Measuring and ‘predicting’ customer loyalty is a fascinating field.
This blog is inspired by the work and research of Burke Inc. www.burke.com
The usual triangle to calculate Customer Loyalty (repeat purchase) is:
1. Current Satisfaction
2. Willingness to buy again
3. Recommending the product to others
This Security Triangle is often thought of as 3 separate aspects;
Sales are often targeted on Customer Satisfaction,
but NOT Repeat purchase or Recommendations to third parties!
Sure Thing or “likelihood to buy” is the product of all three factors.
Let’s look at some scores
An account has a 7/10 score for all three areas
Current Satisfaction = 7/10
Willingness to buy again = 7/10
Recommend the product to others = 7/10
7/10 x 7/10 x 7/10 =343 /1000 or 34.3% or a poor score,
I wouldn’t bet my House or my Pension on you winning the business!
What happens if its 8/10’s?
8 x8 x8 = 512/1000 or 51% better that 50/50; a good bet but YOU NEED 8/10 in all three boxes!
What happens if its 9/10’s?
9 x9 x9 = 729/1000 or 72.9% you may well win 3 out of 4 times!
NOW you know why Account Management
(not Relationship Management)
is so important.
The sure thing is 10/10 in all three areas and nobody gets that!
So, there is no such thing in selling as a “sure thing” or a “lost cause!”
This rule applies to our competitors too.
You need 8/10 in all three boxes for a fighting chance
You have to SELL to Customer Satisfaction
You have to SELL to Customer Willingness to buy
You have to SELL to Customer Recommendations