Abstract:

Collaborative and ongoing work between The Dow Chemical Company and Total Research Corporation over a number of years has explored how organisations who measure customer perceptions can convert this information into influencing how customers ultimately behave. The aim of this paper is to show how understanding what drives customer loyalty (rather than simply what satisfies customers), allied to effective market planning and deployment tools, can lead to successful business performance. The main themes covered include the definition and importance of customer loyalty; the establishment of a Loyalty Chain linking business activities to customer loyalty and financial performance; the measurement of customer loyalty and its drivers at Dow; customer information as the basis for action at macro and micro levels; the linkage between loyalty and purchase behaviour and its impact on selecting action priorities; and the importance of needs-based segmentation and Six Sigma tools for successful deployment.