A quick note and a thanks to the folks for the fwd of this article from Harvard Business Online on “Companies and the Customers Who Hate Them,” an excerpt from the Harvard Business Review article by Gail McGovern and Youngme Moon…
“The Idea: A company’s most profitable customers may be those who make the worst purchasing decisions. Consider retail banking. Depending on the minimum balance consumers agree to keep in their accounts, banks set particular interest rates and fees. If a customer’s balance falls below the minimum, he pays penalties. If it climbs well above the minimum, he’s stuck with a low interest rate. Either way, the bank wins; the customer loses.
“Sometimes all it takes to trigger a mass defection from a company-centric firm is the appearance of a customer-friendly competitor—one that puts customer satisfaction and transparency first.
“Example: Virgin Mobile USA offers a pay-as-you-go pricing plan with no hidden fees, no time-of-day restrictions, no contracts, and straightforward, reasonable rates. It has nearly five million subscribers and a customer churn rate well below the industry average. Customer satisfaction hovers in the 90th percentile. And more than two-thirds of customers reported recommending Virgin to friends and family.”
If you are in a position to work with and listen to customers, what are you doing to provide greater value to your customers?
The full article is available here.