Results are priceless when it comes to proving the value of a customer satisfaction program to top management. Properly designed customer satisfaction programs demonstrate their value by linking customer satisfaction, customer-perceived value and customer loyalty to bottom line results. Linking customer data to financial results is key to proving a customer satisfaction program to skeptical managers and stakeholders. Quantifying a company's reasons for focusing on a customer satisfaction program and linking those reasons to increased customer retention, improved sales, market share and profitability will demonstrate the bottom-line benefits.

Increasingly, Burke is able to link customer satisfaction and customer loyalty to bottom-line benefits. By examining customer behaviors over time and comparing them to Burke Secure Customer Index® scores (SCI®), we see a strong connection between secure customers and repeat purchasing of products or services.

For example, we examined the relationship between customer satisfaction survey data and repeat purchasing levels in the computer industry. Secure customers in this industry were twice as likely to renew contracts than were vulnerable customers. Secure customers also were twice as likely as vulnerable customers to expand their business with their primary vendor.

As we've continued to look at cases across customer and industry types, we've found other compelling illustrations that show a connection between the SCI scores and financial or market performance. For example, Burke has found the average secure customer contributes as much as 61% more revenue at a 20% higher profit margin than the average vulnerable customer. These and other findings demonstrate the value of examining SCI scores not only across an industry but also over time within the same company to determine changes within the proportion of secure customers.

Your customers are one of your most significant assets. Like other valuable assets, customers represent an investment which must be managed to insure your financial return is maximized.

The key to successful management is securing greater customer commitment to your organization. Preventing your customers from defecting to your competitors is an important goal.

The first step is understanding how committed your customers are to you now and what you need to do to create more Secure Customers.

Distributors of a major industrial products manufacturer were classified as being Secure or Vulnerable based on their responses to each of the three items comprising the Secure Customer Index. Secure and Vulnerable distributors were then profiled on purchase volume and margin dollars for the manufacturer.

Distributors classified as Secure clearly contribute more than other distributors do to the business objectives of the manufacturer.

• Distributors classified as Vulnerable sell, on average, 21% fewer units of product than the average distributor.
• Secure distributors generate 11% more profit than the average distributor, on average.

• Customers of a major financial services organization were categorized into one of four categories according to their level of security, based on their responses to the three SCI questions. Each of the four categories was profiled in terms of the dollar volume of transactions with the organization, as well as the revenue brought to the organization.
• Service center territories were grouped into thirds based on their SCI scores, and the average profitability ratio of these groupings was examined.

1. Transaction volumes and revenues realized by the organization increase steadily as the level of customer security increases. On average, Secure customers -- those who are very satisfied with AND definitely will repurchase from AND definitely would recommend a company to others -- generate 20% greater transaction dollar volume, and 17% more per-account revenue, than customers in total.

   Customers classified as Favorable (but not Secure) also contribute above-average volumes of transactions and revenue.

   Customers with lower levels of satisfaction, loyalty, or advocacy for the financial institution are classified as either Indifferent or At Greatest Risk. These customers yield below-average transaction and revenue volumes.

   
   

2. Service center territories with relatively high SCI scores exhibit profitability ratios that are, on average, 5% higher than that of all territories. Territories with lower SCI scores exhibit below-average profitability.