|
The Quest for Great Customers
Most CEOs hope a stronger focus on customers will protect them
from eroding profit margins and commoditization. But getting closer
to customers is not a matter of installing better CRM systems or
simply measuring satisfaction levels.
Companies can take advantage of new, increasingly efficient ways
to understand and respond to customer needs and preferences. We
now have the ability to connect with buyers in more meaningful
ways -- connections that can benefit the bottom line by reducing
costs and increasing revenues.
Close examination reveals that relationships
between companies and consumers are suffering. U.S.
satisfaction rates are at an all-time low. Complaints, boycotts
and growing unhappiness with big corporations are strong indicators
that most CRM isn’t
working.
Ironically, the very steps marketers
are taking to build relationships with customers are often responsible
for destroying these connections. Companies
may delight in learning more about their customers and providing
services to please them, but customers are fed up. They’re
tired of irrelevant survey questions, overwhelming product choices,
features they’ll never use in phone plans and cars, and rebate-driven
buyer reward programs.
What’s Missing?
Perhaps we’re overlooking the fundamental elements of a
good customer relationship program. With
the means to connect with customers easily, maybe we’re rushing
to cash in on the potential rewards, while forgetting the essentials
of all relationships: intimacy and trust.
Customer relationship marketing is
powerful in theory, but troubled in practice. We
need to take time to figure out how and why we are undermining
our own best efforts. Let’s start by taking
a look at what’s wrong with most relationship marketing approaches.
What’s Wrong?
In their article “Preventing the Premature Death of Relationship
Marketing” (Harvard Business Review, Jan.–Feb. 1998),
Susan Fournier, Susan Dobscha, and David Glen Mick delineate four
mistakes companies make in relationship marketing.
| 1. |
The
number of one-on-one relationships that companies ask consumers
to maintain is untenable. People
maintain hundreds of one-on-one relationships in their personal
lives, so how can we really expect them to have one with your
company? It’s overkill.
As a result, many one-on-one marketing initiatives seem trivial
and useless instead of unique and valuable. |
| 2. |
There’s
a balance between giving and getting in a good relationship.
When companies ask their customers
for friendship, loyalty and respect, they often fail to reciprocate.
Consumers also perceive requests for personal information to
be intrusive. So are evening marketing calls and hundreds of
pieces of mail. Companies claim they’re interested in their customers,
but the focus is really on their business needs—not the
consumer. |
| 3. |
Companies’ claims
that customer relationships are valued don’t hold water.
People sometimes feel they’re at a disadvantage when
they’re loyal to a company. A company’s preoccupation
with its so-called best customers may neglect other revenue-generating
customers, who feel underappreciated. |
| 4. |
Companies
want people to think of them as allies and friends, but often
come across as enemies. While claiming to offer consumers solutions,
companies can actually create more problems. |
While companies try to be everything
to everyone, customers view this approach differently, contending
with a bewildering array of product offerings. According
to Fournier, Dobscha and Mick, more than 2,500 new products vie
for attention on supermarket shelves. Coke is available in more
than 50 product and packaging variations, Crest toothpaste in
55 and Snapple in more than 70 (even though only six flavors
dominate sales). Negative feedback from consumers is often viewed
as “temporary resistance to change,” with
companies failing to recognize there are optimal levels of choice.
Consumers consequently complain of loss of control, vulnerability,
stress and victimization, viewing companies as enemies instead
of allies. The larger the company, the more likely consumers perceive
it to be uncaring and principally interested in increasing shareholder
value.
Regaining Customer Trust
In 1985, psychologists Michael Argyle and Monica Henderson of
Oxford University defined several basic universal rules of friendship:
• Provide emotional support
• Respect privacy
• Preserve confidences
• Be tolerant of other friendships
When companies violate these basic
rules, they lose customers’ trust.
If companies truly want to build
relationships with consumers that lead to rewarding partnerships,
they must regain trust through actions—not empty and meaningless
words. We must listen to and respect our customers.
Why not take the false sincerity out
of customer relationship management and be honest about our commercial
intent? Consumers already know
companies want their money and loyalty. If companies truly want
consumers to partner with them, they must focus on customers’ needs
and wants—not the company’s.
The Quest for Customer Focus
When companies concentrate on customer relationships, they usually
devote most of their attention to the CRM system and the tools
and technology that monitor customer satisfaction. But developing
customer relationships is not a concern for the IT or marketing
department. The entire organization must be customer-oriented.
Indeed, companies that focus on their
customers have proved to be more successful. In “The Quest for Customer Focus” (Harvard
Business Review, April 2005), Ranjay Gulati and James B. Oldroyd
examined 17 diverse companies that concentrated on becoming more
customer-focused over a two-year period. Three concepts emerged:
| 1. |
Successful
customer-focused companies learn everything possible about
their customers. They create
a comprehensive picture of each customer’s needs—past,
present and future. |
| 2. |
They
know this picture is useless if employees can’t or won’t
share what they learn about customers. |
| 3. |
They
use these customer insights to guide product and service decisions.
Customer information is used as their basic strategy and organizational
structure. |
Over time, the most successful companies find new ways to manage
the flow of information about customers. They develop routines
for decision making that incorporate customer preferences. They
shift the locus of customer-focused efforts away from a centralized
hub to a more dispersed set of activities that span the entire
enterprise.
