Customer relationships: Why simply the best isn't always right

Stefan Schmelcher, Susanne O'Gorman and Charlotte Nau

Good performance alone cannot crack the complex code that governs the strength of your customer relationships and the sustainability of your business. As competition intensifies, it is essential to get smarter about the experiences that matter, and deliver return on the bottom line.

The landscape of customer relationships is undergoing a fundamental shift. Today's consumers have more information than ever at their disposal, and more choice when it comes to acting on it. Customers are increasingly challenging and expensive to retain, and even more expensive and difficult to replace. And the disappearance of predictable customer loyalty is therefore putting profit margins under pressure across markets and categories.

An in-depth TNS survey of over 40,000 customers across 20 countries shows relationships being eroded even in traditionally 'sticky' sectors. Half of US consumers now replace their car with a different brand; 70% of Russians opt for a different company when replacing their TV; 12% of Germans have cancelled an insurance policy in the last year; 9% of Spaniards have chosen a different fixed-line telephony provider.