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Archive for September 7th, 2006

Loyalty continued - or "Why I became a ‘Promoter’"

Posted by Carl on September 7, 2006

In the previous post, I wrote about a different metric for judging companies - rather than just looking at the financials of a corporation, you tried to measure how many ‘promoters’ they had. To determine if a customer was a promoter, you asked them:

“How likely are you to recommend us to a friend?”.

Responses were graded on a scale of 1-10, 9s and 10s were deemed ‘promoters’.

As I’ve indicated before, historically I had not been a promoter. Something changed in late 2005, and after reading the article discussed in the last post, I realized that it might be important to identify what caused the change. One of the main reasons, I suspect, is that my kids were a little bit older - Zak at 8, and Rebekah at 2. The park was a place where I felt comfortable enough to let Zak go off on his own and there was enough going on to keep Bekah occupied while I watched the game. People were friendly - fans, security staff, employees, everybody, and genuinely so. Parking was cheap at $3, and concessions were fairly priced.

But that still didn’t quite explain the change. I stumbled on this post over on Howard Bloom’s blog. Howard is “The Sports Doctor” and the publisher of ‘Sports Business News.com’. Here’s the edited version:

Darwin sold the Lynx to Pecor after the 2000 season for $7 million. Pecor owned the Vermont Expos. Pecor’s first (and best) decision was to move Kyle Bostwick his young Vermont general manager to Ottawa. Nine years after Ottawa was awarded a Triple-A franchise not only did the team have a general manager who understood the importance of the game day experience for minor league baseball fans, but Bostwick would be provided the tools he needed to work with. The Lynx had outstanding general mangers each and every year Darwin owned the team. Each general manger faced insurmountable challenges before Pecor took over the team.Determined to ‘get it right’, Boswick introduced a series of game-day promotions, added a family fun zone, reducing the price charged for parking and introduced fan-friendly aggressive ticket pricing and policies. Bostwick wasn’t going to reinvent the wheel, he was going to try and introduce the joy of minor league baseball to a market that had, had a minor league baseball franchise for eight years, but hadn’t been offered the minor league baseball experience… Bostwick hired a full front office staff (another missing element during the Darwin era)… When and if professional baseball returns to Canada’s capital here’s hoping the group entrusted to manage and operate the franchise follows the examples set by Ray Pecor and Kyle Bostwick and ignores the legacy of mismanagement left by the people who brought Triple A baseball to Ottawa in 1993. (Read the entire article here.)

That captured it - the ‘minor league baseball experience’. There was just so much stuff going on. Zak wanted to go to the picnic area to play catch with kids he’d just met. Bekah wanted to watch the kids playing musical chairs between innings. Or go down the slide. Or get her face painted. Or get an autograph from Keith Reed. It reminded me a lot of going to a country fair - but this was in the city, 70 some odd nights a year, less expensive and had a much more inviting atmosphere. In this past season alone, we’ve met the winners of ‘The Amazing Race’, Dennis Martinez ‘El Presidente’, and most notably George Shuba (more on that later). My kids have gone trick or treating in July, done ‘The Twist’ in centrefield, played musical chairs, movie trivia…. On just about every night at the park, I would wind up telling Zak what fantastic event was going to happen at the next game. I began to look forward to coming back.

And that, my friends, is what turned me into a ‘promoter’.

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Loyalty

Posted by Carl on September 7, 2006

Took a look at one of my wife’s professional organization’s magazines yesterday. The cover story was about “loyalty”. Now, anyone who’s read what are, generally speaking, trade magazines about professions they’re not a part of can tell you that they’re usually good for putting you to sleep. This one was different though, and it got me to thinking about the Lynx. They interview a “Loyalty Guru”, a Fred Reichheld. I won’t bore you with everything in the article, but he makes a distinction between good and bad profits. “Good profits are the kind that are earned as a result of delivering great experiences and value to a customer, turning them into loyal promoters; bad profits are those that are earned at the expense of customer relationships - that milk customer trust. But good and bad profits are indistinguishable from each other on a spreadsheet.

He argues that for that reason, companies need to look at more than financial statements to gauge how they’re doing. Customer satisfaction is key - but how do you measure it? He argues that surveys are, for various reasons, not effective. He looked at Enterprise Rent-A-Car’s survey - which contained just two questions and was impressed. He wondered if there was one single question “that could lead to information about repurchase and referrals in other industries”.. I found that yes, there is one ‘ultimate question’ for most companies, and it is this:

‘How likely are you to recommend us to a friend?’

Apparently, on a scale of one to ten, people who give a company 9-10 are considered “promoters”. 0-6 are considered “detractors”. “A company’s true ‘balance sheet’ is the percentage of customers who are promoters - the nine and tens - minus the percentage that are detractors… these people hate you; they complain and make your employees embarrassed to work there…. The challenge for good companies is getting more promoters”.

I’ll post more thoughts on “Loyalty” and how I went from being a 7 or 8, to a promoter, later this evening.

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