HP, eBay and Wachovia Take Loyalty to the Boardroom

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Jun 13, 2005
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By John Hennessy


Writing for Inside 1 to 1, Elizabeth Clampet covers three companies who have elevated loyalty to the boardroom. HP, eBay and Wachovia Bank all have initiatives that focus executive level resources on customer loyalty.


HP has proven a linkage between an increase in loyalty and an increase in gross margin and market share in both the B2C and B2B sectors. According to HP SVP of Total Customer Experience and corporate affairs Diana Bell, “The key is to bake customer loyalty into everyday operations to maintain momentum.”


HP’s initiatives are driven by the Total Customer Experience (TCE) concept. To keep track of TCE, the company maintains a customer-loyalty index and conducts numerous surveys. In addition, customer loyalty is a long-term metric incorporated within HP’s Balanced Scorecard. Executives receive bonuses based on how well they meet those goals.


Don Albert, senior director of strategic relationships for eBay says, “Buying a used car from a stranger over the Internet who’s never seen the vehicle really requires a leap of faith. The connections members have are so emotional, so much so that they think of eBay as their company as much as we do.”


eBay’s executive-level commitment to build loyalty is reflected in a program that requires every employee in the North American division to call 20 members and talk to them about their issues. “It keeps us focused on gaining firsthand knowledge from our members,” said Albert.


Wachovia Bank recently won the 2005 Brandweek customer loyalty award from Brand Keys. According to Gwynne Whitley, director of corporate customer service excellence, executive-level focus contributes to Wachovia’s success.


Customer loyalty and associate metrics (churn, retention, acquisition, satisfaction scores) are the topic of a monthly meeting chaired by CEO Ken Thompson.


“We certainly must have healthy organic growth to be a successful company,” said Whitley. “However, that comes from deepening and enhancing existing relationships you have with customers. We make our brand promise actionable by constantly finding ways to treat our valuable customer better.”


Moderator’s Comment: Is it important for a company’s executives to focus on customer loyalty?


If the satisfaction of customers isn’t a top priority in the boardroom, both the business and its customers are in trouble.


It’s amusing that HP has “proven” a linkage between increased loyalty and increased performance. Thankfully, we don’t have to take on faith any longer that
satisfied customers who buy more, more often and refer others are good for business.

John Hennessy – Moderator

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4 Comments on "HP, eBay and Wachovia Take Loyalty to the Boardroom"


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Tom McGoldrick
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Tom McGoldrick
15 years 8 months ago

Of course, executives need to spend part of their time focused on loyalty. However, loyalty needs to be more than a top down initiative. Loyalty and customer satisfaction should be one of the unifying ideals that all employees are aware of and focus on. No matter what your job, you have internal customers and some impact on your company’s external customers. The technical aspects of each person’s job may vary widely but everyone should always be asking themselves how they can server customers better.

An executive focus is necessary, but not sufficient for developing a culture focused on loyalty and customer satisfaction. Ultimately, it is the culture, not the executives, that drive performance.

Mark Hunter
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Mark Hunter
15 years 8 months ago

It’s a “no-brainer” for executives to be in touch with major customers. As simple as it sounds, there are a number of large companies where the “c-suite” officers are afraid to meet with customers and/or the senior sales leaders don’t trust having their c-suite counterparts meet with customers. In either case, it’s a sad point and, in every case where this occurs, you’ll see a company that is never able to fully achieve its potential. Reason this occurs most frequently is due to an organization being filled with “B or C” level of leaders. You never see this occurring in a company that has “A” level of leaders.

Al McClain
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Al McClain
15 years 8 months ago

Culture and attitude are everything. Particularly impressive is eBay’s program requiring that employees call customers to see what issues they have. Having top execs actually reach out on a regular and scheduled basis to find out what customers think is something all companies could gain by adopting. Compiling statistics from surveys and frequent shopper data provide insights, but when an exec calls a customer for the expressed purpose of finding out what issues they have, there is an environment created where some good things can really happen. The exec is in a listening mode and consumers can provide some real insights into what works and what doesn’t.

M. Jericho Banks PhD
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M. Jericho Banks PhD
15 years 8 months ago
Loyalty used to be called “repeat business,” and was every employee’s concern. In fact, top executives at many successful companies gave themselves the assignment of building repeat business. Sam Walton comes to mind. A couple of things today seem to elevate “loyalty” beyond simple “repeat business:” 1.) more sophisticated customer data collection and, 2.) the impression that merchants must develop relationships with customers to keep them loyal. There’s no stopping the progress of customer data collection methods and technology. But, the more sophisticated it gets, the more translation is required, and more distance is created between useful information and the executives who are in a position to act on it. And in some cases, there’s just too much data to get one’s arms around. Back before the current view of loyalty came into vogue, the only “relationship” question executives asked was, “Do my customers recommend my products/services to their friends and family, and why?” It was that simple. Nothing was codified based on data, but businessmen with great seat-of-the-pants customer intuition could observe these responses… Read more »
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