Amazon tops loyalty charts

21 April 2011

NEW YORK: Amazon, Kohl's and Costco are the companies with the most loyal customers in the US, a study has revealed.

Consultancy the Temkin Group surveyed 6,000 adults about 143 major corporations spanning 12 sectors - and tracked three criteria: a reluctance to switch away from the product concerned, a willingness to buy additional goods and services delivered by the same provider, and the likelihood of recommendation.

Just 17% of the featured organisations received a rating that was either "very strong", equating to an evaluation topping 60%, or "strong", falling between 50% and 59%.

The other operators assessed fell below this benchmark, and thus came in the "moderate", "poor" or "very poor" categories.

"The overall story was not very good. Nearly half of the companies received 'poor' or 'very poor' ratings," Bruce Temkin, managing partner of Temkin Group, told Forbes.

"Loyalty is a critical asset that companies regularly squander. It's time for firms to better understand and deliver on the needs and desires of their customers."

Retailers contributed 18 of the top 20, as the average total accrued across this segment neared 60%, easily out-stripping the next-best industries, hotels and investment advisors, both on around 40%.

Ecommerce pioneer Amazon headed the charts on 68%, and performing especially when it comes to attracting repeat shoppers.

Kohl's department stores occupied second place, on 66%, and Costco took third on 64%, leading the way for the companies respondents were most likely to advocate while speaking with friends and family.

Home improvement and appliances specialist Lowe's followed, securing 63%, the same score as Sam's Club, the discount warehouse chain owned by Wal-Mart.

Insurer and credit card provider USAA collected 62%, and, along with TriCare, recorded the strongest returns regarding the lack of enthusiasm among clients to transfer their allegiance elsewhere.

Wholesaler BJ's yielded 62%, matched by Target, and JCPenney was the highest-ranked seller of apparel, on 60%, beating pharmacists Walgreens, which reached 58%.

In contrast, media group Comcast's TV division attained 15% and its web alternative hit 19%, standing at 15% and 19% respectively discussing the equivalents run by Charter Communications.

Indeed, Charter Communications and financial services giant HSBC - on 17% - were two of seven enterprises failing to surpass 20% in terms of a future intention to repurchase from the same business.

Similarly, Charter and Comcast achieved the dubious honour of being the only "very weak" firms for driving positive recommendations.

Meanwhile, Time Warner Cable mustered 18%, Citibank amassed 20%, as did 21st Century Insurance.

Medical insurer Blue Shield of California claimed 17%, and fared particularly badly for customers' propensity to consider rival companies, an area where IT expert Lenovo also struggled.

"The bottom of the list was dominated by health plans, TV service providers and internet service providers. In these industries, it appears as if bad customer experience is contagious," warned Temkin.

"And, worse yet, no one seems to recognise that they are infected."

Even the leader in the TV services category, DirecTV, lodged a modest 28%, and Cox Communications, the number one ISP, managed 33%.

Southwest Airlines, the panel's favourite air carrier, generated 53.6%, and was more than ten points ahead of the typical score of its competitors.

Data sourced from Temkin Group/Forbes; additional content by Warc staff