According to Chatham CEO Peter Starr, “Our analysis confirmed that firms that regularly solicit and incorporate client input achieved some of the highest levels of client satisfaction and loyalty seen in the industry."
Waltham, MA (PRWEB) March 9, 2011
A recent analysis conducted by Chatham Partners found that customer satisfaction rates for its Retirement Services clients reached a new high-water mark of 6.0 (on a 7-point scale) in 2010, eclipsing the previous high of 5.9 achieved in 2009.
The satisfaction increases observed among Chatham’s clients were driven, in large part, by their successful incorporation of “The Voice of the Customer” into their business and product planning protocols. Using market research conducted by Chatham, these firms were able to identify and improve the predictive components of excellent client service, such as reducing plan sponsors’ administrative burdens, providing exceptional client service delivery models, and improving plan performance through increased participant engagement.
Chatham also investigated whether these increases in customer satisfaction reflected a trend industry-wide or just among its clients. To determine this Chatham compared customer satisfaction ratings for its clients with a proprietary benchmark that the Company developed of the broader Defined Contribution market that is comprised of 21 providers, including 9 of the top 10 firms (ranked by Defined Contribution plans record kept), and represents 60% of Defined Contribution plans. The benchmark satisfaction score was 5.6 versus the 6.0 satisfaction score that Chatham’s clients achieved for 2010. This finding suggests that providers that listened to “The Voice of the Customer” by conducting market research achieved higher customer satisfaction levels in 2010 than the industry as a whole.
While improvements in customer satisfaction were notable, the increases in customer loyalty – the ultimate test of satisfaction – were even more impressive. Customers surveyed on behalf of Chatham's clients showed substantial gains in loyalty to their provider over the 2007-2010 period, with the percentage of customers defined as “loyal” rising from 53% in 2007 to 61% in 2010.
Chatham also compared the increase in loyalty ratings for its clients with the broader benchmark to determine if these improvements were typical for the industry as a whole. As was the case with customer satisfaction, the loyalty ratings of the benchmark providers paled in comparison to those of Chatham’s clients. 45% of benchmark customers were considered “loyal” compared to Chatham clients’ 61% loyalty rating.
Finally, Chatham measured client loyalty using the well-known Net Promoter methodology to test whether the results experienced by Chatham’s clients were unique to the industry in creating “Relationship Champions.”
The results illustrated that Chatham’s clients achieved a 59% “Promoter” rate, on average, with just 12% “Detractors” in 2010. In contrast, firms in Chatham Partners’ Net Promoter benchmark received a lower “Promoter” rate (49%) and had a higher “Detractor” rate (21%), again demonstrating that the loyalty increases were not an industry-wide phenomenon.
The results clearly indicate that incorporating “The Voice of the Customer” into a company’s products and processes can be a strong competitive advantage. Greg Burrows, senior vice president of Retirement and Investor Services at Principal Financial Group commented, “Chatham's research has consistently yielded critical insights that have helped us shape and deliver award-winning service and earn the highest levels of satisfaction and loyalty from our clients.” He added, “Listening to our clients and acting on their input is a core component of how we grow our business and stand-out in an increasingly competitive market.”
Similarly, Stig Nybo, President of Transamerica Retirement Services, remarked, “The client satisfaction research process that Chatham has developed and executed for Transamerica Retirement Services over the past eight years has helped us become a ‘best-in-class’ retirement service provider. ‘The Voice of the Customer’ has become an integral component of the strategic process throughout the entire organization, helping us retain and grow a loyal base of clients.”
Chatham’s Starr concluded, “We are pleased that our clients have achieved such positive results. This analysis underscores how important it is for companies to conduct comprehensive research about their customers’ wants and needs on an ongoing basis. Companies that have followed this strategy clearly have differentiated themselves from their counterparts and are well-positioned for future growth.”