Predictive Consulting Group
Customer Strategy
Dramatically Increase Customer Acquisition,
Retention, and Profitability

Issue 8
June 2008

My daughter started driving this past week. I don't think I'll ever be the same again. Even though she's more responsible than I am in some areas, I can't help but worry about questions like, "Where is she?", "Is she safe?" or "When is she coming home?" I'm reminded of my childhood, when I thought my parents were "worry warts" who couldn't let go. My, how different things look from this vantage point!

In this issue, I've got some good information to share with you about customer service, satisfaction, and loyalty--all important aspects of an overall customer strategy!

5 Steps to Maximizing Customer Loyalty

Do your customer satisfaction and loyalty surveys tell you exactly what to do, right now, to keep your best customers from shopping around? Are you tiring of looking at monthly satisfaction and loyalty scores that you can't directly correlate with your sales performance? Are you sure that your initiatives to improve customers' experience and loyalty are focused where they'll make the biggest impact on revenue and profitability?

Last month I had occasion to speak with a small company that had been doing a regular customer loyalty study for a while. However, as I looked at their data, I realized that they were crippled and flying blind.

Customer feedback systems should be powerfully insightful and revealing, yet in my experience, they're often diluted, lacking the specificity needed to drive intelligent responses, giving insufficient weight to your most valuable customers, or worst of all, never show significant improvement due to lack of accountability.

In examining some of my recent client work (including Sun, Fidelity, Cisco, and Phillips Medical, to name a few), I've concluded that the best customer loyalty management programs share the following characteristics:

1.     Clear purpose enabling unambiguous interpretation of results, long-term tracking, and increased response rates

2.     Specificity that gives laser focus to your key customer concerns, enabling analytics that make loyalty information much more than an early warning tool

3.     A structured process for getting to the root causes of negative feedback, so that you can identify the changes that will have the greatest impact on bottom-line results

4.     Closed-loop implementation to streamline and align the issue-resolution process, and most importantly, keep the customer in the loop

5.     Well-defined organizational accountability for results, yielding both quick payback and lasting change

In partnership with my colleague, Tom Gormley, I've written a free whitepaper entitled, "Five Steps to Maximizing the Impact of Customer Loyalty on Your Bottom Line", which details these best practices. If you'd like a copy, drop me a line at and I'll send you a copy.

Keep an eye out in the next couple of weeks for an invitation to a webinar on the topic that will share anecdotes and helpful ideas on how to ensure that your customer loyalty programs incorporate these 5 keys to success.

The Sad State of Customer Service


This past week I posted on my blog a summary of some fascinating research from Accenture on the sad state of affairs in customer service. The report studied more than 3,500 global consumers and found that only 7 percent of U.S. respondents rated it "excellent," and 28 percent said it was "poor/terrible" to "fair."

Interestingly, 33% said their service expectations had increased over the last year. Particularly damning was the insight that globally, 47% of survey respondents said their expectations were met only "sometimes," "rarely" or "never."

Customers aren't just complaining, they are leaving. The hardest hit are retail, banks, and Internet service providers, with ~20% of customers in each of these segments indicating they've terminated a relationship because of poor service. The number of defections is much worse in developed and emerging economies, with 59% reporting that they quit doing business with a company due to poor service; Customers in China and Brazil were even more fickle with 85 percent and 75 percent, respectively, indicating they've left companies that aren't treating them well.

So what to do? The Accenture report recommends that organizations "incorporate the customer's perspective, values and actions into their business and operations strategy, and into their capability development and execution." What does this mean? It means that companies, now more than ever, MUST do the following:

1.     Differentiate their best customers from their worst. The Accenture report said that 71% of respondents said they expect "much" or "somewhat" better service when in exchange for spending or purchasing more frequently from a company. Clearly, some customers have higher expectations and if they are truly more valuable to the company, then it is worth working to meet their needs.

2.     Spend the time and the money to understand what their best customers truly value and find ways of delivering it to them. Without understanding customers' critical purchase & retention drivers, anything you do will be pure guesswork and won't move the customer loyalty needle. Improvement efforts not grounded in explicit customer research may, in fact, even damage loyalty.

3.     Tier their service levels to profitably offer the levels of service their customers value and are willing to pay for. Some customers are willing to pay for significantly greater levels of service. If they are, you owe it to them-and to your shareholders to provide it.


Publications & Events

Sales & Service Excellence published my article Roots of Real Innovation that postulates that innovation doesn't come from great leaders, pure research unfettered by customer needs, employee innovation programs, and even brand marketing. Instead, customers must be the primary source of innovation.

DM News recently ran an article titled, "Use data to handle the disgruntled" that describes the importance of prioritizing customers according to their value before you get into a situation where you need to handle a disgruntled customer. Not all customers are alike and your reaction might be the wrong one. You want to protect your best customers and address disgruntled customers according to their priority and service tier. You can read the article at my website.

I spoke on a panel at the recent IMCNE Thought Leadership Conference on the best ways to conduct customer and market research for maximum impact. This session received the highest reviews of all from attendees and conference organizers.


What is on your mind? How are you ensuring that you know exactly who your customers are, why they buy, and exactly what you need to do to ensure you keep them profitable for longer? Send me your questions and I'll answer them next month.

If you have an exemplary experience or story you'd like to share, send it along and I'll share it, too!


Curtis N. Bingham
Predictive Consulting Group

voice: 978-490-4697


Feel free to connect with me on LinkedIn:

Or you can follow me on twitter, @custmrstrategy

In This Issue
5 Steps to Maximizing Customer Loyalty
The Sad State of Customer Service
Publications & Events

CustomerStrategy is a free newsletter describing how business leaders can dramatically increase customer acquisition, retention, and profitability. It describes how to turn customer insight into competitive advantage, greater market share, & increased profits. Previous issues are available on our website (  in the newsletter archive.

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