The Experience-Loyalty-Value Connection
Author: Howard L. Lax
Howard L. Lax is vice president of consulting at GfK Customer Loyalty. He leads research and related consulting engagements centered on customer loyalty and experience.
SummaryThe buzz in the customer satisfaction world is all about the customer experience. Great customer experiences can help solidify customer relationships, while bad experiences can undermine customer relationships, increase churn and harm brand reputations through negative word of mouth.
Despite its importance, however, the customer experience is a means, not an end. Too often, companies view (and measure) customer experiences in a vacuum—good, bad, indifferent—and stop there. Instead, experiences need to be seen in the larger contexts of customer loyalty and business objectives. For marketers to make prudent decisions, customer experiences must be designed and evaluated in terms of their contribution to strengthening loyalty and creating value for the company.
Loyalty is a relationship-level concept. Regardless of the specific customer experiences, loyalty is more than the simple sum of all experiences. Every experience, however, is a link in the relationship chain, which is only as strong as its weakest link. These experiences can range from fleeting transactions, mechanical contacts or simple exposure to brand messages, to prolonged, multichannel interactions and “immersion” in the product, service or brand. Each and every experience is an opportunity to strengthen the relationship, to reinforce the relationship chain or to weaken and even undermine customer loyalty.
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