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Report: Good service keeps customers coming back

Tuesday - 7/8/2014, 12:05pm  ET

grocery shopping (Spencer Platt/Getty Images News/Getty Images)
A Gallup report looked at what makes customers loyal to businesses. (Spencer Platt/Getty Images News/Getty Images)

WASHINGTON -- Businesses' low prices won't keep customers coming back, according to a new Gallup report.

While Americans value a good deal, low prices can't be the only thing that distinguishes the business, according to the Gallup report, State of the American Consumer, which examined what consumers want from businesses as times changes.

Customers say their experiences while shopping carry a lot of weight.

"When businesses can provide the type of meaningful experience their customers want, they realize greater rewards in terms of loyalty and profits," the report said.

Customers who have emotional attachments to retailers care less about the cost and are more likely to spend more and revisit more often, the report found.

Gallup divided customers into three groups: fully engaged; indifferent; and actively disengaged. If a business can get a customer to become fully engaged -- meaning they have a strong emotional attachment to the company -- they are more likely to spend money.

For example, in the consumer electronics industry, Gallup found fully engaged shoppers make 44 percent more visits per year to their preferred retailer than actively disengaged shoppers -- also known as those who are emotionally detached from the company.

Also, when fully engaged shoppers visit their preferred electronics retailer, they purchase more items than they originally intended. On average, they spend $373 per shopping trip, while actively disengaged customers spend $289 per trip, according to Gallup.

To propel a shopper to the fully engaged status, businesses need to focus on service. Service can make or break the customer-business relationship, the report says.

"Retail banking customers who feel they receive exceptional service are 29 percent more likely to be fully engaged than other customers," the research notes.

The same applies to industries such as restaurants, insurance and hospitality.

"Hotels guests are significantly more likely to be fully engaged when they feel like they have been treated as valued guests," the report says.

"However, in a recent Gallup hospitality study, the percentage of guests who said they actually felt valued was less than half."

To gather its data, Gallup surveyed its panel of nearly 15 million respondents between 2001 and 2013.

h/t: NBC News

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