The Relationship Investment Model is a management tool designed to quantify the strength of brand relationships with customers and improve the quality and quantity of customer acquisition and retention efforts by answering the following questions:
- Who is likely to defect from your brand?
- Which of your competitor’s customers should you target? Which should you avoid?
- How is the strength of your customer relationships ( defined as the extent to which customers are ‘invested’ and compelled to continue buying), linked to company ( or product line) profitability?
- What marketing or operational levers under management’s control impact how customer’s become invested in the brand relationship?
- If you spend money to make marketing or operational changes, what will be the financial return on that investment?
TRG iSKY is known as a pioneer in the customer relationship management arena and we continue to develop innovative approaches to manage customer relationships. The most significant recent innovation is based on the concept of customer investment; An invested customer has an enduring desire to maintain a relationship that results in predictable, reliable patterns of future customer buying behavior i.e. the very behaviors that all businesses desire to influence. When we measure customer investment we capture the motive or intent behind repeat buying behavior and, this goes well beyond customer satisfaction, which has proven to be a weak indicator of future buying behavior.
The iSKY Relationship Investment Model was developed in conjunction with leading business school academics who are widely published in the area of relationships management and the model has been rigorously tested and validated. It captures customer connections to brands at the functional, (e.g. transactional satisfaction) and personal level (e.g. trust, belief, intent) and links the two constructs together to explain loyal behavior more fully than satisfaction alone and more fully than other measurement systems typically do. Our data shows that invested customers spend more per transaction, contact the brand more often and give a greater share of wallet to the brand than merely satisfied customers or those who claim a strong emotional affinity with the brand.
An invested customer will exhibit loyal behaviors because they are motivated to do so. Managing the extent to which customers are invested in maintaining their relationship with the brand through the specific levers under management’s control (e.g. product, process, people, promotion) is a powerful and reliable way to increase retention, improve acquisition efforts by targeting un-invested competitor customers and ultimately, increase profitability.