The concept of 100 plus and the equity theory.
I call the process of exceeding what clients anticipate they will get from a service experience, 100 plus. Any business having the 100 plus mentality will have a very good chance of making it, even in a tough economy.
As clients compare their expectations with the actual or real service received, they will feel in one of the following three ways:
Service was not as good as was expected
Service met expectations
Service exceeded expectations
In condition number one, the client will probably defect to another provider as soon as he or she has a chance to do so.
In condition number two, a satisfied client but not that satisfied, the client will remain a client until another better offer comes along. This client will never become a loyal client.
In condition number three, the service was better than anticipated. Either the client thought the interaction would be extremely good and it was, or the client thought it would not be particularly good but it wasn’t as bad as anticipated. If positive anticipations were sufficiently exceeded or negative one’s proven to be unfounded, this client is a very good candidate for repeat business and eventually becoming a loyal client.
To understand this concept fully, we need to go over a theory from the field of social psychology. Don’t stop reading, please. Social psychology isn’t boring at all.
So, let’s explain “equity theory” which in my opinion provides a solid theoretical basis for predicting that the 100 plus client will become a repeat client. J. Stacy Adams, PhD articulated this theory in the mid sixties. It has stood the test of time to become a widely accepted predictor of some human behaviors in certain situations.
Equity theory starts with the premise that human beings constantly go into and out of various kinds of relationships ranging from the intimate to the superficial. The buyer-seller relationship is applicable to this discussion.
Once in a relationship, even a brief one, people on a regular basis, assess the relative equity or fairness of their involvement, compared to other people. In plain language, they check to see if what they give to the relationship seems suitable or advantageous to what they are getting out of it. .
A very simple example of a relationship that is imbalanced would arise if you give someone a present and get nothing in return.
Inequitable relationships feel clumsy and often embarrassing. Common courtesy dictates that the other person do something to even up the relationship. When invited to dinner, people usually bring something to share at the meal or a gift to the hostess or someone in the household. This is ingrained in our culture. Takers in our society who take but never give will face a lonely future, because sooner or later, the giver will simple get tired of giving without getting anything in return.
In a work environment, people who, for example, are paid less for doing the same work as others, feel a sense of inequity. And their productivity will suffer. No one likes to be taken advantage of.
The theory goes beyond simply mentioning situations where people don’t feel well treated. It also gives us an idea of different behaviors. For example, they will:
Ignore or rationalize the inequity. The offended person makes up a reason such as “She deserves to be treated better than I do” or “The world isn’t fair but who am I to fight it”.
Demand restitution. The offended person goes to the supervisor to demand her salary be raised to an acceptable level or the client wants his money back when the quality of a product is not acceptable.
Retaliation. The offended person tells others about how bad the company is, does harm to the person seen as the cause of the inequity, or engages in outright sabotage.
Withdraw from the relationship. The offended person quits the relationship and never comes back.
A couple of days ago, I went to a restaurant in Atlanta that was supposed to close at 10pm and at 9.50pm, they didn’t want to take care of us. It was cold and we tried convincing the manager to let us in since we were hungry. We weren’t able to convince him. We will never go back to that restaurant again.
I could write a letter to the President of the chain but to tell you the truth, I am simply too busy.
If we feel unfairly treated, we get upset and usually do something about it.
The first two alternatives may give you as a business, a chance to mend things up and retain the client using recovery techniques which I will discuss in another article. But the last two, retaliation or withdrawal, can be devastating to a business.
The restaurant in Atlanta because of not being gracious with a client that simply wanted to be taken care of near closing time has lost that client forever and I will tell many of my friends that visit Atlanta.
The theory now gets more interesting: People who feel that they are receiving more than they deserve from an interaction also experience a psychological need to restore the balance of fairness.
A simple illustration of this is the psychological pressure you may experience to reciprocate when someone does something very nice to you. You will feel “in debt” until you have the opportunity to reciprocate with a similar kindness or even a more positive action.
I will never forget when I promised a friend I would send him a video of a hurricane devastating a city and after I did so, he sent me a video training seminar he had taped worth 10 times the video I sent him.
So, my dear readers, if you own a business or you work for a company and you have clients, by going beyond what people anticipate, you create an imbalance that for many people will require some type of action to make it even.
Yes, they could rationalize it or ignore it, but most will attempt to restore the balance by buying again from you, telling others, be willing to pay a premium for the services rendered or even becoming a loyal client. Remember, a loyal client is your most valuable client.
Become a service leader in your industry, go for the 100 plus concept and you will have many loyal clients and you will make a lot more money.
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