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National
Clothesline
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Staying ahead of the loyalty curve
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Since it began operations in 2000,
JetBlue has become the envy of the airline industry. JetBlue
dominated J. D. Power and Associates’ most recent study
on airline passenger satisfaction, beating all of the
traditional carriers like United and American by incredible
margins.
How did this upstart airline make such a
huge impact in such a short time?
Most importantly, they instituted a
culture built on friendliness and quality service. They
insisted on strict hiring standards and instilled a passion
among its employees to do things the right way.
“We started from day one with the
premise that we wanted to bring humanity back to air
travel,” CEO David Neeleman said. “We knew if
people liked the experience of air travel more, if the whole
experience with interacting with our company was better, then
we could levitate above a commodity business.”
Simply stated, JetBlue set out from the
beginning to create an airline built on advocacy, not just
satisfaction.
But satisfaction is worthless unless it
translates into increased business. Compared to other airlines,
JetBlue has an unprecedented number of advocates who do in fact
go out of their way to fly their airline. Just as their CEO
predicted, JetBlue advocates will drive to a less convenient
airport or fly at a less convenient time to fly this airline
instead of a competitor. All of this has led to JetBlue having
16 consecutive profitable quarters.
The reality is: just keeping your
customers merely satisfied in today’s competitive
environment is like running in place. By meeting but not
exceeding the basic levels of customer service and quality, a
company is leaving itself vulnerable to attack from just about
every angle, including price.
Apathetic customers are willing to stay
loyal to your business, but they are unlikely to endure an
inconvenience or pay a premium to do it. And they are always
open to marketing messages from competitors. Given a better
price, they are far more likely to give it a try. And they are
definitely not advocates, who will praise your services.
An interesting point about customer
satisfaction: there is less change in behavior associated with
improving satisfaction in the middle of the satisfaction curve
than there is on either end. See the chart.
As you can see, the loyalty line is
really more of a curve. The curve is flatter in the middle
(home of the apathetics), but becomes steeper on each end where
the line either rises into advocacy or drops into the realm of
assassins.
This chart illustrates the typical
satisfaction vs. loyalty curve. The flattening in the middle
reflects the fact that unless a cleaner is truly able to
separate itself from the middle of the pack, small increases in
customer satisfaction within the simply satisfied range will
yield a relatively small impact on behavior.
In the eyes of the customer, best is
always better than good — airline travelers would prefer
a sandwich over peanuts.
Providing the best, however, just
isn’t always economically feasible. Not every cleaner can
be the Ritz-Carlton; someone has to be the Holiday Inn, and
someone even needs to be the Motel 6. You just need to balance
the financial benefits of any action against the cost.
Just because you’re a discount
cleaner doesn’t mean you shouldn’t spend money to
improve customer satisfaction. You may find providing coffee
and donuts in the morning is cheap compared to the increase in
satisfaction it brings.
The analysis needed to make this decision
isn’t that difficult. It just requires looking at things
in a different way:
First, determine how what you change will
change the way your customers feel about your services
(measured in terms of customer satisfaction). In other words,
will what you do significantly improve your customers’
satisfaction?
Secondly, determine how this improvement
in customer satisfaction will impact how your customers behave
(loyalty, word-of-mouth, willingness to pay premium prices,
etc.).
This is important, because customer
satisfaction is completely meaningless unless it translates
into profit-generating behavior on the part of customers. Until
you really think through the cost versus benefit of increased
customer satisfaction, adding new services, new technology or
additional staff may be a waste of time and money.
You may be asking yourself, “Why
all the talk about the need to turn apathetics into advocates
if the cost to do it outweighs the benefits?”
The answer is that cleaners need to be
aware of the possibility that they could be wasting their
satisfaction dollars.
The reality is that most businesses
underestimate the value of improving customer satisfaction and
are more likely to make the mistake of not implementing an
improvement. This usually occurs because they fail to see the
long-term benefit of increased satisfaction.
Great companies build advocates one at a
time. They understand all the different ways they touch their
customers so they can maximize their return at each touchpoint.
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