Recently I began reading a book by Dennis Snow called Unleashing
Excellence. Dennis is a guy who knows customer service. He spent 20 years
managing and teaching in the Disney empire. I like Dennis’ philosophy that
customer service is much more than trying to get employees to smile and be
nice. It’s about building a business that has a service culture.
In the first few pages Dennis shares some important data. He
says Lexus has a 63% repeat purchase rate. Compare this with most auto
companies that typically have a 30-40% repeat purchase rate. That’s significant
loyalty. And, as Dennis points out, Lexus is well known in the auto business
(and beyond) as a service leader. They set the standard in that industry.
Oh, and here’s something else. Even though Lexus accounts
for just 2% of
overall revenue, they contribute 33% of its profits. Service produces loyalty
which can greatly enhance profits.
More on the link between service and loyalty:
finally seeing hard data proving the connection between customer experience and
customer loyalty, and what’s emerging is a growing emphasis on improving
In this post
at DestinationCRM.com they discuss several studies which show this link. In one
of them, by Bruce Temkin of Forrester Research, says:
we’ve done in this report is we’ve quantitatively tied together ‘change of
customer experience’ with ‘the change of some loyalty factors.'”
The report he mentions measured customer experience and
customer loyalty using quantitative factors. It showed a direct link between increased
loyalty and improved experience of customers. And customer experience is a
direct result of how customers are treated and the quality and appropriateness
of the product or service they receive.
helps show the value of improving customer service. It can have a measurable
impact on the bottom line and the health of an organization.