A new study from Deloitte Research, entitled 'Making Customer Loyalty Real: Lessons from Leading Manufacturers, shows that customer-centric companies have significant financial advantages and are 60 percent more profitable than other companies.
The study, released August 12, indicates that customer-centric manufacturers -- who use customer relationships as their organising principle -- are more than twice as likely to exceed goals for growth and shareholder value than non-customer-centric manufacturers. The growth is attributed to the acquisition of new loyal customers, successful cross-selling to existing customers and by the development of broader, yet targeted, product lines.
In addition, it was claime that customers also help fuel growth through recommendations of products and services to others. Deloitte Research claims that this holds true across all industries and global regions, including North America, Europe and Asia-Pacific, and that customer-centric companies share several commonalities.
The study reveals that the companies use customer information to make products less expensively and with higher value; that they surpass competitors in performance, durability, features and other dimensions of quality; that they tend to have well-established customer-focused brand names, reducing marketing costs for new products; and that they leverage customer service feedback to improve product quality and tailor new product design.
David Brainer, principal of Deloitte Consulting, Manufacturing Practice, claimed that the automotive industry could benefit from the results of the study: "The automotive industry can receive one of the highest potential payoffs for customer loyalty, due to the magnitude of investments inherent to the business, " he said, pointing out that "there are long and expensive product-development cycles, huge investments in factories and technologies, and costly dealership structures.
"Since most people rely heavily on past personal experience for big-ticket items, customer loyalty means high profits," he added, warning that non-customer-centric manufacturers will find it impossible to stay ahead of the competition.
Steven Green, vice president of Finance and Business Operations, Pitney Bowes Mailing Systems, remarked that "there is no doubt that automating our sales force has allowed us to deliver outstanding, tailored service to customers next door or across the country."
Brainer also pointed out that e-business can play a large role in integrating the touch points a customer has with a company. "Our study reveals that less than 20 percent of manufacturers currently have e-business capabilities," he said, "so manufacturers have a long way to go."
The Deloitte Research study was the first-ever in-depth global study of customer loyalty in manufacturing, and surveyed 900 executives in 35 countries.
|Deloitte Touche Tohmatsu