This article is a refined form of an article (https://www.managementexchange.com/hack/measuring-customer-gratefulness-your-customer-grateful-you) written by me in the year 2014
Consider being asked:
On a scale of 1 to 10, how likely are you to express gratitude or say ‘thank you’ to SkyWings Airlines based on your experience booking your airline ticket?
Instead of:
How likely are you to recommend SkyWings Airlines to a friend or colleague based on your experience booking your airline ticket?”
Which of the above questions you are more likely to correctly respond to?
1. Introduction
Gratitude drives loyalty: If a customer is grateful, one can be assured that the customer is loyal too because when one is grateful, one has an obligation to fulfil, which leads to loyalty. There is nothing the customer can give back, except being loyal.
In the intricate tapestry of customer relationships, gratitude serves as the harbinger of loyalty. When a customer experiences a level of value that transcends mere satisfaction, gratitude naturally emerges. This sentiment of gratitude becomes a driving force, instilling a sense of obligation in the customer. In the realm of business, this obligation takes the form of loyalty. Gratitude, therefore, acts as the catalyst, sparking a chain reaction that culminates in enduring customer loyalty. It’s not just a transaction; it’s a heartfelt acknowledgment that, in the exchange between customer and company, loyalty becomes the most genuine form of reciprocity.
In the ever-evolving landscape of business, where products and services are abundant, the true measure of success lies not just in transactions but in the emotional connections forged between customers and brands. Beyond the realms of mere satisfaction and loyalty, businesses are increasingly recognizing the profound impact of emotional engagement on customer relationships. Enter the Customer Gratefulness Index (CGI), a revolutionary metric designed to capture the elusive essence of emotional connection with a brand.
In today’s competitive market, where choices abound and consumer preferences evolve swiftly, understanding the emotional bond customers share with a brand is paramount. Traditional metrics, such as the Net Promoter Score (NPS), have long been employed to gauge loyalty, but they often fall short in unravelling the intricate threads of genuine emotional connect. CGI steps into this void, placing emphasis on a customer’s “likelihood to thank” as a barometer for measuring the depth of their emotional affinity with a brand.
The term “likelihood” takes centre stage in CGI, signifying more than just a numerical value on a scale — it encapsulates the probability of customers expressing gratitude for the product or services offered. This subtle shift in language unveils a profound truth: emotional connections are not merely transactional but are woven into the fabric of genuine human experiences.
This article delves into the indispensable need for emotional connection in today’s customer-centric era and explores how CGI, with its carefully crafted question, serves as a beacon, illuminating the uncharted territories of customer gratitude. Join us on a journey to unravel the significance of emotional connections, and discover how CGI emerges as a powerful tool for businesses striving to understand, measure, and enhance their brand affinity in an ever-changing market landscape.
2. The Problems & Solutions
Problem 1: The omission of gratefulness, a fundamental human emotion, in traditional metrics such as NPS is a significant gap. This oversight neglects a crucial aspect of customer sentiment, leaving a void in our understanding of the emotional connection that underpins customer relationships
Solution: CGI emerges as a solution, directly addressing this gap by focusing on customers’ inclination to express thanks, recognizing the profound role of emotional bonds in shaping brand loyalty.
Problem 2: One notable gap in current metrics, particularly NPS, is the failure to capture the immediate emotional response of customers. Gratefulness often precedes active promotion or criticism, and the delay in measuring loyalty at later stages of the customer journey overlooks this critical moment.
Solution: CGI’s approach of measuring immediate gratitude fills this temporal gap, offering a more accurate reflection of the customer experience by capturing emotions in the moment.
Problem 3: The absence of a metric that can simultaneously measure value creation and customer loyalty is a glaring gap. Current methods, including NPS, often focus solely on loyalty or recommendation, disregarding the customer’s perception of the value received.
Solution: CGI steps in to bridge this gap, inherently capturing both aspects and providing a more comprehensive understanding of the customer experience.
Problem 4: The lack of universal applicability in loyalty measurement methods poses a substantial challenge. Diverse industries and cultures require nuanced approaches, making current metrics less adaptable.
Solution: CGI addresses this gap by centring on a universal emotion — gratefulness. This approach has the potential to transcend cultural and industry variations, offering a more universally applicable and culturally sensitive metric.
Problem 5: A persistent challenge in survey methodologies is low response rates, primarily due to the complexity of questions. The intricate nature of existing loyalty measurement methods, such as NPS, often leads to non-responses, resulting in inaccurate results.
