The psychological effects mentioned in the context of a company’s operation have significant implications for customer impressions and retention. Here’s a further elaboration on the two effects mentioned:
The 20/80 rule: This principle, often referred to as the Pareto principle or the law of the vital few, states that roughly 80% of the effects come from 20% of the causes. In the context of economics, it means that 80% of the economic value is generated by only 20% of the population or customers. Understanding this rule allows companies to focus their attention and resources on the most valuable customers.
When applying the 20/80 rule to impress and retain customers, it suggests that you should prioritize understanding the customer’s background, preferences, and pain points rather than solely focusing on the product itself. By spending 80% of your time addressing these aspects, you can tailor your offerings to meet their specific needs and create a stronger connection with them.
Broken windows theory: The broken windows theory, originally introduced in the field of criminology, proposes that visible signs of disorder and neglect in a community can lead to an increase in crime and antisocial behavior. The theory suggests that if a broken window in a building is left unrepaired, it sends a signal that no one cares, leading to further damage and deterioration in the surroundings.
In the context of a company’s operation, the broken windows theory highlights the importance of promptly addressing any issues or damage to the brand’s reputation. If there are negative elements or flaws in your branding, ignoring or neglecting them can lead to a cascading effect, where the perception of your company worsens, potentially leading to customer dissatisfaction or even loss of trust.
By recognizing and promptly correcting any weaknesses in your branding or customer experience, you can prevent further damage and maintain a positive reputation. Timely actions to address problems can help ensure that customers perceive your company as reliable, trustworthy, and committed to their satisfaction.
In summary, understanding and applying psychological effects like the 20/80 rule and the broken windows theory in a company’s operation can contribute to impressing and retaining customers. By focusing on understanding and meeting customer needs while promptly addressing any brand-related issues, companies can create a positive customer experience and safeguard their reputation.