Customer Engagement Index Drops 15% - Luxury Brands Remain Strong

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The 2009 Most Engaged Customers annual study, conducted by PeopleMetrics, reports a 15% drop in overall customer engagement, showing that companies are having a harder time engaging their customers. Luxury brands are best at engaging customers, but low price providers like Wal-Mart and Radio Shack are showing the biggest engagement gains since last year.

In today's economy, customers are focused on getting value for their depleting dollar. As such, the emotional connection consumers feel to discount brands that can help them do this appears to be on the rise

The 2009 Most Engaged Customers annual study, conducted by PeopleMetrics, reports a 15% drop in overall customer engagement, showing that companies are having a harder time engaging their customers. Luxury brands are best at engaging customers, but low price providers like Wal-Mart and Radio Shack are showing the biggest engagement gains since last year.

"In today's economy, customers are focused on getting value for their depleting dollar. As such, the emotional connection consumers feel to discount brands that can help them do this appears to be on the rise" said Kate Feather, Executive Vice President at PeopleMetrics and report author.

Despite discount brands making big strides, luxury still prevails. Brands like Ritz-Carlton, The Four Seasons, Cartier, Armani and even Coach are among the top ten companies when it comes to Customer Engagement.

2009 Most Engaged Customers Top 10

1. Ritz-Carlton
2. Google
3. The Four Seasons
4. Netflix.com
5. Cartier
6. Armani
7. Newegg.com
8. Wegman's Food Market
9. Coach
10. Costco

These top ranked companies respond quickly and effectively to service issues and understand the central role employees play in engaging the customer. For the most part, winning companies have fewer service failures, but the true differentiator is the ability to resolve problems successfully. Customers who feel that their problem was handled well are nearly as engaged as customers who never had a problem in the first place (49% versus 52%).

Top ranked companies also outperform the rest by acquiring high percentages of customers through recommendations. The 2009 Most Engaged Customers study is the first to reveal that the power of recommendations extends past the initial sale. The study showed that a referred customer is more willing to forgive a service failure if they chose that company on the strength of a friend or family member's recommendation. Nearly two in five customers who experienced a problem, and were referred, remain engaged. Contrarily, only one in four non-referred customers remains engaged after experiencing a problem.

Sean McDade, CEO of PeopleMetrics summarized the findings by stating that "The 15% customer engagement index drop shows that engaging customers in tough economic times is a particularly difficult challenge. Today's customers expect more for less. However, the top performing luxury brands in the study prove that it is possible to create engagement bonds that can withstand financial constraints."

About The 2009 Most Engaged Customers Study
PeopleMetrics conducted the second annual Most Engaged Customers study among more than 5,000 consumers of 81 companies across seven sectors: Airlines, Cable/Satellite TV providers, eRetailers, Luxury hospitality and retail providers, Traditional Retail, Search Engines, and Wireless phone providers. The market study was conducted during the last quarter of 2008.

Partnering with Greenfield Online, PeopleMetrics captured over 20,000 ratings via online interviews across the seven sectors. To ensure a diverse representation, PeopleMetrics and Greenfield reached out to a nationally representative sample of the US population. The final distribution of customers across main groups is within +/- 10 points of the U.S. Census figures.

About PeopleMetrics
PeopleMetrics helps organizations take the best actions to engage and secure their customers and employees. Our clients range from Fortune 100 to mid-sized organizations. We support them by capturing real-time feedback on customer and employee experiences and providing the insight and tools needed to increase engagement.

Since our inception in 2000, PeopleMetrics thought leadership, exceptional client service, and easy-to-use technology has helped hundreds of clients generate remarkable results.

For more information about PeopleMetrics or to purchase the 2009 Most Engaged Customer Report visit: http://www.people-metrics.com

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