Building lasting relationships with customers is essential for businesses to be successful and grow in a competitive marketplace.
Most organizations will attest to the fact that it costs significantly more to acquire new customers than it does to retain existing customers. Building loyalty with existing customers also allows you to deepen your relationships and grow your share of wallet with customers.
To retain customers and build loyalty, businesses must make data-driven decisions and develop strategies based on direct customer feedback.
Conducting research with customers (both current and past) will allow your organization to take significant steps in improving customer loyalty. In this post, we’ll discuss some of the key benefits that come with using this type of research.
Benefits of Customer Loyalty Research
The benefits of conducting customer loyalty research are many, from learning more about customers to cutting down on churn. Keep reading to learn more about the benefits.
Benefit #1: Gain a Deeper Understanding of Customers
To better understand the needs, preferences, and behaviors of customers, it’s important to go directly to the source. Customer loyalty research taps into this by providing insights into customers' decision-making processes and what factors drive loyalty to your business.
The research insights will reveal why customers choose your organization over key competitors.
By gaining a deep understanding of customer preferences, you can implement changes to:
- Over-deliver on expectations
- Deliver more personalized experiences
- Mitigate potential pain points or barriers to usage.
Ultimately, all of this will help your organization retain customers and drive up loyalty.
Recommended Reading: How To Measure Customer Loyalty The Right Way
Benefit #2: Build Stronger Relationships with Customer Service
Customer loyalty research will help you learn more about the customer journey and identify the touchpoints most impactful to the customer experience.
For most industries, customers may be perfectly content with the day-to-day service they receive. However, there often comes a time when it’s more important than ever for customer service to deliver.
For example, let’s say a customer is experiencing issues with your products/services or has a problem they need resolved immediately.
A short experience with customer service can make or break a relationship, causing the customer to discontinue doing business with you or conversely, solidify their loyalty to your business.
To back this up, research shows that 89% of shoppers are more likely to purchase from a company again after a positive customer experience.
The research will help your business create and develop a customer-focused service strategy and a culture that leads to repeat transactions.
Deeply loyal customers who have had positive experiences during these critical moments have the most to say when it comes to promoting your brand to others.
Benefit #3: Prevent Customer Churn
In addition to identifying critical touchpoints, research can also be used to look backward and understand issues customers have experienced in the past.
Conducting research with past customers, who have stopped doing business or closed their accounts, will reveal issues that negatively impacted customer loyalty in the past, and allow you to make changes to prevent these issues going forward.
With this type of research, it’s important to use a third-party market research firm, like Drive Research.
We often find that internal coding done by employees or information collected from internal surveys can be misleading when it comes to understanding why individual customers stopped doing business. Often, customers want to avoid confrontation or don’t bother to reveal the real reasons they stopped doing business.
However, when past customers are assured anonymity and are talking to a third party, we find they are far more willing to be candid in their feedback.
Inevitably, some of the reasons for customers leaving will be unavoidable (such as them moving outside of the area), however, we almost always find that a significant portion of customers leaving could be prevented with minimal changes to a business strategy, messaging, or service.
Research Options for Improving Customer Loyalty
When conducting research into customer loyalty and retention there are several options. Take a look at these examples of research methodologies that can provide insight into customer loyalty.
#1: Customer Loyalty Surveys
A customer loyalty survey is the single most important type of research for an organization to conduct when looking to better engage their customers and prevent churn.
This type of research will establish a baseline for customer loyalty and satisfaction. Just as important, the feedback from these online surveys will help you understand what touchpoints and factors drive loyalty.
#2: Qualitative Research (In-Depth Interviews and Focus Groups)
Qualitative research can provide your organization with a much richer and more nuanced understanding of the customer experience. This type of research is invaluable when it comes to truly understanding what drives customer loyalty and identifying ways to improve it.
Conducting in-depth interviews or focus groups with customers allows you to ask “why” when it comes to customer behaviors and understanding loyalty to your business (or loyalty to competitors).
Experienced moderators at Drive Research will work with you to understand your key objectives and learn about your business. This allows the moderator to adapt the conversations based on themes that emerge during the discussion.
#3: Customer Experience (CX) Program
Using the customer loyalty survey as a starting point, an organization wanting to consider an ongoing research program can develop a thorough customer experience (CX) program.
The customer loyalty survey will identify which touchpoints are most critical and a CX program will be able to monitor these touchpoints on an ongoing basis.
This type of program will provide you with a continuous stream of data to see how experiences and loyalty change over time, and how changes to your business or the marketplace impact the overall customer experience.
By monitoring the critical touchpoints and sending out surveys (which can typically be automated), you can also create a red flag and trigger follow-up for customers at risk of leaving your business.
An ongoing research program like this will pay dividends and allow your organization to make data-driven decisions with the most up-to-date measurements of customer loyalty.
#4: Employee Satisfaction Research
At a quick glance, this research option might seem out of place in a list of methodologies focused on customer loyalty. However, we find employee satisfaction is strongly correlated with customer satisfaction.
Employees who are satisfied and engaged with their work are ultimately more empowered to assist customers and deliver better customer service at the right time.
Any company searching for ways to improve customer loyalty should strongly consider conducting employee engagement surveys to learn more about their workplace and work culture.
Wrapping It All Up
In the end, there are many ways to evaluate what drives customer loyalty and retention.
Research should be a key consideration for businesses looking to make fact-based decisions when it comes to their customer messaging, product or service enhancements, customer service optimization, and other strategies that impact the customer experience.
Contact Our Customer Loyalty Research Company
Drive Research is a full-service research firm and has teams who work on customer, employee, and market research regularly - with the objective of increasing customer loyalty.
If you’re interested in partnering with Drive Research to conduct customer loyalty research, contact us using the information below.
- Message us on our website
- Email us at [email protected]
- Call us at 888-725-DATA
- Text us at 315-303-2040
Chris Coville
As the Director of Research of Drive Research, Chris has 10 years of experience in the market research field and has completed projects with organizations across the globe. He was also named a 2017 40 Under 40 Award winner.
Learn more about Chris, here.
