Vulnerability Index. How faithful are our customers

Vulnerability Index. How faithful are our customers

In the 90s, the term customer relationship management, the famous CRM, joined the marketing lexicon. Although we usually use it to refer to some type of technology, the real idea behind them is that it is an imperative in our business.

The CRM tries to decide which clients or segments it has as a destination and then the acquisition of clients, retention and growth plans that it will attract, while retaining the best clients we have.

Vulnerability Index. How faithful are our customersOur commercial work is to acquire, develop and maintain profitable relationships with customers, to create a sustainable competitive advantage. Now, how are customer relationships measured? We all know that achieving customer loyalty is fundamental in any organization and to achieve it, several factors influence and five of them are considered critical for success.

1 – Have clearly defined business results related to the acquisition, retention and growth of our customers.

2 – Agreement about who the client is and what he needs from us, like us from them.

3 – Have very well defined customer segments, their desired behaviors and the objectives of their experience.

4 – A well-documented and integrated client strategy.

5 – Explicit measures of success, as well as the data and processes necessary to support the metrics.

Customer satisfaction and loyalty are two of the most common measures of success and in this sense we find a great variety of models that are used to quantify it, ranging from the simplest of recent experience to value customer life models.

Many organizations agree that a loyal customer:

1 – It keeps the brand despite competitive offers, price changes and product failures.

2 – Increase commitment

3 – Actively promotes the brand to others.

Although there are many approaches to measuring customer loyalty, a metric that all organizations should consider is the Vulnerability Index and to calculate it we will need information about our competitors’ market, campaign channels, offers, etc. Once all the information is gathered, we must follow seven steps to build it.

1 – Mara of the competitive activity: Include the name of the competition, the offer and its duration, and the area of focus or market.

2 – Generate a list of clients with which our campaign had a result

3 – Map of the repurchase and commitment cycle based on frequency and date of the last purchase.

4 – Isolate all customers whose repurchase whose dates are included in the competitor’s campaign. This is the observation set (SW) that will experience the greatest competitive attraction and therefore are the most vulnerable.

5 – Define your observation period, which is usually the launch date of the campaign and a purchase cycle.

6 – Monitor the purchases of vulnerable customers. We must keep track of all customers whose purchases have declined during the observation period (VS).

7 – Calculate the Vulnerability Index. Divide your VS over your OS and multiply the number by a thousand.

The index will give us a good idea of the proportion of clients that are succumbing to competitive pressure and, at the same time, a clear idea about our loyal customers. If the index is high, we know there is something to worry about. If it is low, we can assume that our customers are very satisfied with the brand.

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