Project Scope: Customer Loyalty and Win-Loss Research

(part of Chapter 2: Defining Your Project's Scope)

 

While defining a project scope may seem like a daunting task, it really comes down to two things; knowing you want to get out of your project, and deciding how you’re going to get it.

It also helps to know some of the common language used to define market research studies. Read on to learn about customer loyalty and win-loss research.

 

Customer Loyalty

Customer loyalty studies are often considered a key strategic type of research that should be done on an annual—if not quarterly—basis.

Many large companies closely track customer loyalty to catch potential issues before they spread. Companies with smaller customer bases usually do these studies once a year.

In the past, we usually referred to customer satisfaction studies, but the vernacular these days more often centers on loyalty. The MR field learned over the years that satisfied customers aren’t necessarily loyal customers. Because the point of research is to find out how we can encourage desirable behaviors (like additional purchases, subscription renewals, or upsell opportunities), we want to uncover how to build and maintain loyalty. We want to know how to keep customers loyal so they will be unlikely to defect to a competing brand.

Customer loyalty studies can be designed to answer different types of questions, such as these:

• How does repeat purchase behavior for your brand vary by income level, gender, or household type?
• Among businesses, how do repeat purchase behaviors for your brand vary by company size, vertical industry, decision-making level, and years of experience?
• What types of customer service experiences are associated with increased loyalty?
• Does satisfaction with specific aspects of your product predict loyal behaviors?
• Does length of relationship predict loyalty? At what phases in the relationship are you at greatest risk for losing loyalty?

 

One last note about these studies: Many research firms conduct customer loyalty and satisfaction research, but there are also several firms that specialize in it. These firms have focused entire practices on such studies, and some have developed their own methodologies and frameworks for indentifying the factors that best predict satisfaction and loyalty measures.

 

Win-Loss Research

Win-loss research is another common category of MR study. It typically applies more to B2B research than to consumer research, though exceptions do exist.

Whether B2B or B2C, win-loss studies are typically designed to answer four questions:

• What factors most commonly lead to a sales win?
• What factors most commonly lead to a sales loss?
• How frequently do these factors occur?
• What steps can be taken to mitigate loss factors?

 

This is a kind of study that could be treated qualitatively or quantitatively, depending on how many sales you have: Is it enough that quantitative research is even feasible?

This type of study also has a unique aspect, in that it typically requires that you share with your agency the lists of customers who have either purchased from or chosen not to purchase from your company. The agency will want to talk to a good number of those who have selected your company as well as those who selected your competitors, so that it can understand what’s really driving wins vs. losses.

As an example, one such study that I did was for a client in the telecommunications industry. While this client had a lot of great information from its sales department on what the factors were, it needed an objective measure of how often each one was actually occurring. For example, it knew that it was more likely to win when a prospect valued one-stop-shopping. But it didn’t know how often this was leading to a win. Ten percent of the time? Or fifty? And if it was, in fact, a significant win driver, how could the client do a better job of using this to its advantage?

 

This is an excerpt from the book, "How to Hire & Manage Market Research Agencies," which is available on Amazon. Published by Research Rockstar LLC. Copyright © by Kathryn Korostoff. All rights reserved.