I continue to scan the web for loyalty data or data that relates to customer loyalty. Since I have several excerpts on my desk with what appears to be well documented data, it is time to log them and get on with some more interesting aspects of customer loyalty.
1. From the Harvard Business Review - The average organization loses 50% of its customers every 5 years. The cost of replacing them can be six to seven times more expensive than winning them in the first place.
2. From ACcenture - 59% of people had actually stopped doing business with companies in the past year due to poor service (based ona survey of 3,500 consumers on five continents).
3. From an annual survey by the National Retail Federationi and IBM - 6% of retailers don't have anyset schedule at all in tracking customer satisfaction (based on a survey of 137 retail firms). Only 10% of retailers measure customer satisfaction on a weekly basis and only 8% do an annual survey.
4. Foresee Results measures online customer loyalty for retail web sites - In 2007 the aggregate customer satisfaction rating fell by 1.3% to 74%. The rating declined for nearly half of 40 online retail retailers due to higher consumer expections (according to Foresee CEO Larry Freed.
5. From Harris Interactive who polled 2,000 mobile phone users - 96% said they wouldn't hesitate to switch carriers to get a better experience. In fact, 72% had already made a switch due to a negative experience.
6. From Amdocs, a call center technology firm in their survey of 2,000 consumers in the US and Britain - four in five consumers were satisfied with their service levels, but one in three said they would switch to another carrier to get better services for mobile games, entertainment and ads.
The bottom line is that there are vast amounts of customer information on the web. There appears to be a consistent message in all the satistics that customers are important and those organizations who measure them and make them an important component of their strategy seem to perform better (financially) than those who do not. This message is pervasive in all industries (at least those industries that I have either worked in or found on the web).
Monday, March 31, 2008
Thursday, March 27, 2008
A Loyalty Check List
I have written a number of blogs about metrics but most of them have been focused on the customer. I have also developed a rather comprehensive checklist that provides an in-depth assessment of a company's commitment to loyalty. I have included a simplified and reduced version of this assessment below. Please note that this checklist has a copyright; however, it can be used by anyone as long as the source is noted.
Dr. B’s CHECKLIST
To Assess Internal Loyalty Components in a Company
[Directions: respond to each statement using a rating of 0 = not at all; 1 = minimally; 2 = moderately;
3 = significantly]
I. CUSTOMERS
A. Identify homogeneous customer segments to determine the kind of customers to whom you can deliver superior value. ___
B. Understand your target customers and determine specifically how you will retain them. ___
C. Identify specifically which, where and how often customer expectations have
been met, exceeded, or not met. Remember, whatever the customer says is a
problem, is a problem! ___
D. Determine accurately your company’s ability and willingness to handle customer questions, inquiries and complaints effectively. Identify specific procedures for
each customer question. ___
E. Determine accurately the extent to which your recovery process reduces defections and/or retains customers whom might otherwise switch to the competition. ___
F. Identify the percentage of your customer base at risk. ___
G. Maintain programs to ensure customer retention throughout the product or
service lifecycle. ___
H. Establish specific vehicles and opportunities for multiple levels of interactive communication with your customers. ___
I. Articulate specific examples of how your company earns the personal trust,
respect and loyalty of each type of customer. ___
J. Assess the meaningful reciprocal loyalty between your company and your
customers. Identify specific ways in which each feels and demonstrates some
obligation to the other. ___
II. PRODUCTS and SERVICES
A. Identify specific new products and/or services based on your customers’ changing needs, desires and expectations. ___
B. Identify the process by which you anticipate evolving customer needs and
wishes through intelligence-gathering and analysis. ___
C. From your customer’s perspective, scrutinize your products and services to determine the gap between their expectations and experiences. ___
D. Specifically how do you keep customers actively involved throughout your
product or service lifecycle? ___
III. EMPLOYEES
A. Understand and can state clearly the share purpose between the company and
each employee. ___
B. Employees have integrated the company values and priorities into their work life. How do you know? ___
C. Ensure that management decisions and behaviors are congruent with the stated vision and goals of the company. ___
D. Design operating structures and incentives to empower front-line staff to take the initiative to serve and delight your customers. ___
E. Implement an effective retention strategy aligning employees’ enlightened self-interest with the company’s interests. ___
F. Ensure that every employee understands thoroughly their personal contribution, their role and responsibilities in the overall activities of the company. ___
