A fascinating new study published in the Harvard Business Review delves into how customer satisfaction relates to customer retention. In an article entitled The New Science of Customer Emotions, authors Scott Magids, Alan Zorfas and Daniel Leemon delve deeply into a fact that Gallup identified years ago: satisfaction is not enough to retain customers – it takes a “wow” relationship to forge customers who are not only loyal, but who become brand advocates.
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Watch
Link to this HBR video: The New Science of Customer Emotions
Glossary
- to reap the benefits of sth – to get something good as a result of your own actions
- to strive – make great efforts to achieve or obtain something
- to retain – continue to have (something); keep possession of
- lever – a means of pressurizing someone into doing something
- cornerstone – an important quality or feature on which a particular thing depends or is based
- to flourish – develop rapidly and successfully
- apparel – clothing
- to delve into sth – research or make painstaking enquiries into something
- to submit sth – present (a proposal, application, or other document) to a person or body for consideration or judgement
- break-even – a point in a business venture when the profits are equal to the costs
- churn (rate) – the annual percentage rate at which customers stop subscribing to a service or employees leave a job
- tenure – the period or term of holding something
- to tap (into) sth – to manage to use something in a way that brings good results
Watch and listen
Answer the questions below.
- How much more valuable are emotionally connected customers? (00:30)
- What are some common emotional motivators? (01:30)
- Who are “flourishers”? (04:10)
- What do Coca-Cola, Nike, Starbucks and Toyota have in common? (08:00)
Practice Makes Perfect
Fill in the blanks with the correct word. Go to Enterprise Engagement to find out more.
CLEANERS YIELD GAPS FORGE COMPELLED DELVE
A fascinating new study published in the December issue of the Harvard Business Review delves into how customer satisfaction relates to customer retention. In an article entitled The New Science of Customer Emotions, authors Scott Magids, Alan Zorfas and Daniel Leemon 1.______ deeply into a fact that Gallup identified years ago: satisfaction is not enough to retain customers – it takes a “wow” relationship to 2.______ customers who are not only loyal, but who become brand advocates.
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The report looks at which emotional drivers 3.______ the sort of loyalty and commitment that encourages consumers to spend more with a company, worry less about price and feel more 4.______ to share their enthusiasm with others. The study found wide gaps between feeling that a company is a good brand and feeling an emotional connection, finding many that are considered good brands don’t necessarily have high emotional connection scores.
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The companies whose brand satisfaction and emotional connection scores were the closest? BMW, Virgin Airlines and Charles Schwab. Most other brands highlighted – including Starbucks – had wide 5. ______ between the two scores. The authors provide considerable support for the economic value of having highly “connected” customers, and suggest that companies with a large gap between acceptance and connection have a significant opportunity to improve sales and profitability. Also, highly connected customers spend anywhere from 23% to 100% more than unconnected customers, depending on the product category. The authors found that emotional connectivity could affect purchases of products as run-of-the-mill as household 6. ______.
Answers:
1. DELVE 2. FORGE 3. YIELD 4. COMPELLED 5. GAPS 6. CLEANERS
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