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Avoid Betraying your Customers

060124 Over at ClickZ, Pete Blackshaw has a great article which puts a recently published book into context. I've always been skeptical of "easy answers," but Fred Reichheld says the Ultimate Question is all you need to measure success. Pete Blackshaw compares this with his experience collecting customer feedback, and agrees with Reichheld that companies need to watch carefully and catch practices that leave customers feeling betrayed.

Oh, and by the way, the Ultimate Question is "How likely is it that you would recommend this company to a friend or colleague?"

ClickZ: Are You Asking the Ultimate Marketing Question? by Pete Blackshaw

In the course of collecting and analyzing over a million letters and comments, I learned companies that received the highest percentage of love letters trend favorably in the marketplace. In contrast, the companies and brands that served as magnets for negative feedback not only suffered from high rates of negative word of mouth but also were disproportionately vulnerable to regulatory oversight or hostile media scrutiny.

What also jumped from the data is the most intense viral complaints typically emanated from incidents in which companies sought to claim (vs. create) value from their customers. Billing practices in ... telecommunications ..., for example, triggered astonishing levels of consumer hostility and virality. Consumers always felt companies were sneaking in extra "bogus" fees or hiding behind "fine print." Shoppers became viral terrorists over impenetrably bureaucratic rebate programs....

... Reichheld... calls these "bad profits."