G. Articulate specific examples of how the company earns the trust, respect
confidence of its employees. ___
IV. MEASUREMENT SYSTEMS
A. Track and understand the market and revenue impact of poor quality, customer problems and priorities. Determine the percentage of your customer base at risk then set priorities accordingly. ___
B. Determine the gap between what the customer expected and what the customer actually received. ___
C. Evaluate each critical incident with your customer and determine accurately the nature and extent of the problems where they occur. ___
D. Measure each priority area accurately and continuously. Review the results regularly with top management. ___
E. Identify core causes of defections rather than triggers. ___
E. Determine your company’s ability to handle customer complaints and inquiries effectively (recovery process). ___
F. What is the net present value of your customer base? ___
G. How much is a new customer worth? ___
H. How much is it worth to keep an existing customer? ___
I. Determine the actual payoff for problem prevention and resolution. ___
• Review your scores by section to determine categories of strength and/or weakness. If your average ratings overall fall within the two-to-three range, CONGRATULATIONS!
• If you have 6 or more of the 9 measurements scored at 2 or higher, CONGRATULATIONS!
• Otherwise, you may want to get more directly involved with specific problem areas.
Dr. B’s CHECKLIST
To Assess Internal Loyalty Components in a Company
[Directions: respond to each statement using a rating of 0 = not at all; 1 = minimally; 2 = moderately;
3 = significantly]
I. CUSTOMERS
A. Identify homogeneous customer segments to determine the kind of customers to whom you can deliver superior value. ___
B. Understand your target customers and determine specifically how you will retain them. ___
C. Identify specifically which, where and how often customer expectations have
been met, exceeded, or not met. Remember, whatever the customer says is a
problem, is a problem! ___
D. Determine accurately your company’s ability and willingness to handle customer questions, inquiries and complaints effectively. Identify specific procedures for
each customer question. ___
E. Determine accurately the extent to which your recovery process reduces defections and/or retains customers whom might otherwise switch to the competition. ___
F. Identify the percentage of your customer base at risk. ___
G. Maintain programs to ensure customer retention throughout the product or
service lifecycle. ___
H. Establish specific vehicles and opportunities for multiple levels of interactive communication with your customers. ___
I. Articulate specific examples of how your company earns the personal trust,
respect and loyalty of each type of customer. ___
J. Assess the meaningful reciprocal loyalty between your company and your
customers. Identify specific ways in which each feels and demonstrates some
obligation to the other. ___
II. PRODUCTS and SERVICES
A. Identify specific new products and/or services based on your customers’ changing needs, desires and expectations. ___
B. Identify the process by which you anticipate evolving customer needs and
wishes through intelligence-gathering and analysis. ___
C. From your customer’s perspective, scrutinize your products and services to determine the gap between their expectations and experiences. ___
D. Specifically how do you keep customers actively involved throughout your
product or service lifecycle? ___
III. EMPLOYEES
A. Understand and can state clearly the share purpose between the company and
each employee. ___
B. Employees have integrated the company values and priorities into their work life. How do you know? ___
C. Ensure that management decisions and behaviors are congruent with the stated vision and goals of the company. ___
D. Design operating structures and incentives to empower front-line staff to take the initiative to serve and delight your customers. ___
E. Implement an effective retention strategy aligning employees’ enlightened self-interest with the company’s interests. ___
F. Ensure that every employee understands thoroughly their personal contribution, their role and responsibilities in the overall activities of the company. ___
G. Articulate specific examples of how the company earns the trust, respect
confidence of its employees. ___
IV. MEASUREMENT SYSTEMS
A. Track and understand the market and revenue impact of poor quality, customer problems and priorities. Determine the percentage of your customer base at risk then set priorities accordingly. ___
B. Determine the gap between what the customer expected and what the customer actually received. ___
C. Evaluate each critical incident with your customer and determine accurately the nature and extent of the problems where they occur. ___
D. Measure each priority area accurately and continuously. Review the results regularly with top management. ___
E. Identify core causes of defections rather than triggers. ___
E. Determine your company’s ability to handle customer complaints and inquiries effectively (recovery process). ___
F. What is the net present value of your customer base? ___
G. How much is a new customer worth? ___
H. How much is it worth to keep an existing customer? ___
I. Determine the actual payoff for problem prevention and resolution. ___
• Review your scores by section to determine categories of strength and/or weakness. If your average ratings overall fall within the two-to-three range, CONGRATULATIONS!
