Page 268 - (DK) The Business Book

266 MAKE YOUR CUSTOMERS LOVE YOU

must be kept high for a long and
happy marriage between producer
and end user. The founder of
Selfridges, Harry Gordon Selfridge,
advised: “Remember always that
the recollection of quality remains
long after the price is forgotten.
Then your business will prosper
by a natural process.”
In the early 1980s, industries
first quantified the impact of
product quality on profitability
through studies such as PIMS
(Profit Impact of Market Strategy).
Before this time, “quality” was not
usually a high priority for industry
leaders, but as research continued
to show the clear link to profitability, and building an emotional Customers are willing to line up
product quality became an experience around it can be enough for bargains, such is their loyalty to
essential factor in strategies for to make customers love you—so particular brands. In Italy, shoppers
wait outside a Burberry store in Milan
attracting and keeping customers. much so that they are prepared to
on the first day of the sale.
pre-order, wait, and line up. This is
Paying a premium demonstrated most clearly in the
Even though a company may not fashion world, where customers all the stages of the buying process.
have the biggest share of the willingly suffer the indignity of Although acquiring new customers
market, it can still generate the scrambling for limited-edition is always an important part of
biggest profit if its customers handbags or shoes, or—in the case marketing strategy, more income
perceive the product quality to be of luxury brand Hermès—wait is usually generated by existing
so high that they are willing to pay years for a bag. However, for most customers. These customers
more for it. In the smartphone businesses this is the exception. will continue to buy the same
market, for example, Apple’s iPhone Customers expect providers product or service, or may begin
has a relatively small share but of goods and services to do purchasing other products from the
garners around 50 percent of the everything possible to win them same provider. The business world
profit. Making a desirable product over and keep them happy through has come to recognize that some
customers are more profitable
than others, and it pays to woo
The Likert scale, created by US psychologist Rensis Likert in the 1930s, profit-inducing customers and
is designed to measure attitudes. The five-point scale offers responses to
a statement, and participants pick the response they most agree with. entice them to spend more.
Considered a good way to get customer feedback, the scale has been In online retail, repeat purchase
criticized for giving skewed results due to its forced set of choices. can be encouraged by email
campaigns tailored to the buying
history of the customer. In the
mail order or direct mail industry,
mailings with special offers or
cross-selling promotions for
complementary products serve
a similar function, while in a store
the astute involvement of the sales
Strongly Agree Neither agree Disagree Strongly staff can directly provide an
agree nor disagree disagree emotional rationale for an additional
sale, though they are also a cost to