May 18, 2009

How Loyal Are Consumers? Not Very

Repurchasing, Switching, And Making Recommendations Across 12 Industries

by Bruce D. Temkin

with William Chu, Angela Beckers

Executive Summary (This is a document excerpt)

We surveyed more than 4,500 US consumers to find out about the strength of their relationships with companies across 12 industries. Our analysis looked at three areas of loyalty: the willingness to make another purchase, the reluctance to switch business away, and the likelihood to recommend the provider. It turns out that retailers, as an industry, have the highest loyalty levels and TV service providers have the lowest. Our analysis also examined loyalty for 113 firms compared with their industry averages. Some findings: USAA, Southwest Airlines, and Apple have relatively high levels of loyal customers, while US Airways, Sprint, and Radio Shack customers are less loyal. Given that 30% to 40% of consumers aren't very loyal, there's enormous upside for customer experience efforts.

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