Classically firms are inward focusing asking questions such as how satisfied are our customers or how likely are they to recommend US. These are all great questions but they all suffer the same problem, they do not differentiate your company in terms of the market.
Think of it this way:
- I can say I am very satisfied with your firm, but I can say pretty much the same thing about many other organisations as well
- I can say I would highly recommend your firm, but I can say pretty much the same thing about many other organisations as well.
This is important for when customers consider using your services, brands or products they are always consciously or implicitly playing a game of compare and contrast. Your firm does not sit in isolation; it is always set in market context.
So what is a differentiating question, one that considers these market conditions?
One way is to simply ask a question of preference; to what extent do you prefer company x over the competition? As preference over competition necessitates an attitudinal response based on how you are set against the market this seems to be further development on from mere considerations of your firm in isolation. Furthermore, by the way the question is framed; you are looking towards a singular preferred firm not a characteristic that can be shared at the highest levels between firms
Even better when it is ‘emotional preference’, when consumers really ‘feel’ that difference, then you are talking about achieving that hallowed blue water between yourself and the competition. Which of course then leads the answer to the question
‘what drives or destroys emotional preference,’ to be much better focused on effective and differentiated returns.
What’s your Emotional Preference Score (EPS)?
Captives – here there is a low emotional preference to a firm over the market competition but customers still spend highly because they are captured. There are many examples of this, for instance in a convenient grocery store you’re not keen on but go to regularly or your local electricity and gas provider where it is difficult to move between providers. The risk from being in this box is that you have no platform for growth, are open to competitive entry and are at risk internally of creating an inert short-termist and no doubt over-measured culture. Strategy: redesign your experience fundamentally
Inerts – here you are basically just about in business. You may get passing trade or be in a monopolistic situation for certain low need items.
Strategy: completely overhaul your business.
Latents – this is an interesting market position. You have high emotional preference but because of a lack of diversity or communication channels you have failed to grow your share of wallet. Because we are comparing you in the minds of the consumer to your market potential we can see that this is a great platform for growth.
True Loyals – here you are both emotionally preferred and you are getting great share of wallet. This requires a maintenance strategy to keep ahead of the game. Strategy: maintain leadership.
Looking at the market in this way, perhaps you can see how dangerous it is just to make an assumption that high CSAT or Net Promoter Score® (NPS®) is the end of the story. You could for instance assume your customer base likes you, but they don’t really differentiate that ‘liking’ emotionally from others in the market. You may think you have True Loyals but in fact you have Captives; who are satisfied with you, recommend you, but would not prefer you over other alternatives.
Interestingly this way of looking at the market also means that you can start to see that just because you have a low share of wallet does not mean you are doing badly; you may have a great platform for growth that needs to be expanded: consider those who don’t use you as well as those who do! Think of Apple or Virgin and how they expanded in terms of brand diversification or product innovation.
- Define your EPS score
- Define the drivers and destroyers of EPS
- Plot your strategy
- Journey Map your ‘to be’ experience
- Pilot and measure change
|Steven Walden is VP Consulting and Thought-Leadership for Beyond Philosophy. Steven has 17 years Strategy Consultancy experience directing and designing strategies for major B2C & B2B firms. At Beyond Philosophy, the Global Customer Experience Consultancy, he is a Thought Leader and Innovator, directing engagements to assist leading firms to transform through Customer Experience. A world-leader in emotional experience his skills lie in innovation, thought-leadership, strategy consultancy and Qual/ Quant research. He is a regular speaker at conferences, blog writer, CE Trainer and international author.