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Nearly Half of Executives Say Their Companies Don’t Deserve Customer Loyalty
Nearly half of executives polled say their companies don’t deserve customers’ loyalty, according to a year-long global poll of corporate chieftains by Strativity Group, Inc., a New Jersey-based management consultancy that specializes in analyzing and improving companies’ relationships with customers.
“The captain has turned on the ‘customer emergency’ sign,” says Lior Arussy, CEO of Strativity Group, Inc. “Even as companies spend millions on customer initiatives and customer relationship management software and declare the importance of listening to customers, many executives acknowledge their customers are becoming strangers,” he added.
Forty-five percent of executives surveyed in the U.S., Europe, Asia and Africa agreed their companies do not deserve customers’ loyalty.
“The captain has turned on the ‘customer emergency’ sign,” says Lior Arussy, CEO of Strativity Group, Inc. “Even as companies spend millions on customer initiatives and customer relationship management software and declare the importance of listening to customers, many executives acknowledge their customers are becoming strangers,” he added.
Forty-five percent of executives surveyed in the U.S., Europe, Asia and Africa agreed their companies do not deserve customers’ loyalty.
Fifty five percent agreed their companies do not conduct “true dialogue” with customers. Tellingly, 53.8 percent of executives agreed they do not meet frequently with customers.
The Strativity Group, Inc. survey of 165 executives was conducted during a global year-long tour providing customer experience management seminars to executives at the director or vice president level and above in the U.S., Europe Asia and Africa. Its findings included:
Companies and Customers Estranged - Just 37 percent of executives said they have the tools and authority to solve customer problems. “While companies are focusing on ways to generate more revenues from customers, the core of the problem is that the ‘core value proposition’ is diluted and undifferentiated. Not being able to deliver the required service is at the heart of the issue.” Mr. Arussy says.
More than half of the executives, 59.6 percent, agree that the role of the customer is not well-defined for the company. “Lacking a clear definition of expectations from customer relationships causes a great deal of waste and confusion,” Mr. Arussy notes. “Companies are selling to customers without knowing what they would regard as a successful relationship, and what relationship they should stay away from. Sadly, in 2004, companies don’t know whether the customer is the centerpiece of company mission and strategy – as corporate rhetoric says -- or merely a cash cow to be milked.”
In one startling finding, only 32 percent of executives say their compensation is tied to quality of service provided to customers, an important indication of customer-centricity.
Mr. Arussy’s prescription for the customer-company problem: “Customers make judgments based on company actions, not company slogans. Companies must link compensation to quality of customer experience to drive execution. And they must give executives real authority to address customer concerns, rather than offering pablum and placebos to customers when the relationship goes bad.”
“What use is a customer loyalty program -- or telling a customer he’s a platinum member -- when his or her frustration and alienation are building and the only loyalty is the company’s to its financial results?”
Other Startling Survey Findings
The Strativity Group, Inc. survey of 165 executives was conducted during a global year-long tour providing customer experience management seminars to executives at the director or vice president level and above in the U.S., Europe Asia and Africa. Its findings included:
Companies and Customers Estranged - Just 37 percent of executives said they have the tools and authority to solve customer problems. “While companies are focusing on ways to generate more revenues from customers, the core of the problem is that the ‘core value proposition’ is diluted and undifferentiated. Not being able to deliver the required service is at the heart of the issue.” Mr. Arussy says.
More than half of the executives, 59.6 percent, agree that the role of the customer is not well-defined for the company. “Lacking a clear definition of expectations from customer relationships causes a great deal of waste and confusion,” Mr. Arussy notes. “Companies are selling to customers without knowing what they would regard as a successful relationship, and what relationship they should stay away from. Sadly, in 2004, companies don’t know whether the customer is the centerpiece of company mission and strategy – as corporate rhetoric says -- or merely a cash cow to be milked.”
In one startling finding, only 32 percent of executives say their compensation is tied to quality of service provided to customers, an important indication of customer-centricity.
Mr. Arussy’s prescription for the customer-company problem: “Customers make judgments based on company actions, not company slogans. Companies must link compensation to quality of customer experience to drive execution. And they must give executives real authority to address customer concerns, rather than offering pablum and placebos to customers when the relationship goes bad.”
“What use is a customer loyalty program -- or telling a customer he’s a platinum member -- when his or her frustration and alienation are building and the only loyalty is the company’s to its financial results?”
Other Startling Survey Findings
- Forty-two percent of executives polled say they’ll take any customer that pays, as opposed to selecting customers with an eye on long-term successful relationships.
- Only 36 percent agreed their company invests more in people than in technology.
- Europe may be worse off: Only 36 percent of European respondents agreed their company deserves the customer’s loyalty versus 54 percent of U.S. respondents.
- Eighty two percent of those who strongly agreed that their compensation emphasizes quality of service strongly agreed that their company deserves their loyalty as employees.
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