Press release
For immediate release: Friday, March 30th 2007
Establishing Customer Loyalty
Firms that engage their customers experience a significant competitive advantage, study finds
Companies have always tried to cultivate customer loyalty, but they can no longer do so just on the basis of quality or
price. Instead, they must engage customers by establishing a deep connection that endures over time. This level of
customer engagement is a strategic priority for achieving business success, according to Beyond loyalty: Meeting the
challenge of customer engagement, a new report from the Economist Intelligence Unit.
The report, published in two parts, is based on a worldwide survey of 311 senior executives conducted by the EIU for
Adobe Systems. Although most respondents realise the importance of customer engagement, few believe that their companies
are doing it effectively. More than eight in 10 executives believe their companies lose sales each year because of
failure to create engaged customers, and one in 10 estimates insufficient engagement accounts for 50% to 75% of lost
sales.
Only 13% of respondents believe their customers are very committed to their company’s products, but the majority of
executives believe that earning such a commitment is essential to the success of their business. More customer
engagement, they believe, would translate into improved customer loyalty (80%), increased revenue (76%) and increased
profits (75%).
“Executives are increasingly finding that the winning differentiator is no longer product or price, but the level of
customer engagement relative to the competition,” said Rama Ramaswami, the editor of the report. “Companies see that
there is a competitive advantage in going beyond traditional customer loyalty programmes to create engaged customers.”
Other key findings of the report include the following:
• Engaged customers offer a company important benefits. Seventy-nine percent of executives surveyed say that
engaged customers are very important because they recommend products and services to others; 64% say they are frequent
purchasers; 61% say they provide frequent feedback on products and services; and 55% believe they are less
price-sensitive.
• Technology is seen as providing important tools for building engagement. Most respondents identify technology,
such as electronic forms, Web sites and multimedia technologies, as important tools for creating engagement and believe
that they will be even more important within the next five years.
• Measurement is a major challenge in implementing engagement initiatives. In spite of executives’ enthusiasm for
creating customer engagement, 47% say that the difficulty of measuring customer engagement is the biggest barrier to
achieving greater levels of engagement.
“This survey reinforces what we have believed for a long time—the secret to success isn’t just about gathering or
churning data, it’s about how you connect with customers through the medium of their choice,” said Adobe CEO Bruce
Chizen. “Customers now demand information and interaction anytime, anywhere and through any medium.” He added that
engagement-enhancement solutions are available that not only enable companies to create, manage and deliver information
more powerfully, but also help them forge strong connections with their customers.
Beyond loyalty: Meeting the challenge of customer engagement, Part I and Part II
are available free of charge at www.eiu.com/AdobeBeyondLoyalty
ends