The value of the last mile, “what does it take to make you tell a great customer experience story?”
Vilfredo Pareto’s principle, otherwise known as the 80/20 rule*, is one of those ideas that just keeps popping back into my head. For me the rule has become a bit of a metaphor for stating that things just aren’t as easy as you thought. i.e.
“you can concentrate on the easy big things but that real power and the real difference is made by the small”.
Let me explain. I’m currently having a loft extension built and it really looks great… at least 80% of it does. But it seems impossible to get the builders back in to complete that last 20. Looking at it through the builder’s eyes I guess this makes sense, after all they’ve had 80% of the money, why bother with that last 20%, particularly when it’s the difficult stuff. But for me of course the most important part IS the finishing, those fussy details that make the difference between having a garden shed on my roof and a new high-tec study.
What my builders don’t understand is that it’s the last 20% where the real value exists. Not just for me but also for them. Within that 20% exists the difference between feeling ripped off and feeling so proud of something that you’ll go out of your way to promote another person’s business.
I could be such a good advocate for my builders’ business. Word of mouth marketing is so strong and so cheap why would they want to squander it?
Did you know that:
- companies that focus on loyalty have 15% lower operating costs than comparable companies that don’t?
- or that their growth rates tend to be 220% above average? (from The loyalty Effect by Fred Reichheld).
- or that satisfied customers tend to tell an average of 5 to 8 people about their experience with a company or product,
- while a dissatisfied one tells 10 to 16 people? (source: TARP).
Still my builders have just turned up this morning and they’re nice guys. Maybe I’ll get my study soon. After all I’m sure I read somewhere that people who’ve had a bad experience rescued by a company make stronger advocates than those who get the perfect experience from the start!
* The rule was conceived as an observation on wealth and population distribution in Italy at the turn of the 18th century – 80% of the money in the hands of 20% of the population.
[UPDATE: The loft study is now complete and the views are just wonderful]
Technorati tags: Customer Experience, Sedley, Satisfaction
