Image: The Loyalty Index – Methodology for Measuring the Customer Experience

CONTACT US to discover how the Loyalty Index can improve your organization’s approach to measuring the customer experience, or read on for more details.

People

In this scenario, when using the term “people”, we are referring to those individuals within your organization that work both directly and indirectly to fulfill the needs of the Customer. Loyalty is often built upon the personal connections and emotional attachments that are made with an organization; your people are the ones that make this happen. Therefore, it is imperative to measure the importance that your resources play in the process of creating extraordinary Customer experiences.

In an ideal situation, the Customer becomes dependent on the Supplier resource team (Account Team) for support, and guidance indecision‐making. Trusted resources become the Customer’s “go-to” team in times of need.  In the absence of such a connection, a feeling of insecurity develops, and the Supplier organization is susceptible to competitive threats. As soon as things do not go as expected, according to plan or scope, the Customer can distance themself and seek out a new relationship that provides the support they require.

Sample PEOPLE measurements include:

	Do we understand your business?
	Are we providing guidance and best practices relative to your industry?

	Do we have integrity?
	Do we respond promptly to your needs and requests?

	Do we provide effective problem resolution?
	Are we willing and able to get things done?

	Do we make you feel like a valued Customer / valued partner?
	Do we conduct effective business reviews?

Business

In order for two organizations to work successfully with one another, there must be a positive, mutually beneficial (win/win) business outcome for both parties.  As budgets continue to be scrutinized, it is our responsibility as a Supplier to educate our Customers on the business reasons they engage with us as a strategic Supplier. Therefore, when we talk about the Business element of Customer loyalty, we are referring to the impact of having or not having this solution: Are we, as a Supplier, providing the Customer return on their investment, with a competitive advantage in their respective market? 

It is very important that as part of your standard business practices that you document the economic value that you provide to your Customers. The more people inside your Customer organization who understand and agree to the economic value you bring, the more “disciples” you will create, and the more loyal they will be.

Sample BUSINESS measurements include:

	How do our products and services perform (Quality / Performance)?
	Are we / solutions innovative?

	Are we easy to do business with?
	Do we identify solutions that offer your organization economic value and/or improve your market position?

	Do we provide your organization a return on the investment (ROI)?
	What is your likelihood to renew with our organization?

What is your likelihood to recommend our organization?

Organization

The Organization element of Customer loyalty is driven by the structural dependence the Customer organization has on the Supplier organization.  This metric is largely dependent on how the Customer and Supplier organizations align and fit together, beginning with commonalities in the vision, mission, values and overall culture. Do the vision, mission, values and culture complement each other?  Do their capabilities and/or infrastructures mirror each other? 

When organizational / structural dependencies exist between a Customer and Supplier, a common link is established that builds and/or further strengthens Customer loyalty. For example, once organizations outsource non-core operations, it becomes much more difficult for them to bring these functions back in-house, because the re-invention time is long, the investment is high and required expertise is scarce.

Although switching Suppliers is possible, it can be difficult, costly and risky. Building structural dependence by aligning Customer and Supplier organizations is among the most powerful elements of Customer loyalty.

Sample Organization measurements include:

	Do we effectively help to provide compliance with respective industries, policies, and regulations?
	Do we provide effective supply chain management?
	Do our distribution channels allow for flexibility of product supply?
	Are we providing innovation funding / payment options?
	Are we delivering projects, products, and solutions on time?