Printed
with permission from TCI
Management Consultants. A group of senior-level management
consultants, offering strategic planning and marketing services
to a wide range of public and private sector clients.
The
Butterfly Customer - Capturing the Loyalty of Today's Elusive
Consumer
by Susan M. O'Dell and Joan A. Pajunen
John Wiley
and Sons, Toronto, 1997
"Butterfly
customers" are defined by O'Dell and Pajunen to be
people that flit from one store or supplier to another,
always searching for a lower price or a different shopping
experience. They have no loyalty to any particular store,
and are always in search of a better deal or a new promotion.
"Constantly
in motion for the best deal, the greatest choice, the latest
trend, this creature selects a store or brand apparently
at random, often abandoning the tried and true for the newest,
the closest, the cheapest.
It's
exhausting to be a butterfly and disheartening to serve
one. There isn't one single store that captures all of their
interest, dollars or oh-so-precious time. Consumers have
been transformed from loyal, reliable and predictable patrons
into transients - here today, flitting across the street
tomorrow." (p. 1-2)
Butterfly
customers have been spawned by the proliferation of options
in the retail environment, in the last few decades, including
suburban shopping malls that pulled people away from traditional
downtown retail and service environments, and national chains
of specialty stores that can take advantage of huge purchasing
power to obtain the lowest prices for consumers. This is
compounded by the fact that many consumers no longer trust
retailers and service providers to deliver what they say
they will, and to live up to expectations.
According
to the authors, there are eight characteristics of Butterfly
Customers:
they
will readily accept offers to be loyal customers (through
signing up for club memberships, points programs, etc.)
but these programs will not truly create loyalty
they
move across market segments, buying a luxury car one day
and waiting in line to save $1 on a pair of socks the next
they
are intelligent, educated and informed
they
are cynical and skeptical, tending to disbelieve advertising
messages and always reading the fine print
they
would rather switch than fight - "The current reduction
in customer complaints has less to do with a great improvement
in service than it does with a collective shrug. What energy
the Butterfly Customer does have is devoted to switching,
not fighting." (p.8)
they
are endlessly interested in the experience of others, and
word of mouth is seen to be the most trusted and reliable
source of information
they
are not embarrassed to be Butterflies, and see this pattern
of behavior as being praiseworthy in today's economy
they
know their own worth
"It's
a wonderful time to be a Butterfly as retailers and service
providers everywhere strive to entice this elusive new breed
of customer. Every day customers are bombarded with new
concepts, new products and new services to try. And there
are sales and special offers galore, all designed to lure
prospective buyers from retailer to retailer, from bank
to bank, from credit card to credit card, and from brand
to brand looking to see what's new, what's better, what's
different." (p.10-11)
From the business perspective, though, Butterfly Customers
are expensive to win (as there are significant costs entailed
in getting their attention in the first place), difficult
to service (as they are highly demanding), and almost impossible
to keep.
However,
all is not lost for the poor retailer....At the other end
of the spectrum, the authors propose the concept of the
"Monarch", a loyal customer who will return again
and again because he or she trusts the retail or service
operation and knows that what they expect will be what will
be delivered.
"The
Monarch is still a butterfly. The characteristics we described
earlier still describe them. They are intelligent, curious,
suspicious, and know their own worth. But the Monarch is
a species of butterfly which, despite taking various byways
and pathways, can be counted on to return to the familiar
on a regular basis.
These
loyal Monarch Customers are less expensive to attract. It
usually doesn't take an expensive advertising campaign or
give-away promotion to entice them back to your business.
They take less transaction time from your staff and are
quicker to buy because they are less skeptical and don't
need a large amount of convincing. They are more willing
to buy and less price sensitive all around." (p.35-36)
The
authors describe five characteristics of Monarchs:
Monarchs
always return - sooner or later
Monarchs
often send someone in their place (i.e. recommending and
referring other customers)
Monarchs
always have an opinion - unlike the disinterested Butterfly
customers who would rather switch than fight, Monarch customers
always have an opinion that they will share if asked
Monarchs
share their homework, and will freely provide information
on what the competition is doing
Monarchs
are forgiving and giving: "Monarch customers have a
remarkable tolerance for the sheer ordinariness of service
life. They know the coffee won't always be at exactly the
right temperature and even the perkiest of airline attendants
sometimes has a bad day. Customers who are loyal put elasticity
in their transactions with you. They allow you to screw
up once in a while and often even pitch in to help when
the going gets rough." (p.39)
So,
the big question becomes how do you create Monarchs from
Butterflies (or, on the other side of the coin, how do you
prevent your existing loyal Monarchs from abandoning you
and becoming Butterflies)? O'Dell and Pajunen maintain that
it boils down to building (or re-building, as the case may
be) trust with the customer.
They propose the idea of the 'service kaleidoscope' - a
three dimensional way of looking at a business to determine
the extent to which it breeds trust in the customer. These
three dimensions are:
the
media dimension
the physical dimension
the people dimension
If the
three dimensions are in harmony with one another, then the
customer knows what to expect (and gets it), and develops
a feeling of trust with the business. If the three dimensions
are out of synch, then a feeling of discomfort and distrust
will develop.
So, for example, if the media message about a retail environment
suggests that offers upscale and quality merchandise, yet
the physical surroundings suggest 'bargain warehouse' and
the staff are surly and untrained, the customer will experience
dissonance and not trust the business. (In O'Dell and Pajunen's
terms, their "trust account" will be depleted.)
They likely won't be back, having turned into a Butterfly
Customer for someone else. Loyal Monarch Customers can be
found in those environments where the three dimensions are
in accord and support one another.
The
authors have developed a self assessment tool for a business
(which they call a '3-D audit', as it focuses on these three
dimensions) and much of the book outlines the questions
to be asked and procedures to be followed in undertaking
this kind of assessment.
Another
fundamental point that they make is that there needs to
be another kind of three-dimensional harmony in place for
a retail or service business to work - this time between
the managers, the employees and the stockholders. This underscores
for them the importance of leadership in creating the kind
of environment that customers will trust - as this will
create profits for the business, jobs and wages for the
employees, and a return-on-investment for the equity owners.
One
interesting point of contention for the authors that they
deplore frequently throughout the book is the 'service excellence'
feats that some other writers have lauded as examples of
outstanding customer service (the sort of thing where a
hotel front desk clerk charters a plane to return a briefcase
that a guest has left). They say that these sorts of things
are merely silly stories that raise expectations among consumers,
but ultimately only end up costing everybody more (after
all, somebody had to pay for that flight, most likely subsequent
customers through prices that had to be raised to pay for
all these feats of service heroism).
The
Butterfly Customer is an interesting (if somewhat lightweight)
book, with undoubtedly several good ideas about improving
retail and service offerings to attract more loyal customers.
Whether it really is as possible as they seem to suggest
to create and keep loyal customers in this era of ever-proliferating
consumer options is an open question at this point.
The
above summary has been provided to you compliments of TCI
Management Consultants