Solution: CGI, with its straightforward question directly addressing gratefulness, presents a solution to this gap, potentially contributing to higher response rates and a more representative sample of customer sentiments.
In summary, the gaps identified in current customer loyalty measurement methods, particularly NPS, underscore the need for a more nuanced and adaptable metric like CGI. CGI addresses these gaps by recognizing gratefulness as a fundamental emotion, measuring emotions in the moment, capturing both value creation and loyalty simultaneously, providing universal applicability, and simplifying survey methodologies to enhance response rates.
3. Why Should Customers Thank a Company for Paid Products or Services? Unravelling the Value Creation Puzzle.
It’s a valid question — why express gratitude when you’ve already paid for a product or service? After all, you are not getting it for free. This is where the notion of value creation steps in. Picture it this way: the value you get from a product or service goes beyond the money you handed over. It’s about the extra benefits, the added perks, the things that make your purchase feel more valuable than the price tag.
Let us define this “value” (let us call it V) as the benefits you enjoy (let’s call this B) minus the purchase price (let’s call this P). So, V = B — P.
Here is the key: for you to truly feel you got your money’s worth (V > P), the benefits must outweigh the cost. If V = P, there is no added value — just a straightforward transaction.
Now, the magic happens when V >> P. That is when gratitude kicks in. When the benefits you get become so significant, so noticeable, that the price you paid seems like a small sum in comparison. This is when you, as a customer, feel the urge to say “thank you.”
Customer Gratefulness, then, becomes a yardstick for the value a company provides. If customers are expressing thanks, it means they see the value in what they received. And here is the beauty: when customers are grateful, loyalty naturally follows. There is an unspoken bond — a sense of obligation that keeps customers coming back, and this loyalty does not need a separate measurement.
In a nutshell, Customer Gratefulness is the sweet spot where value and loyalty intersect. It is a reminder that in the world of business, creating real value for customers is the golden ticket to building lasting relationships.
4. What is the CGI Question?
The question that brands and companies would ask to customer after providing products or services is as follows:
On a scale of 1 to 10, how likely are you to express gratitude or say ‘thank you’ to [Company Name] for the product or service you have received?
5. What does a CGI score give insight into?
1. Depth of Emotional Connection: CGI can reveal the depth of the emotional connection customers have with the brand by assessing their likelihood to express gratitude. This goes beyond transactional interactions and unveils the emotional resonance created by the brand.
2. Perceived Value of Products/Services: The index helps gauge how customers perceive the value of the products or services received. Gratefulness is often linked to the perceived benefits exceeding the purchase price, providing insights into the perceived value proposition.
3. Strength of Customer Satisfaction: Gratitude is an indicator of customer satisfaction extending beyond the basic fulfilment of needs. CGI provides a nuanced measure of satisfaction, capturing the emotional aspects that contribute to a positive customer experience.
4. Identification of Key Value Drivers: By understanding the specific reasons behind customer gratitude, businesses can identify the key drivers of value creation. This insight is invaluable for refining products, services, or customer interactions.
5. Customer Loyalty Indicators: Grateful customers are more likely to be loyal. CGI acts as an indirect indicator of customer loyalty, as expressing gratitude often translates into a continued relationship with the brand.
6. Word-of-Mouth Potential: Grateful customers are inclined to share positive experiences. High CGI scores may suggest a strong potential for positive word-of-mouth marketing, as customers may become brand advocates.
7. Identification of Areas for Improvement: Low CGI scores may pinpoint areas where customers feel less satisfied or less connected emotionally. This information is vital for businesses seeking to enhance specific aspects of their offerings.
8. Competitive Benchmarking: CGI scores can be used for benchmarking against competitors. Higher levels of customer gratefulness may indicate a competitive edge, while lower scores may highlight areas where competitors excel.
9. Cultural and Demographic Nuances: CGI can be analysed across different customer segments to uncover cultural or demographic nuances. Understanding how gratitude varies among diverse groups provides insights for targeted marketing and service strategies.
10. Long-Term Relationship Potential: Gratitude is a precursor to long-term relationships. High CGI scores suggest a strong foundation for enduring customer-brand relationships, indicating a higher likelihood of repeat business and sustained loyalty.
In summary, CGI offers a multifaceted lens through which businesses can gain profound
insights into the emotional, satisfaction, and loyalty dimensions of their customer relationships.
