1to1 Magazine - November/December 2008 - (Page 21) GLOBAL TRENDS .delivered Canada Post proves the correlation between loyalty and business performance. By Kevin Zimmerman h Stats & Facts Headquarters: Ottawa, Ontario, Canada President, CEO, and Director: Moya Greene 2007 sales: $7,610.8 million Employees: 72,500 ow much is loyalty worth? Many executives can only estimate its value, lacking the empirical data to calculate it. Ask Canada Post’s Janet LeBlanc that question, however, and she can answer exactly—and without hesitation. Canada Post, the Canadian postal operator, has proven the connection between customer loyalty and business performance through a linkage analysis process that began in 2003 and continues today. LeBlanc, director of customer value management (and recent 1to1 Customer Champion), launched and continues to advocate for the program. She says the decision was a natural outgrowth of Canada Post’s customer-first philosophy. “This type of linkage analysis is common in the consumer market, less so within commercial markets,” LeBlanc says. “We have been able to quantify how much revenue we would generate based on improved loyalty scores, as measured by our customer value management program.” In essence, Canada Post (CP) proved that perks and benefits have little to do with increased loyalty and customer value; instead, quality service and responsiveness led the way. CP set out to define whether there was an association between attitudinal outcomes (such as quality, value, likelihood to recommend), behavioral outcomes (purchasing behavior), and business outcomes (revenue, growth rates, share of wallet). “Some questions we set out to answer were ‘Do loyal customers have higher revenues, higher growth rates, fewer problems, and lower attrition?’” LeBlanc says. Kurt Pflughoeft, Ph.D., senior vice president of research and development at research firm Market Probe, who conducted the Canada Post CVI Linkage Analysis, says that such analyses are not an exact science. “There are lots of theories around whether behaviors are truly reflective of attitudes,” he says. A common example is that surveyed customers may say they’re highly satisfied with a vendor’s products or services, but will quickly switch to a competitor offering a slightly lower price. Packaging loyalty The size of CP’s operation is vast: It serves 32 million consumers through some 7,000 post offices and online services, with more than 40 million messages, mail, and parcels delivered each day to 14 million physical addresses—a number that increases by 240,000 addresses annually. Consequently, it was necessary to launch the project with a sample of its customer base. CP decided to focus on parcel delivery, which represents 22 percent of its current business. Specifically, the postal service surveyed 2,700 members of VentureOne, its free smallbusiness loyalty program. The program provides members—currently 325,000 in total—with discounts, value-add services, and online business solutions. It’s designed to facilitate a positive customer experience at post offices and on the Canada Post website. www.1to1media.com November/December 2008 21 http://www.1to1media.com/view.aspx?ItemID=29293 http://www.canadapost.com/ http://www.1to1media.com
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