• If you have 6 or more of the 9 measurements scored at 2 or higher, CONGRATULATIONS!
• Otherwise, you may want to get more directly involved with specific problem areas.
Wednesday, March 26, 2008
Metrics Are Important
I recently read an article by Neil Davey, the editor of MyCustomer.com and appreciated some of the points he made. In fact, some were so timely, I decided to incorporate them in this blog. First, the statistics which really have impact on our vision of what customer loyalty is all about. These statistics strongly suggest the need for a serious review of the metrics we are using.
1. Deloitte's 2007 study "in the Dark" seems to indicate that business leaders have an excellent idea of what traditional financial figures mean but are not clear what the customer information means. The statistics from the study show that 87% of companies are happy that their financial measurement is goodbut only 29% can say the same about non-financial indicators.
2. VisionEdge Marketing, a market research company, found in their 2007 study that 78% of companies in their study track leads to conversion but only about 25% track and measure the rate of customer acquisition and fewer than 10% measure customer lifetime value or customer advocacy.
The point of the article, and it is a very valid point, is that when we measure customer loyalty and customer satisfaction we are immediately ignoring the potential customer and the lost customer. Mr. Tom Mooney, consulting and propositions director at Experian Integrated marketing is quoted as saying "The nearest many organizations get is the use of customer satisfaction surveys and average call answering statistics - neither of which adequately measure customer experience."
The bottom line is well stated in the article; namely, companies need to focus on those metrics that aid in decision making and which will contribute to the bottom line of the financial statement. A secondary point made in the article is that the search for a single customer metric that holds the key to success for every company is a futile one. The author suggests that the metrics must include behavioral and experiential metrics along with the traditional metrics. He also suggests we expand our vision of "customer."
I believe that Neil Davey has made a good case for taking a closer look at the metrics companies are using. His point that not all metrics have value and one should be willing to eliminate those that have minimal or no impact on the performance of the company.
1. Deloitte's 2007 study "in the Dark" seems to indicate that business leaders have an excellent idea of what traditional financial figures mean but are not clear what the customer information means. The statistics from the study show that 87% of companies are happy that their financial measurement is goodbut only 29% can say the same about non-financial indicators.
2. VisionEdge Marketing, a market research company, found in their 2007 study that 78% of companies in their study track leads to conversion but only about 25% track and measure the rate of customer acquisition and fewer than 10% measure customer lifetime value or customer advocacy.
The point of the article, and it is a very valid point, is that when we measure customer loyalty and customer satisfaction we are immediately ignoring the potential customer and the lost customer. Mr. Tom Mooney, consulting and propositions director at Experian Integrated marketing is quoted as saying "The nearest many organizations get is the use of customer satisfaction surveys and average call answering statistics - neither of which adequately measure customer experience."
The bottom line is well stated in the article; namely, companies need to focus on those metrics that aid in decision making and which will contribute to the bottom line of the financial statement. A secondary point made in the article is that the search for a single customer metric that holds the key to success for every company is a futile one. The author suggests that the metrics must include behavioral and experiential metrics along with the traditional metrics. He also suggests we expand our vision of "customer."
