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Customer loyalty and your bottom line

—October 21, 2013
Customer loyalty and your bottom line

Posted By: Craig Peterso

Everybody wants loyal customers.  Repeat business, peer recommendations and glowing online reviews are just a few ways happy, loyal customers can have a positive effect on your bottom line. Few businesses can maintain long-term success by consistently underwhelming their customers with subpar experience or service. You need to get them to ‘happy’, so that loyalty will follow.

Okay, so how do you inspire loyalty with your customer base?  And how do you even measure and monitor what customers are saying about their experience with your shop?

There’s three little words that, while not very romantic sounding for your loved ones, will go a long way in gauging customer loyalty:  the ‘Net Promoter Score’ (NPS).

The Net Promoter Score was developed by Fred Reichheld of Bain & Company.  It’s based on a single question:  “How likely is it that you would recommend this company to a friend or family member?”

Using a 0-10 scale on customer surveys, customers are identified as Promoters (9 and 10), Passives (7 and 8), or Detractors (0 to 6). The score is calculated by subtracting the negative responses (detractors) from the positive ones (promoters).  The higher your shops’ NPS score, the more “promoters” you have. 

Can you increase customer loyalty?

A few years back our group did an analysis of AutocheX phone survey respondents.  We identified four drivers of customer loyalty in the collision repair sector:

  1. Being kept informed
  2. On-time delivery
  3. Shop service
  4. Shop quality 

Our analysis revealed that ‘being kept informed’ had the largest correlation to whether or not a customer was willing to refer the shop to a friend or family member.  This very simple, incredibly valuable concept can often be overlooked in the repair process.  Customers who felt they were kept informed throughout the repair had Net Promoter Scores dramatically higher than those who were not kept informed (79.6 percent vs. -14.8 percent).  So if you’re looking for a simple solution to flip this problem into a benefit for your shop, keeping customers informed is your key to building loyal customers and turning them into your shop’s brand promoters.

This research, coupled with feedback from our shop customers, led us to develop our new product: Reputation Manager.  Reputation Manager is a suite of products that provides users the tools to manage their online brand, gain business insight from customer survey data and keep customers informed during a repair via email or text messages.

At Mitchell we take customer satisfaction seriously.  When you have a spare moment, take a look at Reputation Manager’s tools to monitor and benchmark customer satisfaction through traditional surveying as well as social media mining.

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