Companies Measure Customer Loyalty Poorly: Jupiter
Nearly half of consumers choose e-commerce sites based on word of mouth, but only 7% of companies can accurately identify these viral influencers.
Jupiter Media Metrix reported in a new study that identifying these loyal customers could reduce customer acquisition costs by 27% and increase average order sizes by up to 60%. Most companies define customer loyalty too narrowly, said Jupiter, and they overlook key measures of their customers’ behavior.
One of those measures is “viral” e-mail pass-along rates.
Instead, 63% of companies focus on monetary metrics, such as customers’ spending habits and order values. Just 13% of companies incorporate customer-satisfaction scores. This approach eliminates the lower-spending customers who may, nevertheless, recommend the site to a friend, which is a very low-cost means of customer acquisition for the company.
