Most Companies track and attempt to understand their customers as a group however understanding them individually is also valuable and very interesting. Knowing where to put your effort and spend your time will be evident in the bottom line.
Customers can be categorised into one of four basic types depending on their behavioural attributes (what are their biases?) Level of satisfaction (their attitude) and their ability to act on that level of satisfaction (market dynamics, do they need a product only you are able to supply?)
The ‘Faithful’ and the ‘Apostle’
These customers are the foundation of a company’s business, typically they are highly satisfied with the product or service which fits well with their own needs. That’s why it is no surprise that they are the easiest customers to service. Within the ranks of the ‘Faithful’ are customers that are so satisfied that they share that satisfaction with others. They are the ‘Apostles.
Providing excellent customer service however does not just apply when things are going right. Excellent customer service is also about how you deal with a situation that goes horribly wrong. Many ‘Terrorists’ were ‘Faithful’ customers until they had one bad experience or a sequence of unrelated problems that they categorised as lack of care. Conversely it is possible to turn a faithful customer into an ‘Apostle’ by being good at making amends; a customer’s loyalty is deepened by such a positive experience and they are happy to spread the word.
Of course you can only create an Apostle if you hear about the problem, that’s why it is so important to have good systems to deal with complaints and an easy route for customers to express their dissatisfaction. We’ve all had the experience of a minor complaint being badly dealt with and experienced the desire for revenge this generates! If you don’t hear about a problem and deal with it your potential ‘Apostle’ may be converted to another sect.
These customers can make life hell. They do not follow the satisfaction = loyalty rule. They may be completely satisfied but exhibit no loyalty at all. They tend to be expensive to acquire and quick to depart. This type of customer will follow low prices and often will change for the sake of it seeing the grass as always greener. They follow fashions and although they take as much effort to please as the ‘Faithful’ they often come and go before you make a profit from the relationship.
A ‘Hostage’ can’t go anywhere, they need the product or service that you provide. We often hear “I want this product but if I could buy it from anywhere else I would”, you could probably name a few products and Companies that this is said about!
Companies think that they don’t need to bother about these ‘Hostages’, they can’t go anywhere, they are trapped. But markets change and these customers will defect at the first opportunity often becoming ‘Terrorists’ in the process. A Company that holds hostages gives positive encouragement to a potential rival, easy pickings!
Even if a rival does not provide an escape route ‘Hostages’ are a real pain, they take every opportunity to complain. They make the cost of servicing them as expensive as they can and take every chance to demand special case status. Holding ‘Hostages’ is devastating to Company morale and their negative effect on costs should not be underestimated.
‘Defectors’ and ‘Terrorists’
The ranks of ‘Defectors’ include those that are positively not satisfied with your product of service but also those that are merely ‘satisfied’. Many of the “only just about happy” brigade will defect (many more than managers usually think) if the opportunity arises. The cost of turning over these customers is not to be underestimated, not to mention the prospect of turning them into ‘Terrorists’. Much better to put some of that spend into tuning them into ‘Apostles’. Not all ‘Defectors’ should be kept however. The unreasonable demands of an unhappy customer whose requirements do not fit with what you can provide reliably and profitably take excessive resources and damage morale. For that reason you should ‘loose’ customers who you cannot properly service. But do it sensitively! we have seen many ex-customers ‘fired’ by suppliers who become instant ‘Terrorists’
The worst kind of ‘Defector’ turns ‘Terrorist’ not just vaguely unhappy ex-customer.. We saw a perfect example of this when working with a new build fabricator. A house builder had seriously upset a customer who was mailing the suppliers to gather evidence with which to ‘beat up’ the builder….and the website he put up was something to behold!
‘Terrorists’ exaggerate, the sorry tale of their suffering at your evil hands becomes more extreme with every telling and the facts become lost in the broadcasting of your sins. Unfortunately ‘Terrorists’ are also fanatics and hence will commit their time and efforts to telling their stories, far more so than ‘Apostles’
What to Do?
The first step is to take an honest unbiased measurement of customer satisfaction. This needs to be consistent, broadly applied and repeated so that trends are seen and acted on and so you are able to target your limited resources. The next step is understanding what this information tells you and thirdly the action plan.
| ||Loyalty ||Satisfaction ||Behaviour |
|Highly Loyal, Spreads the good word ||Well satisfied, you are performing beyond his expectations ||Sticks with you, supports your efforts |
|Low, will leave you when the wind changes! ||High (or he’d be gone by now) ||Fickle, no commitment, demanding |
|High (but watch him leave when he can) ||Low to Medium || Trapped, demanding, whines a lot!|
|Low to Medium. At worst None || Low to Medium in a Defector… Negative in a Terrorist||Leaving or if left still unhappy! |
Chris Ball is a Director of MBA and a member of the institute of management consultants, MBA Associates Ltd is a specialist consultancy that partners clients to Recruit, Retain and Develop Top Performing Teams. MBA can be contacted on 01242 821 432 ,email@example.com or through the website at www.mba-associates.co.uk>