HSM E-briefing Series
on Customer Retention and Loyalty

"HOLDING ONTO YOUR CUSTOMERS"

Issue 1 - 2001

Welcome to a new, monthly e-briefing with two minutes of tips that could be worth millions to you in customer retention and loyalty. It's brought to you by The HSM Group, Ltd., a longtime leader in health care marketing. In working with health care organizations of all kinds, we frequently see
opportunities to improve retention and loyalty. We hope the following information helps you, our valued clients and friends, in your efforts to build better relationships with your customers.

MAKE SURE YOUR RESEARCH IS ACTIONABLE

Is your customer loyalty research an investment or merely an expense? Most organizations conduct quite a bit of research, but it doesn't always tell them what they need to know to hold onto their customers. If it isn't focused and actionable, it doesn't lead to measurable retention and a return-on investment. Use these key questions to identify the need for research improvements.

Are you measuring loyalty and not merely satisfaction?

Satisfaction is not a good predictor of loyalty. In health plans, for example, satisfied members often disenroll. Research should identify loyalty behaviors and attitudes, which are better indicators of retention.

Does your research provide a profile of loyal customers as well as those at greatest risk to defect?

This information is essential to targeting resources and interventions in a cost-effective manner.

Can you distinguish the drivers of retention and loyalty for different customer segments?

In health care trade associations, for example, the value proposition for member institutions may vary significantly based on size, location, service area, and demographics of the population served. In health plans, it takes a different approach to affect the loyalty of unmarried healthy members than that of families with children.

Does your research allow you to be proactive about improving customer loyalty, rather than just reacting to increased disenrollment or defection?

Research should monitor changes in customer loyalty. A decline in loyalty is a harbinger of retention problems and should be addressed as soon as it is identified. Research should provide clear direction by identifying the customer experiences that influence retention as well as defection in your organization.

Does your research provide timely results?

You need to have an up-to-date status of your member population beforemaking decisions for the coming year.

Are research results integrated into company functions?

Research results should be shared with operations, marketing, quality management, customer service, and product management departments, as well as senior management.

Do you know the full costs to your organization of low customer loyalty and low retention rates?

Understanding the financial impact of loyalty helps establish the business case for investing in loyalty research and loyalty building initiatives.

Visit www.hsmgroup.com to see the findings of a recent national study on consumer loyalty to health plans and physicians. The study, conducted by The HSM Group, identifies the drivers of loyalty, how physician loyalty affects plan loyalty, and what drives compliance with health plan rules and physician recommendations.

If you would like for us to address a specific customer loyalty challenge in "Holding Onto Your Customers," send an email to ebriefing@hsmgroup.com with your suggestion. If you would prefer not to continue receiving the monthly e-briefing, please send an email to us at ebriefing@hsmgroup.com.

See previous issues