I believe that Neil Davey has made a good case for taking a closer look at the metrics companies are using. His point that not all metrics have value and one should be willing to eliminate those that have minimal or no impact on the performance of the company.
Tuesday, March 25, 2008
Loyalty Creation From the Inside
When we think of customer loyalty many often see it as one or more measures that have been taken from customer responses. But the question comes to my mind that loyalty starts inside the company. I have written previous blogs that showed how customer loyalty is strongly related to employee loyalty. Now I would like to suggest a further step into the creation of loyalty. From this perspective customer loyalty is seen as loyalty to a brand (another way of defining a company).
If we look at the "brand" as consisting of two dimensions; namely, the management component and the employee component I believe there is a simple analysis that will provide clues to the ability of the company to create loyal customers. Here is how it works.
First, score the management component on a scale from low commitment to the company to high commitment to the company (this will be the subject of a future blog). The score can be on any scale so long as there is sufficient granularity to differentiate a highly committed management from one where the manangement team has objectives other than increasing involvement in customers. One indicator of management involvement with the customers is the rigidity of management to accommodate variations from the policy handbook to meet an unusual customer need.
Second, score the employee component on the same commitment scale from low to high commitment to the company. An indicator of the employee commitment is the willingness of the employee to stay a little longer to resolve customer problems rather than "punching the clock" and leaving before the customer issue is resolved.
Finally, compare the level of management commitment to the level of employee commitment and notice the following:
1. If both the management and employee commitment are low, then the likelihood developing customer loyalty is very low.
2. If the management commitment is high but the employee commitment is low, employee turnover will increase and the likelihood of developing customer loyalty is still low (but not as low as #1 above).
3. If the management commitment is low but the employee commitment is high, the likelihood of creating customer loyalty is reasonable and definitely higher than either #1 or #2 above because a committed employee has the most direct impact on customer loyalty.
4. If both the management and employee commitment are high the likelihood of developing customer loyalty is very high.
The bottom line is that internal commitment to the customer has two components; namely management commitment and employee commitment. If either or both are either missing or low, the likelihood of developing a strong customer loyalty program is low. When both groups are highly committed, customer loyalty will thrive.
If we look at the "brand" as consisting of two dimensions; namely, the management component and the employee component I believe there is a simple analysis that will provide clues to the ability of the company to create loyal customers. Here is how it works.
First, score the management component on a scale from low commitment to the company to high commitment to the company (this will be the subject of a future blog). The score can be on any scale so long as there is sufficient granularity to differentiate a highly committed management from one where the manangement team has objectives other than increasing involvement in customers. One indicator of management involvement with the customers is the rigidity of management to accommodate variations from the policy handbook to meet an unusual customer need.
Second, score the employee component on the same commitment scale from low to high commitment to the company. An indicator of the employee commitment is the willingness of the employee to stay a little longer to resolve customer problems rather than "punching the clock" and leaving before the customer issue is resolved.
Finally, compare the level of management commitment to the level of employee commitment and notice the following:
1. If both the management and employee commitment are low, then the likelihood developing customer loyalty is very low.
2. If the management commitment is high but the employee commitment is low, employee turnover will increase and the likelihood of developing customer loyalty is still low (but not as low as #1 above).
3. If the management commitment is low but the employee commitment is high, the likelihood of creating customer loyalty is reasonable and definitely higher than either #1 or #2 above because a committed employee has the most direct impact on customer loyalty.
4. If both the management and employee commitment are high the likelihood of developing customer loyalty is very high.
The bottom line is that internal commitment to the customer has two components; namely management commitment and employee commitment. If either or both are either missing or low, the likelihood of developing a strong customer loyalty program is low. When both groups are highly committed, customer loyalty will thrive.
