RAPID Loyalty

Article on RAPID loyalty – click to download

Business growth depends on more than acquiring new customers. Challenging the claims of the Net Promoter® Score (NPS) that all you need to ask is a single survey question (likelihood to recommend), our research shows that companies need to include other customer loyalty questions that reflect two major opportunities for business growth through existing customers:

• Increasing customer retention/decreasing churn
• Increasing purchasing behavior

The RAPID Loyalty Measurement and Management approach assess the three components of customer loyalty: retention, advocacy and purchasing. The RAPID Approach includes three easy-to-understand indices that assess three critical components of customer loyalty:

• Retention Loyalty Index (RLI): Degree to which customers will remain as customers or not leave to competitors
• Advocacy Loyalty Index (ALI): Degree to which customers feel positively toward/will advocate your product/service/brand
• Purchasing Loyalty Index (PLI): Degree to which customers will increase their purchasing behavior

These three RAPID loyalty indices are useful for understanding the quality of customer relationships that accelerate business growth through new and existing customers. In a nationwide study asking over 1000 customers about their current network operator, these loyalty indices were predictive of business metrics across several US network operators (Alltel, AT&T, Sprint/Nextel, T-Mobile, and Verizon):

• RLI was the best predictor of future churn rate
• ALI was a good predictor of new customer growth
• PLI was the best predictor of Average Revenue per User (ARPU) growth

For more information about the RAPID Loyalty approach, please contact me.