05_Creating memories, or how to develop a long-term customer relationship

Knowledge about what to invest in when looking to generate long-term customer loyalty, is the basis for business growth and securing a competitive advantage for companies. Kantar’s TNS modern approach allows us to provide the answer to the question about what kind of experience is of key importance to the customer, and how to quantify it in order to maximise ROI.

Although customer satisfaction data (obtained in-the-moment) is important, unfortunately most recommendations drawn up on this basis fail to take into account the connection between instantaneous customer reactions and the long-term effect of their experience. In many areas the time span between the actual experience and the customer’s next interaction with the business is measured in months, if not in years. That being said, how is it possible that some experiences remain fixed in the customers’ minds for years, whereas others are totally forgotten? And how does that impact the customer relationship?

Behavioural economics suggests the people apply two filters when evaluating an event: first – the most intense moment of the experience, and second – the emotion that they experience at the end. Moreover, behavioural economics also indicates that in-the-moment experiences and the subsequent memories of these experience are not the same. Neuroscience, on the other hand, tells us that the brain marks particular experiences as important and saves them for later use only if they involve emotions. In view of that, understanding the background of these emotions is indispensable for being able to impact customer relations.

Relying on the principles listed above, TNS Kantar developed a customer loyalty and satisfaction gauge that has been tested among vehicle owners on the UK market, in the context of their most recent workshop visit. Our Key Performance Indicator for measuring relationship strength is the TRI*M index - built using two components – company performance and customer preference.  Assessing these two dimensions shows that the car brands’ current success relies on outstanding performance, but with a low preference score – which is a threat to company’s future business. Company performance is clearly significant as well – the higher it is, the stronger the relationship between the consumer and the brand. However, high general performance does not necessarily translate into repeat business. In our study, we were able to determine two customer groups by asking them ' How did you feel about your workshop visit?’.
- the first group consisted of customers who remembered feeling poorly about their visit.
- the second group was made up of respondents who remembered feeling delighted.

The first group was not delighted about their most recent workshop visit even though they’d evaluated their experience as excellent. However, the reasons for such high evaluation were very functional: ‘prompt service’, ‘the car runs well now’, or ‘no issues’ in general. Nevertheless, they didn’t mention any emotive experiences, which resulted in only an average preference for the respective car brand. The second group consistent of customers who felt delighted. They rated the general performance highly just like the first group, but what set them apart was high preference for the brand. The difference as compared with the first group was that the reasons for their satisfaction were much more emotional than functional, e.g.: ‘made to feel welcome', ‘well looked after’, ‘honesty and attitude of staff’, or ‘ lovely receptionist’.  This indicates that emotive experiences impact customers in a more profound and long-term manner.

The key conclusion from the study is that 50 to 70% of the strength of the relationship, which determined the customer’s subsequent decision, depends on brand preference, which in turns stems primarily from emotive experiences. Therefore companies interested in long-term relationship building (for the purpose of securing higher profits and a competitive advantage) don’t need to be the best all round. They need to keep in mind these three crucial issues:
1. In-the-moment experiences are not the same as the memory of the experiences, therefore it’s these memories that shape future customer behaviour.
2. Emotional perceptions form memories.  These then drive business impact as they influence a customer’s long-term company preference
3. Customers prefer companies that:
- deliver relevant market standards in line with their expectations
- offer emotionally stimulating experiences,
- are consistent in these two areas.

Please feel free to contact us:

Grzegorz Ostrowski – Client Service Director

grzegorz.ostrowski@tnsglobal.com