Monday, March 24, 2008
Loyalty Without Coupons
The more I read about loyalty programs that use coupons, the more I am convinced that coupons are no longer a differentiator that will create loyalty. I now see coupons as a commodity; that is, something one must do to maintain a place in the market. Since most, if not all companies that use coupons, are competing in similar markets, the value of the coupon becomes the attraction. As soon as a coupon with better value is offered, the appeal of one company over another is lost.
Perhaps the most important point is that a coupon has an intrinsic value that is NOT based on the company, service or relationship of the company offering the coupon. The coupon is only based on the product. As long as its price is the lowest (with the coupon, it will attract customers. A dismal store with untrained personnel and no interest in anything other than moving products can offer coupons (and most of them do). The life of a company that depends on future sales from coupons, and only coupons, will only survive as long as their coupon values are the best. And example in the LA area was a discount chain called Adray's. This company was the quintessential of what I have just described. The store was not visually appealing, the clerks were not there to build relationships, only to sell product. Adrays is no longer in business.
I continue to see coupons offered for grocery stores. The purpose for some of the coupons is to entie people into the store when a holiday is nearing. For exaample, the beer and soft drink industries offer coupons just before Memorial Day, July 4th, and Labor Day. No surprise. The local store will encourage the use of coupons so that the customers who come in for the "super deals" on drinks will also buy the rest of their holiday shopping articles there.
My purpose for writing this blog is to note that one grocery chain has found a way to create loyalty that is, in my mind, very novel. The chain is Hy-Vee, a chain in the midwest with more than 200 stores that has been working with Dr. David Katz, an internal medicine specialist at Yale University. Dr. Katz has developed a computer model that scores food products on a nutrition scale of 1 to 100. The scale takes into account 30 nutritional properties such as fiber, vitamins, cholesterol, fat, etc. The computer computes a score that will soon be placed on the shelves so that people who are diet and health conscious can better manage their diet.
The system which is now being implemented is called Overall Nutritional Quality Index (ONQI). Hy-Vee is expecting to roll out the ONQI system in September and have the ratings in place for 40,000 products this year.
Bottom line: You don't have to use coupons to create customer loyalty, you just have to listen to the customers and find a way to fill their needs.
Perhaps the most important point is that a coupon has an intrinsic value that is NOT based on the company, service or relationship of the company offering the coupon. The coupon is only based on the product. As long as its price is the lowest (with the coupon, it will attract customers. A dismal store with untrained personnel and no interest in anything other than moving products can offer coupons (and most of them do). The life of a company that depends on future sales from coupons, and only coupons, will only survive as long as their coupon values are the best. And example in the LA area was a discount chain called Adray's. This company was the quintessential of what I have just described. The store was not visually appealing, the clerks were not there to build relationships, only to sell product. Adrays is no longer in business.
I continue to see coupons offered for grocery stores. The purpose for some of the coupons is to entie people into the store when a holiday is nearing. For exaample, the beer and soft drink industries offer coupons just before Memorial Day, July 4th, and Labor Day. No surprise. The local store will encourage the use of coupons so that the customers who come in for the "super deals" on drinks will also buy the rest of their holiday shopping articles there.
My purpose for writing this blog is to note that one grocery chain has found a way to create loyalty that is, in my mind, very novel. The chain is Hy-Vee, a chain in the midwest with more than 200 stores that has been working with Dr. David Katz, an internal medicine specialist at Yale University. Dr. Katz has developed a computer model that scores food products on a nutrition scale of 1 to 100. The scale takes into account 30 nutritional properties such as fiber, vitamins, cholesterol, fat, etc. The computer computes a score that will soon be placed on the shelves so that people who are diet and health conscious can better manage their diet.
The system which is now being implemented is called Overall Nutritional Quality Index (ONQI). Hy-Vee is expecting to roll out the ONQI system in September and have the ratings in place for 40,000 products this year.
Bottom line: You don't have to use coupons to create customer loyalty, you just have to listen to the customers and find a way to fill their needs.
