Types of Customers.

1) LOYALISTS

Those who have high satisfaction and high loyalty. Sub-segments

are Apostles, who have the highest satisfaction and loyalty scores, and Near Apostles,
who give high ratings for both, but at a slightly lower level.

Hotel brands create Apostles when they deliver not only superior products and services,
but also create an emotional connection derived from the total experience. These
customers are loyal because they love a business. The Ritz-Carlton and Four Seasons
have created apostles who are so satisfied that they want to convert others to share their
experience. These are your most important customers – protect them to the best of your
ability.

2) DEFECTORS –

those who have low satisfaction and low loyalty. A sub-segment

comprises the Terrorists, with the lowest satisfaction and loyalty scores. In addition with
the costs associated with losing them, these customers are so unhappy that they speak out
against a brand at every opportunity.

Hotel brands found in the Defector quadrant include a number of chains whose products
and services have not evolved as quickly as customer expectations have changed.
Customer feedback can uncover changing needs, or dissatisfaction, while there is still
time to address them.

3) HOSTAGES -

those who have low satisfaction, but still report high loyalty. This
typically is due to lack of competition or high switching costs. Customers in this
category feel “trapped.”

Hotel brands in this category often win business simply due to their location (when no
suitable alternatives are nearby) or, because of the strength of their loyalty club.
However, these customers exhibit “false loyalty” - acting loyal even when they are just
waiting for a chance to jump ship. The strategy for these guests is to improve
communication with them - understand and address their concerns to convert them to
Loyalists.

4) MERCENARIES –

those who have high satisfaction, but low loyalty. These customers are
often price-sensitive and will switch easily when they have the opportunity.

Companies in this category may provide superior products and services but do not stand
out from the competition. They may be seen as interchangeable with other similar level
hotels because they have not created a passion for their brand (like the Loyalists have).
For these customers, you may want to assess your pricing versus the competition or
refine your marketing messages to convey value delivered. Incorporating barrier-to-exit
elements in your product may also help retain these guests.

The Apostle Model is especially valuable because it measures both satisfaction and
loyalty, provides a robust method of understanding and grouping customers, and helps
you take action on a customer-by-customer or market-by-market basis. Most importantly,
this model provides advance warning of customer dissatisfaction, so you can take steps to
preserve the relationship before it’s too late.

Jonathan Barsky and Lenny Nash are principles with Market Metrix LLC
(MarketMetrix.com), a firm that provides customer and employee survey programs for
the hospitality industry. For more information, call (800) 239
Key words
Customer:
Apostle
Loyalist
Mercenary
Hostage
Defector
Terrorist
We love this model – created by Harvard Business School professor James Heskett and
developed by the likes of Jones, Sasser, Xerox and Intuit. This can be used in so many
situations including projects where you may not appear to be selling anything. In this
approach you represent customers graphically plotting satisfaction against loyalty:

Terrorists - at the very bottom of the scale you have customers who are extremely
dissatisfied and have very low loyalty. They can do great damage to your business –
particularly in the Internet age – just take a look at this website orangeproblems to see
this sort of action, though blogs, emails and word of mouth are the more likely outlets.

Apostles – at the other end of the scale the highly loyal and highly satisfied customers.
What sets them apart is the fact they actively go out and spread the good word. Some
interesting research carried out by Xerox found that customers rating “extremely
satisfied” were 6 times more likely to repurchase than those ranking “satisfied” the very
next option down. These are your company’s best friends.

Hostages – with medium to high loyalty and satisfaction these customers tend be to
“stuck”. Think of contracts where you are locked in for 12-18 months, not very happy but
no easy way out or where other “costs of switching” keep you locked in to your current
supplier. Monopoly / oligopoly supply situations create hostages too.

Mercenaries – often the bulk of your customer base. Apparently satisfied and loyal these
people tend to switch to the best deal as they see it. In industries with a low cost of
switching they are likely to change supplier quickly and without warning. For example
where there are plenty of reasonable “me too” products then price / special offer is often
the differentiator. Many Mercenaries have the behaviour to deeply ingrained to change,
but others would willingly become Loyalists when they receive the right product and
service combination from a supplier.

Defectors – neither particularly loyal nor particularly satisfied. If they haven’t already
left they are likely to. However they tend not be as vocal as the Terrorists in expressing
their dissatisfaction. They are often one trigger away from leaving. As with Mercenaries
many would willingly become Loyalists when they receive the right product and service
combination from a supplier.

Loyalists - High satisfaction and high loyalty but do not spread the word that much.
What separates loyalists from apostles is really how they spread the word. As well as
being active Apostles need to be very well connected and typically influential – i.e. they
are able to spread the word to lots of people and those people are likely to listen.
However the loyalists can be thought of as the bedrock of your company, they keep on
coming back.

As with all such models the key lies not so much with the analysis, but what you actively
do to improve things for your business. How do you win over the terrorists or increase
the number of apostles, for example. It would be wrong to stand idly by and watch all
your defectors defect, though it may be the case that not all of them could be cost
effectively satisfied and retained.

One area to look at is ensuring the dissatisfied have plenty of places to express their
frustration – if they can’t vent at you then they will vent to others even more vigourously.
Of course it goes further than just listening, you need to make amends too. Look out for
cheap, unempowered, “customer service ” help desks, I typically put down the phone
even more frustrated than when I first called in.

Remember, one shoddy product or one bad piece of service could tip a Loyalist into the
Defector zone – however effectively and rapidly addressing the problem can really
increase loyalty and even create an Apostle.