Comments on: Bad Profits and the Incredible Power of Word of Mouth http://www.bazaarvoice.com/blog/2006/02/18/bad-profits-and-the-incredible-power-of-word-of-mouth/ Ideas to Help Customers Build Your Business Thu, 18 Mar 2010 15:52:31 -0700 http://wordpress.org/?v=2.8.6 hourly 1 By: Fred Oswald http://www.bazaarvoice.com/blog/2006/02/18/bad-profits-and-the-incredible-power-of-word-of-mouth/comment-page-1/#comment-58643 Fred Oswald Sat, 31 May 2008 00:49:05 +0000 http://bazaarblog.contentrobot.com/?p=23#comment-58643 How true rings this article. We have just been burned by US Air. My wife wanted to move up her departure date by six days. Not only do they want to charge a $100 fee and charge the new (higher) air fare on this flight, they also want to re-price the return flight (which she did not want to change). I understand that Southwest does not do this to its customers. Therefore, Southwest will get new customers (us) next time they are flying to (or near) somewhere we want to go. How true rings this article.

We have just been burned by US Air. My wife wanted to move up her departure date by six days. Not only do they want to charge a $100 fee and charge the new (higher) air fare on this flight, they also want to re-price the return flight (which she did not want to change).

I understand that Southwest does not do this to its customers. Therefore, Southwest will get new customers (us) next time they are flying to (or near) somewhere we want to go.

]]> By: Bazaarblog » Blog Archive » Netflix vs. Blockbuster: Round Two http://www.bazaarvoice.com/blog/2006/02/18/bad-profits-and-the-incredible-power-of-word-of-mouth/comment-page-1/#comment-1120 Bazaarblog » Blog Archive » Netflix vs. Blockbuster: Round Two Wed, 06 Dec 2006 20:38:56 +0000 http://bazaarblog.contentrobot.com/?p=23#comment-1120 [...] Because of the power of negative word-of-mouth, and the ability for Netflix to leverage the “bad profits” that Blockbuster had been collecting from its customers for late fees, round one of Netflix vs. Blockbuster was a total knockout. I wrote about this in February (and first referenced the concept of bad profits for this blog) and then revisited the battle in June and in my most recent post on bad profits a few weeks ago. [...] [...] Because of the power of negative word-of-mouth, and the ability for Netflix to leverage the “bad profits” that Blockbuster had been collecting from its customers for late fees, round one of Netflix vs. Blockbuster was a total knockout. I wrote about this in February (and first referenced the concept of bad profits for this blog) and then revisited the battle in June and in my most recent post on bad profits a few weeks ago. [...]

]]> By: Bazaarblog » Blog Archive » Bad Profits and Enjoy the Free 411 Calls http://www.bazaarvoice.com/blog/2006/02/18/bad-profits-and-the-incredible-power-of-word-of-mouth/comment-page-1/#comment-1070 Bazaarblog » Blog Archive » Bad Profits and Enjoy the Free 411 Calls Fri, 01 Dec 2006 14:13:24 +0000 http://bazaarblog.contentrobot.com/?p=23#comment-1070 [...] Earlier this year in February, I wrote about Blockbuster vs. Netflix. The main word-of-mouth lesson learned in that post was one of “bad profits“. Netflix simply took Blockbuster’s negative word-of-mouth regarding late fees and modelled their entire business model and ad campaign around it - “the end of late fees”. It worked, and Netflix took off like a rocket. As I wrote in February, Netflix was worth twice what Blockbuster was at the time. That situation hasn’t changed - Netflix is worth $2 billion today while Blockbuster is worth $1 billion (they are both trading higher due to the more robust stock market we are in). “Bad profits” create an oportunity for entrepreneurs or established companies to come along with a competing service that is highly disruptive. [...] [...] Earlier this year in February, I wrote about Blockbuster vs. Netflix. The main word-of-mouth lesson learned in that post was one of “bad profits“. Netflix simply took Blockbuster’s negative word-of-mouth regarding late fees and modelled their entire business model and ad campaign around it – “the end of late fees”. It worked, and Netflix took off like a rocket. As I wrote in February, Netflix was worth twice what Blockbuster was at the time. That situation hasn’t changed – Netflix is worth $2 billion today while Blockbuster is worth $1 billion (they are both trading higher due to the more robust stock market we are in). “Bad profits” create an oportunity for entrepreneurs or established companies to come along with a competing service that is highly disruptive. [...]

]]> By: Brett Hurt http://www.bazaarvoice.com/blog/2006/02/18/bad-profits-and-the-incredible-power-of-word-of-mouth/comment-page-1/#comment-3 Brett Hurt Wed, 08 Mar 2006 04:00:01 +0000 http://bazaarblog.contentrobot.com/?p=23#comment-3 Thanks Leo. That is good feedback and a good idea. We have been thinking about the right way to implement something like the Net-Promoter Score into our solution. Thanks Leo. That is good feedback and a good idea. We have been thinking about the right way to implement something like the Net-Promoter Score into our solution.

]]> By: Leo Romero http://www.bazaarvoice.com/blog/2006/02/18/bad-profits-and-the-incredible-power-of-word-of-mouth/comment-page-1/#comment-2 Leo Romero Tue, 07 Mar 2006 10:31:43 +0000 http://bazaarblog.contentrobot.com/?p=23#comment-2 I used Bazaarvoice at the CompUSA site, and thought it was pretty cool. But I did have a problem with the question "Would you buy this product again?". It wasn't a product I would buy again (didn't need two), but it was certainly something I would recommend to a friend. You might want to consider using Reichheld's net-promoter approach instead, e.g. "Would you recommend this product to a friend?" If you could go further, and use the 11-point NPS scale on the question "How likely are you to recommend this product to a friend?", that might give you and your clients even better results. I used Bazaarvoice at the CompUSA site, and thought it was pretty cool. But I did have a problem with the question “Would you buy this product again?”. It wasn’t a product I would buy again (didn’t need two), but it was certainly something I would recommend to a friend. You might want to consider using Reichheld’s net-promoter approach instead, e.g. “Would you recommend this product to a friend?” If you could go further, and use the 11-point NPS scale on the question “How likely are you to recommend this product to a friend?”, that might give you and your clients even better results.

]]> By: Customer Service Reader http://www.bazaarvoice.com/blog/2006/02/18/bad-profits-and-the-incredible-power-of-word-of-mouth/comment-page-1/#comment-4 Customer Service Reader Tue, 07 Mar 2006 09:49:04 +0000 http://bazaarblog.contentrobot.com/?p=23#comment-4 <strong>Ultimate notes</strong> Notes on The Ultimate Question, by Fred Reichheld The average Net-Promoter Score (NPS) for U.S. companies is less than 10% Senior managers are delusional. 96% of senior managers said they were "focused" on the customer. 80% believed they delivered a 80% believed they delivered a "superior experience" to their customers. But when their customers were surveyed, only 8% of their companies were given a superior rating. See Ultimate Notes <a target="_blank" href="http://customerservicereader.typepad.com/customer_service_reader/2006/02/ultimate_notes.html">here</a>. Ultimate notes

Notes on The Ultimate Question, by Fred Reichheld The average Net-Promoter Score (NPS) for U.S. companies is less than 10% Senior managers are delusional. 96% of senior managers said they were “focused” on the customer. 80% believed they delivered a 80% believed they delivered a “superior experience” to their customers. But when their customers were surveyed, only 8% of their companies were given a superior rating.

See Ultimate Notes here.

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