Saturday, March 22, 2008
Some Further Thoughts on NPS
I have some further thoughts about the NPS measure and its use. I think my main problem is that I don't understand how it is used and what makes it a superior metric for customer loyalty. Let me focus on one area that gives me some "heart burn."
I hope I am correct when I define NPS as the percent of scores that lie between those who score 9 or 10 and those who score 1 through 6 on a survey that asks the "ultimate question" - using a 10 point scale. An NPS score of 10% for company A could be obtained if there were 80% of the responses to the "ultimate question" at either 9 or 10 and 10% of the responses having a score of 1 though 6. The 80% number represents the advocates and the 10% who score on the low end, the detractors. (If these names - advocates and detractors - are not quite right- forgive me - it is Saturday morning).
But consider the case (company B) that shows the percent of advocates is 85% and the percent of detractors is 5%. This also gives an NPS score of 10%. According to the NPS score both companies have equal loyalty. This can't be true. I must be missing something.
What if I find company C who has only 60% advocates and 30% detractors. This company according to my understanding of NPS would have the same loyalty score as companies A and B.
WHAT AM I MISSING?
It appears to me that the location of the difference (the NPS score) is critical to the valuation of customer loyalty.
I read a note by Dr. Paul Marsden, director of ClickAdvisor.com and he states "the value of the Net Promoter is that its simplicity drives adoption across the business to develop a customer-centric culture." I believe it is just as simple to look at the percentage of customers who score 9 or 10 on any overall measure versus those who score low on the same measure. I have found that most overall measures correlate very highly with one another so that selection of one over another as being "better" may be nothing more than wishful thinking (or good marketing).
On the very positive side of NPS, it has provided a simplistic measure that can be easily displayed and described to all levels of management. From the position of viewing customer loyalty as a single, simple measure, a company that selects NPS may be more inclined to develop company-wide customer-centric behavior throughout its corporation. That is VERY positive.
The bottom line: A customer loyalty measure that can be used to encourage a company to be more customer focused should discover the customer focus invariably improves the company's performance. This has been proven in many studies.
The caveat we must always remember is that the NPS measure is statistical and therefore is subject to all the errors in data collection and analysis associated with the measurement. One final caveat is that statistical measures are just that; namely, statistical measures. This means that just because there is a statistical relationship, there may not necessarily be a cause-and-effect relationship.
And finally, the use of a single measure of customer loyalty is only the open door to developing a detailed understanding of the impact of the three components of loyalty: namely, product, process and relationship. The "devil is in the details."
I hope I am correct when I define NPS as the percent of scores that lie between those who score 9 or 10 and those who score 1 through 6 on a survey that asks the "ultimate question" - using a 10 point scale. An NPS score of 10% for company A could be obtained if there were 80% of the responses to the "ultimate question" at either 9 or 10 and 10% of the responses having a score of 1 though 6. The 80% number represents the advocates and the 10% who score on the low end, the detractors. (If these names - advocates and detractors - are not quite right- forgive me - it is Saturday morning).
But consider the case (company B) that shows the percent of advocates is 85% and the percent of detractors is 5%. This also gives an NPS score of 10%. According to the NPS score both companies have equal loyalty. This can't be true. I must be missing something.
What if I find company C who has only 60% advocates and 30% detractors. This company according to my understanding of NPS would have the same loyalty score as companies A and B.
WHAT AM I MISSING?
It appears to me that the location of the difference (the NPS score) is critical to the valuation of customer loyalty.
I read a note by Dr. Paul Marsden, director of ClickAdvisor.com and he states "the value of the Net Promoter is that its simplicity drives adoption across the business to develop a customer-centric culture." I believe it is just as simple to look at the percentage of customers who score 9 or 10 on any overall measure versus those who score low on the same measure. I have found that most overall measures correlate very highly with one another so that selection of one over another as being "better" may be nothing more than wishful thinking (or good marketing).