6. How does Net Promoter Score (NPS) & Customer Gratefulness Index (CGI) compare?
7. Why should you consider replacing Net Promoter Score with Customer Gratefulness Index (CGI)?
Replacing Net Promoter Score (NPS) with Customer Gratefulness Index (CGI) can offer several advantages, particularly in capturing the emotional and value-centric aspects of customer relationships.
1. Emphasis on Emotional Connection: CGI focuses explicitly on gratitude, capturing the emotional connection customers have with a brand. This emphasis on emotions goes beyond the recommend/not recommend dichotomy of NPS, providing a richer understanding of customer sentiment.
2. Measuring Value Perception: CGI incorporates the concept of value creation by assessing whether customers feel grateful for the received product or service. This provides insights into the perceived value, which is crucial for understanding customer satisfaction beyond the scope of NPS.
3. Holistic View of Customer Satisfaction: While NPS primarily gauges loyalty based on likelihood to recommend, CGI offers a more holistic view of customer satisfaction by considering emotional responses. This can lead to a more comprehensive understanding of the overall customer experience.
4. Simplicity in Measurement: The CGI question, focused on the likelihood to express gratitude, is straightforward and can be easily understood by respondents. This simplicity can contribute to higher survey response rates compared to the more complex NPS question.
5. Universality of Gratitude: Gratitude is a universal emotion, making CGI potentially applicable across diverse cultures and industries. This universality contrasts with NPS, where cultural and industry variations may impact the interpretation of recommendations.
6. Clearer Link Between Satisfaction and Loyalty: CGI establishes a clearer link between customer satisfaction (expressed through gratitude) and loyalty. The concept that gratitude leads to loyalty is inherently embedded in CGI, providing a more direct measurement of the desired outcome for businesses.
7. Insight into Value-Driven Loyalty: CGI uniquely measures not just loyalty but loyalty driven by perceived value. Understanding the connection between the value a customer perceives and their loyalty is critical for businesses aiming to enhance customer relationships.
8. Enhanced Actionable Insights: CGI’s focus on gratitude can provide more actionable insights. Understanding why customers are grateful offers a roadmap for improvements, helping companies address specific aspects of their products or services that contribute to positive customer experiences.
9. Reflection of Modern Customer Expectations: In an era where customer experiences are becoming increasingly personalised and emotionally driven, CGI aligns more closely with modern customer expectations. It resonates with the idea that customer-brand relationships are built on more than just transactional interactions.
10. Comprehensive Measurement of Customer Value: CGI captures both emotional and perceived value dimensions, offering a more comprehensive measurement of customer value. This approach reflects a nuanced understanding of what drives customer satisfaction and loyalty beyond what NPS alone can provide.
While NPS has been widely used and remains a valuable metric in certain contexts, CGI introduces a fresh perspective that aligns with the evolving landscape of customer-centric business practices. Consideration of both metrics or a gradual transition from NPS to CGI can offer businesses a more holistic approach to understanding and improving customer relationships.
8. Conclusion
In the ever-evolving landscape of customer-centric strategies, the choice between measuring loyalty and emotional attachment has never been more pivotal. As businesses seek to delve beyond transactional interactions, the traditional Net Promoter Score (NPS) finds a formidable contender in the Customer Gratefulness Index (CGI).
While NPS has long been a stalwart in quantifying loyalty through recommendations, CGI introduces a paradigm shift by placing the spotlight on the emotional tapestry woven between customers and brands. The question of “How likely are you to express gratitude?” unlocks a dimension of customer insights that transcends mere recommendations. It is an exploration of the emotional connection customers feel and the value perceived beyond the purchase price.
As we navigate the nuanced realm of customer relationships, CGI emerges as a beacon, illuminating the subtle nuances of gratitude as a forerunner to loyalty. The simplicity of CGI’s question belies its depth, offering businesses a unique vantage point to understand the emotional resonance they create.
In this journey toward a more holistic understanding of customer loyalty, CGI stands poised as a catalyst for change. It navigates the complexities of emotional attachment, allowing businesses to not only measure but also nurture authentic relationships with their clientele.
In conclusion, as the business landscape continues to transform, embracing the Customer Gratefulness Index heralds a new era in deciphering the intricate dance between customer and brand. It’s a recognition that beyond the realm of recommendations, genuine gratitude paves the way for enduring loyalty, making CGI an indispensable tool for businesses seeking not just customers, but true brand advocates.
[Customer Gratefulness Index (CGI) and the Question “How likely are you to express gratitude or say ‘thank you’ to [Company Name] for the product or service you have received?” are a copyright of the author. The two may not be used for commercial purpose without prior written permission from the author.]
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