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Customer loyalty has become something that is difficult to earn, tougher to demonstrate, and perhaps hardest of all to measure. Measurement was the task faced by the Temkin Group in its annual Temkin Loyalty Index (TLi). The survey of 10,000 U.S. consumers attempted to name the brands with the strongest loyalty not only in each of the 20 surveyed industries but also across the market as a whole, taking into account the customer loyalty at 294 total brands.
Looking at trends across industries, the index clearly demonstrates that customer loyalty is on the decline compared to the 2015 report. Exemplifying this decline in loyalty is the fact that only one industry—supermarkets—was able to earn a loyalty score in the “strong” range, while four others—Internet service providers, TV service providers, health plans, and wireless carriers were found to be on the bottom of the scale, in the “weak” range.
In measuring the strength of a brand’s loyalty, Temkin looks at five criteria, namely customers desire/ability to: repurchase from the company, recommend the company to those in their network, forgive the company for mistakes, trust the company both in terms of product and customer experience, and try new offerings from the brand. Combined, these criteria attempt to quantify the feeling of loyalty customers feel toward their favorite brands.
The strongest brands in these aspects, according to the index, include two grocery stores, H-E-B and Publix, as well as a financial services company, USAA. While the grocery outlets feel right at home atop a ranking of brand loyalty, USAA is unique in its vertical for the strong ranking it received, being named the company who most outperformed the scores of other brands within its industry.
Another notable name in the survey, this time for all the wrong reasons, is Starbucks. After the coffee shop made controversial and largely unpopular changes to its Starbucks Rewards loyalty program, it now finds itself, along with Motel 6, JetBlue Airlines, and GM, as a brand with the largest rate of decline in customer loyalty year over year. This plummet in loyalty further demonstrates that even the strongest brands aren’t immune to the fickle preferences of today’s consumer.
“Customer loyalty is getting even harder to earn, but it’s worth the effort if you get it right,” said Bruce Temkin, managing partner at Temkin Group. These words have never ringed truer than in the wake of these index results, which prove that customer loyalty is perhaps more valuable now than ever before.
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