Determining Actions To Satisfy Customers Using Mendelow’s Matrix

“The customer is always right”, is the most common slogan when people talk about customer satisfaction. Cited from Wikipedia, this slogan was popularised by successful retailers such as Harry Gordon Selfridge, John Wanamaker, and Marshall Field. They argued that customer complaints should be taken seriously so they would not feel cheated or deceived. But nowadays, this slogan seems irrelevant because customers tend to submit fictive complaints, have unrealistic expectations, and misuse products to get the warranty. These tendencies would incur significant amount of losses to the company, which are due to additional expenses incurred to solve the complaints, retraining sales workforce, and reviewing the company’s product warranty mechanisms that might have been implemented for years. Then, what proper actions should the company take? Solving all complaints received to avoid customer dissatisfaction,which will result in significantly higher expenses? Or solving only a few complaints to avoid extreme surge of expenses, although some customers will be left dissatisfied?

Aubrey L. Mendelow, Professor from Graduate School of Management, Kent State University, Ohio, made Power-Interest Grid Matrix (widely known as Mendelow’s Matrix) in 1991. Mendelow’s Matrix is a useful matrix for management in determining proper actions to manage stakeholders based on their power and interest to company.

Illustration 1. The Mendelow’s Matrix

Source: https://commons.wikimedia.org/wiki/File:Stakeholders_matrix.svg. Created by Zirguezi.

Cited from Stakeholder Mapping Tool created by Equality and Safety for Women (www.equalityandsafetyforwomen.org.au), power can be defined in many ways, such as expertise or ownership of something,or a strong network of connections that the company requires. In a narrower context, customer powers can be indicated by customers’ tendency in purchasing company’s products, negotiating product prices, and payment of receivables. Customer interests, on the other hand, can be indicated by customers’ involvement in company’s social media platform (giving suggestions, criticisms, or information), awareness of changes made by company, or request of public information. Company can use this matrix to classify customers to four grids according to their powers and interests, i.e. Low Power, Low Interest (Apathetic) grid, Low Power, High Interest (Defenders) grid, High Power, Low Interest (Latent) grid, and High Power, High Interest (Promoters) grid.

Low Power, Low Interest (Apathetic) Grid

Customers classified to this group have no expertise or ownership in crucial things to the company, no strong network of connections the company requires, seldom purchase ofcompany’s products or services, frequent purchase of products or services with low margin and in small quantity, frequent negotiate price with significant amount, rare settle balances due timely, and worst of all, these customers tend to be uncooperative in solving their own complaints. Company should give standard service to this group of customers.

Low Power, High Interest (Defenders) Grid

Customers classified to this group have similar characteristics with the Low Power, Low Interest group, but this group often gives suggestions, criticisms, or very useful information for the company. This group is also aware of every change made by the company, frequent to ask for public information such as interim financial statements (if that information is not yet available/not yet published), or to ask for the company’s branch office address. Company should give standard service and put more attention to engage actively with this group of customers. This action would prevent them from joining forces with other customer groups and perhaps increasing their power (shifting to group of customers with greater power).

High Power, Low Interest (Latent) Grid

Customers classified to this group have significant expertise or ownership in crucial things to the company and very strong network of connections the company requires.They are often characterised by, frequent purchase of the company’s products or services with high margin and in large quantity, infrequent negotiate price or still fair in negotiating price, settle balances due timely. Unfortunately, they are uncooperative in company’s effort to solve their complaints. Company should give excellent services and be more focus to this group of customers.

High Power, High Interest (Promoters) Grid

Customers classified to this group have similar characteristics with the High Power, Low Interest group, but this group often gives suggestions, constructive criticisms, or very useful information for the company, which would be taken into consideration when the company is going to implement a new strategy. So, the company would incur significant losses, not only financial loss but also non-financial loss (discredited corporate reputation), that would be inevitable if these customers are dissatisfied. Company must give exceptional services and put most focus to this group of customers.

In conclusion, a company must solve complaints from the fourth group (High Power, High Interest) completely and may state a public announcement to apologise to those customers. Complaints from the third group (High Power, Low Interest) should be solved first than complaints from the second and the first. By doing so, the company could focus onthe company-wide strategy implementation and allocate resources it has to solve customer complaints more effectively.

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REFERENCES:

1.Ikatan Akuntan Indonesia (IAI). 2015. Modul Chartered Accountant (CA): Manajemen Strategik dan Kepemimpinan. Ikatan Akuntan Indonesia (IAI).

2.Equality and Safety for Women. (2014, December 9). Stakeholder Mapping Tool. Retrieved from http://www.equalityandsafetyforwomen.org.au on September 2016.

3.Wheelen, T.L. and Hunger, J.D. 2012. Concepts in Strategic Management and Business Policy: Toward Global Sustainability 13^th Edition. Prentice Hall.