The Common Uncommonly

All About Loyalty

With Friends Like These

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Are the customers you HAVE the customers you WANT?

 

Earlier this summer I was visiting a prospect in the restaurant business.  We were talking about customer satisfaction – how to measure it, why to measure it – and she shared a great story.

She told me about one of their locations (they have over 200 nationwide) that had the highest satisfaction scores of any of their restaurants… right up until they pulled the plug on the store.  Turns out it was also one of their most unprofitable locations. 

Her story reminded me of the TV show Cheers.  Remember Cliff and Norm?  Great customers, right?  Showed up every day for a few beers.  Wouldn’t think about going elsewhere.  By any traditional measure of customer satisfaction or loyalty, I’m sure they would top the charts. 

On the flip side, can you run a bar full of Cliffs and Norms?  Don’t count on it. They rarely paid their tabs.  Their banter probably drove off countless customers.  They certainly weren’t buying the high-margin stuff, and each of them could nurse a beer for an hour or more.  But they sure were loyal!

Does this mean customer research is ineffective?  Of course not.  It means that sometimes, customer research needs to take a backseat to the big picture.

Day after day, we hear about how important it is to ensure customer satisfaction, promote loyalty, build relationships, and engage customers.  But there’s a little-spoken caveat to that: Make sure you are focusing on the right customers!

A good research initiative does more than just tell you if your customers are happy.  It helps you understand which customers are most desirable for your business, and why.  It tells you how those customers feel about you.  It tells you what to do to make those customers happier.  And it tells you what messages are going to resonate with those customers.

So before you worry too much about customer satisfaction, make sure you’re talking to the customers you want to keep, rather than the ones who are hurting your business.  After all, the only thing worse than a disloyal friend is a loyal enemy.

Written by Tom Logue

August 29th, 2011 at 7:37 am

3 Responses to 'With Friends Like These'

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  1. [...] Delta’s tackled this problem a few times in the past several years. First, trying to boost activity at the start of the recession, they made it easier for customers to reach the top Platinum tier, lowering the mileage requirement from 100k to 75k. Then, when things got a bit crowded at the top, they created a new Diamond tier with a 125k mileage requirement and much more lucrative benefits. Objectively, it made total sense… they’d been treating a 75,000-mile-a-year traveler the same as a 250,000-mile-a-year traveler. Recently they took it a step further. Since some folks are very adept at stockpiling miles cheaply (even going on so-called mileage runs where they spend 2-3 days on planes just to get the miles), Delta introduced a new requirement. Starting next year, elite status depends both on activity (how many miles/segments traveled) and spend (how much the tickets cost). In other words, they’re looking to reward their most profitable customers rather than their most active ones (who aren’t necessarily the most desirable). [...]

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    13 Apr 14 at 11:25 pm

  3. I hardly leave responses, however i did a few searching and wound up here
    Customer Loyalty | Retention | Cheers | Bad Customers | The Common Uncommonly.
    And I actually do have 2 questions for you if it’s allright.

    Is it simply me or does it look like a few of these remarks look as
    if they are written by brain dead people? :-P And,
    if you are posting at other social sites, I’d like to keep up with anything new you have to post.
    Would you list of all of all your community pages like your Facebook page, twitter feed, or
    linkedin profile?

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