On the very positive side of NPS, it has provided a simplistic measure that can be easily displayed and described to all levels of management. From the position of viewing customer loyalty as a single, simple measure, a company that selects NPS may be more inclined to develop company-wide customer-centric behavior throughout its corporation. That is VERY positive.
The bottom line: A customer loyalty measure that can be used to encourage a company to be more customer focused should discover the customer focus invariably improves the company's performance. This has been proven in many studies.
The caveat we must always remember is that the NPS measure is statistical and therefore is subject to all the errors in data collection and analysis associated with the measurement. One final caveat is that statistical measures are just that; namely, statistical measures. This means that just because there is a statistical relationship, there may not necessarily be a cause-and-effect relationship.
And finally, the use of a single measure of customer loyalty is only the open door to developing a detailed understanding of the impact of the three components of loyalty: namely, product, process and relationship. The "devil is in the details."
Monday, March 17, 2008
Good Customers versus Nice Customers - Which One is Loyal?
This is just a short blog to document the obvious. When I am reminded of some of the naivete in our market place, I feel an obligation to repeat what many of us know but the newbees or the unthinking have not discovered. In this instance my concern is the apparent lack of understanding between what is a "good customer" and what is a "nice customer."
A "good customer" is the kind of customer every business wants. This is the customer that pays attention to the quality and performance of the product, the service of the product and the way problems are handled. That customer will also pay attention to the way the company conducts its business. What makes this customer a "good customer" is that this customer is willing to tell the company when the company does something that bothers, offends or in some way is affecting the relationship in a negative manner. This customer has the possibility of being both a very loyal customer but is, in any case, the ABSOLUTE BEST consultant the company could ever get - and it costs nothing. I often tell my clients that their customers are the best consultants they can get. All a company has to do is provide an atmosphere of openness and be able to listen accurately and respectfully to the customer at all times and under ALL CONDITIONS.
A "nice customer" on the other hand is one who will never cause the company a problem. This customer never complains to the company. This customer does not need a customer complaint department because this customer will never file a complaint. This customer just says thank you and then DISAPPEARS and never comes back whan any kind of a probelm or concern occurs. You will never know that a problem or concern occurred with the customer. You never know why they left! BUT, these same customers will be more than willing to give negative comments to friends and business associates without telling the company. These "nice customers" can absolutely destroy a business.
The bottom line is that every company should do its best to create "good customers" and eliminate the possibility of a customer becoming a "nice customer." That means companies should create an atmosphere of openness that encourages customers to tell them their problems. This sounds like a simple customer survey challenge - BUT IT IS NOT. The details of how to do this is a topic for a future blog.
A "good customer" is the kind of customer every business wants. This is the customer that pays attention to the quality and performance of the product, the service of the product and the way problems are handled. That customer will also pay attention to the way the company conducts its business. What makes this customer a "good customer" is that this customer is willing to tell the company when the company does something that bothers, offends or in some way is affecting the relationship in a negative manner. This customer has the possibility of being both a very loyal customer but is, in any case, the ABSOLUTE BEST consultant the company could ever get - and it costs nothing. I often tell my clients that their customers are the best consultants they can get. All a company has to do is provide an atmosphere of openness and be able to listen accurately and respectfully to the customer at all times and under ALL CONDITIONS.
A "nice customer" on the other hand is one who will never cause the company a problem. This customer never complains to the company. This customer does not need a customer complaint department because this customer will never file a complaint. This customer just says thank you and then DISAPPEARS and never comes back whan any kind of a probelm or concern occurs. You will never know that a problem or concern occurred with the customer. You never know why they left! BUT, these same customers will be more than willing to give negative comments to friends and business associates without telling the company. These "nice customers" can absolutely destroy a business.
The bottom line is that every company should do its best to create "good customers" and eliminate the possibility of a customer becoming a "nice customer." That means companies should create an atmosphere of openness that encourages customers to tell them their problems. This sounds like a simple customer survey challenge - BUT IT IS NOT. The details of how to do this is a topic for a future blog.
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