I am reading an interesting book: The Ultimate Question: Driving Good Profits and True Growth by Fred Reichheld, which introduces a notion I perfectly agree with: profits are not all the same, and the difference lies in the way they have been pursued. The introduction to the book outlines the logic of the Author’s reasoning: How to distinguish true growth from apparent growth? How to tell good profits (resulting in lasting and sustainable expansion) from bad profits (which turn back against a company)? The Author offers a very clear answer to those questions: what makes profit good or bad is customer loyalty. If customers are satisfied with a service and behaviour, they will contribute to its economic success. Conversely, if customers perceive they have been cheated, ignored or abused – for example by inadequate products, unfair clauses in contracts, or lack of price transparency – they will likely not only reduce their purchases, but also speak about their negative experiences to other people, causing damage to the company.
A few recent examples? Alitalia advertises its flight from Rome to New York for 239, then, lower down, in small (very small) type “+ 55 airport and luggage security taxes” and finally, a little bigger, on a band advertising also other flights, “the stated prices do not include 170 of fuel surcharge + sales service up to 45”. Starting from 239, it adds up to 509: more than twice as much.
A few days ago, Rai 3 showed the case of a group of dissatisfied passengers who complained about the inaugural journey of Costa Allegra to China. Without getting into the merit of who was right, I was surprised by the attitude of the Costa representative, who was defending the adequacy of the ship by confidently stating that it had been built in 1992. One of the angry passengers retorted that no, it was not so; under a different name, the ship dated back to the ’60s. Answer: the ship had been entirely re-built in 1992, preserving just a few pieces of sheet steel of the original vessel. A question arises naturally: if it was just a matter of salvaging some steel, why embark on such a major effort instead of simply building a new ship? Maybe they were playing with words: built in 1992 / transformed from a ship of the ’60s in 1992.
Both large companies with a massive marketing staff and costly advertising campaigns and smaller businesses where these functions are performed on an artisan scale often underestimate the significance (and the return) of a correct relationship with customers. I suggest to read the book above mentioned.
Translation of the Italian
editorial by Paola Praloran
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