By John Hennessy
Writing for Inside 1 to 1, Elizabeth Clampet covers three companies who have elevated loyalty to the boardroom. HP, eBay and Wachovia Bank all have initiatives that focus executive level resources on customer loyalty.
HP has proven a linkage between an increase in loyalty and an increase in gross margin and market share in both the B2C and B2B sectors. According to HP SVP of Total Customer Experience and corporate affairs Diana Bell, "The key is to bake customer loyalty into everyday operations to maintain momentum."
HP's initiatives are driven by the Total Customer Experience (TCE) concept. To keep track of TCE, the company maintains a customer-loyalty index and conducts numerous surveys. In addition, customer loyalty is a long-term metric incorporated within HP's Balanced Scorecard. Executives receive bonuses based on how well they meet those goals.
Don Albert, senior director of strategic relationships for eBay says, "Buying a used car from a stranger over the Internet who's never seen the vehicle really requires a leap of faith. The connections members have are so emotional, so much so that they think of eBay as their company as much as we do."
eBay's executive-level commitment to build loyalty is reflected in a program that requires every employee in the North American division to call 20 members and talk to them about their issues. "It keeps us focused on gaining firsthand knowledge from our members," said Albert.
Wachovia Bank recently won the 2005 Brandweek customer loyalty award from Brand Keys. According to Gwynne Whitley, director of corporate customer service excellence, executive-level focus contributes to Wachovia's success.
Customer loyalty and associate metrics (churn, retention, acquisition, satisfaction scores) are the topic of a monthly meeting chaired by CEO Ken Thompson.
"We certainly must have healthy organic growth to be a successful company," said Whitley. "However, that comes from deepening and enhancing existing relationships you have with customers. We make our brand promise actionable by constantly finding ways to treat our valuable customer better."
Moderator's Comment: Is it important for a company's executives to focus on customer loyalty?
If the satisfaction of customers isn't a top priority in the boardroom, both the business and its customers are in trouble.
It's amusing that HP has "proven" a linkage between increased loyalty and increased performance. Thankfully, we don't have to take on faith any longer that satisfied customers who buy more, more often and refer others are good for business. - John Hennessy - Moderator