Of Technology, Loyalty, And Fries

Tracking customer loyalty is becoming more common as organizations recognize that unlike loyalty, high satisfaction is poorly correlated to increased profitability. However, this trend has not yet influenced the return on investment (ROI) analysis associated with software projects. I hope this changes as research has shown that an increase in customer loyalty can have a tremendous impact on profitability (a 5% increase in retention translates to a 25-100% increase in profits).

In this environment of inadequate data, we must resort to inference to understand how software can impact loyalty. In certain instances this may appear to be a fool's errand (e.g., word processing's influence on customer loyalty), but many applications make sense. Let's review for example, Business Process Management Suites (BPMS), defined by Gartner as [a set of tools that] "enables the direct control and management of operational processes in near-real time by business managers and process owners to better meet today’s business cycle time needs and enable more-agile." In my last post , I discussed how loyalty is most directly impacted by the quality [and subsequent delivery] of an organization's products and services. The challenge is as delivery scales, the importance of making each customer interaction positive remains stable, while the difficulty grows exponentially. This is where a properly implemented BPMS shines.

Think of it this way, why was McDonalds so successful from the start? Consistency. The same quality and service no matter where you go. Imagine if those famous french fries were different from location to location. Their customers' loyalty comes from this consistency, a McDonald's fry is the same the world over. Similarly, a BPMS allows for this consistency of quality service and responsiveness, even in the face of a changing business climate, fluctuations in workload, new rules and regulations, employee movements, new products, major disasters, etc. Not only is this level of consistency possible, but the degree of oversight and monitoring is unparalleled. It is the equivalent of Jim Skinner, McDonald's Corp. CEO, tasting the fries from the 30,000+ restaurants in 100 countries every moment of every day.

Through the comprehensive use of a BPMS, if a customer's interaction with an organization is consistently positive (e.g., requests are responded to promptly, orders are fulfilled without error, applications are processed quickly, payment is ontime, etc.) their likelihood to stick like a barnacle and pass-along a recommendation promoting the vendor's products/service is much greater. With the ability to monitor these interactions, benefit from real-time, automated, process improvements, and simulate adjustments, it is reasonable that a BPMS can help drive customer loyalty and the bottom-line.