Last year, customer loyalty guru Fred Reichheld attracted a lot of
attention with his book The Ultimate Question that claimed the answer
to one question was a better indicator of future sales than any other
customer-satisfaction measure. That’s right, one simple question
- "Would you recommend us to a friend?" – offering
the key to one complicated forecast. The secret formula had already been embraced
by General Electric and American Express, among others, and pushed Reichland’s
book to the top of the Wall Street Journal’s list of business best
sellers.
One simple question? For every company? How can that be? The simplicity
of Reichland’s
question hovers visibly like the tip of an iceberg, but the great bulk
of his solution lies underneath. It’s all in the execution, as
they say. So while there is no single or simple path to measuring customer
loyalty or engaging customers, companies often won’t get there
without asking the right question.
In 1999, Motts Inc. turned around
its Clamato Tomato Cocktail brand in the United States by asking, “Where
will our marketing dollars be most effective?” Marketing
research had consistently demonstrated that the market for Clamato was
limited by, well let’s say consumers’ lack of affection for
clams. That year, Motts finally identified a market segment that had
no “clam barrier,” which
in fact loved seafood in a product. Within three years, 70 per cent of
all business was generated through sales to Hispanics and more than 40
per cent of those sales were centered in Los Angeles. Motts built on
that success by introducing a new, fortified drink called Campeste, meaning "from
the countryside" in
Spanish, and strengthened their outreach efforts to Hispanic businesses.
(In Canada, there is no “clam barrier,” and the Anglo market
is an enthusiastic consumer of Clamato – who said this was easy!)
In 1990, American Express looked to revitalize a still healthy, but
flagging brand by asking “Who can we serve better than anyone else?” Among
a number of “deeply loyal customers” were “points
junkies,” a
small, but prosperous group of managers, executives and consultants who
strove to accumulate frequent flyer and hotel guest points. In late 1994,
AmEx released the Rewards Plus Gold Card to help these travel buffs maximize
their accumulation of rewards and added additional benefits, such as
travel insurance and information. Between 2002 and 2005, spending by
individual and small-business card members grew by more than $2,000 and
$9,000 per account – a total charge volume
increase of more than US$100 billion.
The lesson within these stories is the ability to ask the right question
starts with the customer, but the knowledge leading to that question
often lies within the organization - customer solutions that are hidden
in plain sight. |