Customer-focused activities are no longer the concern of marketing,
IT and analytics groups. They have been shifted down to the line
organization, where employees are given the necessary autonomy
and latitude to focus on the customer in virtually every action.
Standardization Versus Localization
Customers are rebelling against cookie-cutter chain stores that
treat them exactly the same. One size no longer fits all. Another
way to connect with customers is to offer products and services
customized to local preferences.
For years, the big companies have pursued strategies of standardization.
Success for retailers and product manufacturers now hinges on their
ability to cater to local differences, while maintaining scale
efficiencies.
Titans like Wal-Mart, Best Buy and
McDonald’s have finely
tuned standardizations and rolled out their winning formulas internationally.
But this era is ending as consumer communities are growing more
diverse in ethnicity, wealth, lifestyle and values.
Smart retailers are starting to customize
their offerings to local markets. They
offer distinct products in different types of stores, with alternative
approaches to pricing, marketing, staffing, and customer service.
They’re
moving from standardization to localization.
And the companies that are doing this
are finding renewed success. But
they can’t offer local
preferences unless they know what their regional customers want
and need. The Internet is becoming a rich data repository of
consumer demands.
The New Frontier: Mining the Internet
With the proliferation of online stores
that complement traditional outlets, companies now have a tremendous
source of information about consumers’ preferences. Because
a traditional store may not always have a product on its shelves,
purchase results are not always a good measurement of desires.
Online stores can track consumer demand patterns more precisely,
as they offer extensive ranges of products to national and global
customers.
The web is more than a sales channel; it is a powerful means of
collecting data in real time. The Internet is truly the new frontier
in connecting with the customer, offering a huge opportunity for
companies to improve customer relationships.
Overpromise, Overdeliver
Capturing customers and keeping them
is all about creating brand promises and delivering them. This
means companies must do what they say—and more. In short, you must exceed customers’ expectations.
According to Rick Barrera, author of
Overpromise and Overdeliver: The Secrets of Unshakable Customer
Loyalty (Portfolio, 2005), companies have three points of contact
through which they can over deliver and win customers’ hearts:
| 1. |
Product
touch points: This occurs whenever
your customers interact with the products or services your
company sells—when
they handle, buy, use and dispose of your products. Buying
decisions are made at these pivotal times, and focusing on
customer experiences at these touch points will improve CRM. |
| 2. |
Human
touch points: This occurs when
customers directly interact with your staff—usually the
frontline people who can empathize, clear up misunderstandings
and tailor solutions to particular circumstances. Frontline
employees must have the necessary resources to help consumers,
as well as the decision-making power to act. |
| 3. |
System
touch points: These include all other points of contact between
a company and its customers, such as the systems and processes
used to facilitate transactions and interactions. Examples
include paper invoices, frequent buyer programs and the Internet.
With such technology, companies can make their biggest gains
in over delivering, reducing the variables that hinder consistently
excellent service. |
The New Social Marketing: Buzz and Word of Mouth
Where does marketing enter the mix?
Some experts claim the old days
of “push” marketing
are over, where a company shoved a one-way message to customers
via print or TV. Corporations are asking themselves just how
much return on investment there really is from a 30-second Super
Bowl commercial.
Consumers are turning away from media and, instead, tuning into
each other. Engagement and word of mouth marketing are the buzzwords
of this new era. Customers are doing their market research online
and listening to each other. Unfortunately, many marketers continue
to look at engagement in a one-sided way.
Corporate blogs have become an excellent resource for CEOs and
others to connect with customers in a personal manner. In spite
of the possible pitfalls in opening two-way communication between
the public and employees, there is much to be gained by being personable,
accessible, authentic and transparent.
Customers are already communicating
with each other online about products and experiences with your
company. If you can join the
conversation in a real way, in real time, you’ll have an
advantage over those who remain silent and inaccessible behind
corporate doors.
Working Resources is a Strategic Talent Management Consulting,
Leadership Consulting, Training and Executive Coaching Firm Helping
Companies Assess, Select, Coach and Retain Emotionally Intelligent
People; Performance-Based Interviewing and Selection; Succession
Planning; Competency Modeling; Multi-Rater 360-Degree Feedback;
Career Coaching; Change Management; Corporate Culture Surveys and
Executive/Leadership Coaching.
Working
Resources is a Leadership Consulting, Training and Executive Coaching
Firm Helping Companies Assess, Select, Coach and Retain Emotionally
Intelligent People; Emotional Intelligence-Based Interviewing and
Selection; Multi-Rater 360-Degree Feedback; Career Coaching; Change
Management; Corporate Culture Surveys and Executive Coaching.
Dr. Maynard Brusman
Consulting Psychologist and Executive Coach
Trusted Advisor to Senior Leadership Teams
Subscribe to Working Resources FREE E-mail Newsletter.
E-mail:mbrusman@workingresources.com . Type Subscribe Newsletter.
Voice: 415-546-1252 Web:www.workingresources.com
E-mail This Article to a Collegue...
Return
to Professional Effectiveness Articles Index
|
