Posts Tagged ‘passives’

The best is the enemy of the good

Monday, November 9th, 2009

VoltaireThe title of this post is a quote from the French philosopher, Voltaire. It expresses the notion that we must not accept that “good” performance is equivalent to “the best” performance—in fact, they’re enemies.

I’m convinced that most service providers are content to deliver “good” customer service. Their rationale may be based on the assumption that by meeting customers’ expectations, they will create satisfied customers.

Bain and Company, a consumer research firm, has a name for satisfied customers: passives. Passives, as the name implies, are satisfied but unenthusiastic customers who are easily wooed by the competition. These customers are disloyal, tending to make buying decisions based on convenience and price considerations—as opposed to brand loyalty.

Customers who are merely satisfied are generally the product of company cultures that reward efficiency, such as many fast food restaurant chains and big box retailers. These operations are process-focused, transactional, and pride themselves on product and service consistency from location to location.

Contrast the majority of service providers content to deliver “good” customer service with the rare exceptions that aspire to deliver “the best” customer service. Companies such as Disney, Zappos, Nordstrom, and Lexus come to mind.

Instead of attempting to meet customers’ expectations, these companies aspire to exceed expectations. Instead of producing merely satisfied customers, these companies create delighted customers!

Bain and Company has a name for delighted customers as well: promoters. Promoters are the least price-sensitive, have the highest repurchase rates, and are responsible for between 80 and 90 percent of positive referrals to a company or brand.

Promoters are the product of company cultures that reward excellence. These companies are customer-focused, experiential, and pride themselves in delivering product and service excellence from location to location.

Too many businesses accept that “good” (or, more realistically, adequate) customer service is good enough.

Is your business always the most convenient and least expensive option for the customers you serve? Is it ever? Is your company content to produce passive customers or would you prefer a legion of promoters? Is your company’s goal to be good or to be the best?

There is a clear difference between the two that yields predictable results. Voltaire observed this difference 200 years ago and your customers can see it today.

The ultimate question

Monday, December 15th, 2008

Most companies seek to lead their competitors in market share.  But alas there is usually only one company with the largest percentage of market share.  While there are many factors that contribute to gains in market share, some of them such as advertising and discounting are quite expensive to maintain.

Why not take advantage of the goodwill you have developed with your very best customers?  Bain and Company, a global consulting firm, identified these customers as promoters.  These customers are the least price-sensitive, have the highest repurchase rates, and are responsible for between 80 and 90 percent of positive referrals to your company or brand.

In addition to promoters, they also identified two other categories of customers: passives and detractors.  All three categories emerged from ratings customers gave to companies in response to the question, “How likely is it that you would recommend this company to a friend or colleague?”

Bain and Company research over a ten-year period confirms that, in most industries, companies with the highest ratio of promoters to detractors in their sector typically enjoy both strong profits and healthy growth.  Mmm…maybe there’s something to this customer service stuff after all.

Interested in learning more?  Pick up the book.