Measuring the effectiveness of customer relationships
Accenture conducted research with almost 24,000 customers globally who subscribe to and regularly interact with Communications Service Providers (CSPs) spanning wireless and television/video services, as well as digital platform brands, to measure their likeliness to stay with a brand for the long run.
The result is the “Keep Me Index (KMI),” which is designed around a set of relationship factors that measure how customers think, feel and talk about a brand:
- Instinct: What’s the first word or phrase that comes to mind when you hear this company’s name? Is the sentiment positive or negative?
- Dependence: Imagine the company is going out of business. How does that make you feel? Why?
- Trust: Is this a brand you trust? What do you trust and/or distrust the most? Are you confident that your data is safe with them?
- Perception: How happy are you with quality of service for price? Why?
- Voice of the customer: Do you talk about the brand? How often? Do you say positive or negative things?
Who has the KMI advantage?
In the race to establish a high degree of stickiness through effective, long-term customer relationships, who has the edge—CSPs or digital platform players? This year, for the first time in our KMI research, it’s pretty much a dead heat. On average, traditional CSP brands are catching up to digital platforms in their likelihood and ability to retain customers, with a more than 50 percent gain on digital-native competitors over the past two years.
What did we find?
- A shift from price to experience. In the last two Accenture KMI studies, price has been a primary influencer on customers’ likeliness to stay with a brand. This year, although price is still important, experience has become a more significant driver of brand connection and perceived value.
- More trust, more data. Customers who highly trust a brand are more willing to share their personal data—in fact, four times more data than customers who are lukewarm or actively distrust the company.
- Know me at a deeper level. We found that, although 72 percent of customers trust brands with their data, only 58 percent feel that brands are using their data to create personalized experiences. There is an opportunity for all brands to harness customers’ personal data responsibly, and to better use that data to create more hyper-relevant experiences and services.
- Double (and triple) down. Customers need more options to satisfy their specific needs. Our KMI research found that multi-service customers are twice as sticky (i.e., have a 2x higher KMI) than single-product/service customers. Furthermore, brands that generate strong dependence by offering variety and options experience a higher-correlated KMI.
Strategies to maintaining long-term customer relationships
Analysis of our KMI findings points to a three-tiered strategy for maintaining enduring, reciprocal and authentic relationships with customers.
- Establish trust
Trust is a valuable commodity. In fact, customers who highly trust a brand are more than twice as likely to stay with that brand for the next 12 months.
- Actively nurture
As with personal relationships, so it is with corporate ones: You can’t be passive. You must actively work at it. That means delivering compelling experiences, knowing customers at a deeper level, and being careful about data-sharing and using data to “personalize” offers.
- Grow together
Increasingly, brands can’t go it alone, at scale, at pace, and with agility. A better way to serve customers now is through partnerships. These can be with “unlikely” partners such as former or current competitors, or with a broader ecosystem within or outside their industry.