your company’s success rate in the loyalty arena. The first of the bunch is the Customer Satisfaction Score, or CSAT. This metric is usually expressed as a percentage between 0 and 100%. The measurement for this metric is determined, by and large, with text-based buyer feedback surveys, containing questions similar to: “How would you rate your satisfaction with the product/service?” It can be tricky to get a truly indicative score using just surveys, however, considering the amount of buyers who opt to ignore that route. Many companies choose to conflate their responses from text-based surveys with other methods, such as verbal call backs, social media analysis, or product/service reviews.

The second metric is called the Net Promoter Score (NPS). This score is where you find the origin of the famous customer survey question, “How likely is it that you would recommend us to a friend or colleague?” It’s frequently offered with a 0-10 response scale, and helps a company to give a numerical measurement to its customer loyalty rates. Having a high NPS score in the 9-10 range usually means that your customer loyalty is at its optimum level – an enviable trait for any company.

The final metric is called the Customer Effort Score, or CES. This is primarily measured using survey questions like, “How difficult was it to handle my concern?” Customers are wont to return to a store which works for them, not the other way around. This metric gives you the ability to put a number-value on the ease of your customers’ exchanges with your company, which has a direct correlation to customer loyalty.

While they are separately able to provide different, valuable insights, all three of these measurements used together can give your company a good perspective on how loyal your customers are likely to be in the coming quarters. Because your returning customer base has such a huge impact on your profit, it’s a lucrative choice to put some emphasis on this in the future! After all, knowledge is power.


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