Customers for Life…Priceless!

The urgency of the economic moment is clear.  No one alone has all the answers.  The recession has exposed massive cracks in the way that organisations relate to the people they serve, and amplified customers’ sense of being taken for granted at a time when everyone is cynical, angry and full of anxiety.  We are now faced with one commercial ‘fact of life’:  the ability to build and maintain successful customer relationships during and after the recession will be the key to future commercial success.  This is where ‘unique value’ has always been created, value that can seldom be replicated by any competitor.  The companies which emerge from the recession will be the ones which have both the clarity and the confidence to focus on these 1 to 1 customer relationships that make their businesses unique. 

This book is meant to challenge and prepare you for an historic return to a long understood, but recently neglected, business reality:  customer relationships are the key and essential components of sustainable business success.  We live in an era where loyalty programmes have become a commodity, an era where trust and confidence in business leadership has collapsed, an era where there are no monopolies and customer choice is rampant,  an era where taking for granted even one single customer is a huge risk and where, owing to technology, customers are now in control forever to either punish or reward you accordingly. 

For years, customers have been growing increasingly cynical about the gap that exists between the promises that companies make to them and the realities of the service they receive.  Today, they feel even worse than that: they feel let-down, frightened and angry.  Far from just cynical, they actually believe that companies are lying to them. The recession has changed what they value, who they trust, and how and what they wish to purchase.  Let down, exhausted, felling out of control, they are seeking the stability of business relationships where companies feel loyal to them, where small kindnesses are practised, where recognition is commonplace, where simplicity and speed are the rule not the exception. 

The post-recession era which we are now entering brings with it enormous challenges and also enormous opportunities.  The expression ‘a crisis is a terrible thing to waste’ has never been more true.  All companies need to look to the fundamentals of the way that they interact with their customers, making the necessary strategic and structural changes to: Get Closer to customers to understand what they need right now (not what they needed 5 years ago, 2 years ago or even last year, as it is unlikely to be the same), Get Smarter therefore in what is being delivered everyday, and then Get Ready to urgently focus on 1 to 1 customer relationships in the post recession era to guarantee commercial success.

The crucial thing which all companies must understand is that almost everything in your business can be replicated.  Competing on price isn’t hard – anyone can do it, today, tomorrow, as you’re reading this sentence.  Competing on product is easy too – there are people in China and India waiting to take any innovation to pieces, and put it back together again, faster, better and cheaper. 

The things that can’t be replicated are the relationships you have with your customers.  The 1 to 1 interactions that you build up with them, over days and weeks and months and years, are truly unique and truly earned. They cannot ‘simply be Googled’. It is in these relationships  where unique value in your company is created.  They are the key to sustainable business success. Like all relationships, however, the relationships that you have with your customers are based on trust.  Think of the closest, most important relationship in your entire life – the relationship you have with your husband, wife, partner or lover.  Many of you will have experienced the collapse of trust in this relationship.  You will know that when that happens, the things that made that relationship special are hard to recover.  Faced with exactly this kind of collapse owing to the recession, customers in the years to come are likely to demand unprecedented levels of transparency, openness, accountability, and honesty. 

Customer relationships are also uniquely important because they are so fragile.  Again, like your personal relationship, they can take years to work on and develop.  And yet, overnight, one mistake, one small indication that, rather than valuing your customers, you have contempt for them, or take them for granted, can ruin everything.  Every encounter with a customer is a double-edge sword:  each time you risk annoying them, frustrating them, and just getting things wrong.  If you get it right, however, you are building something truly priceless – a customer for life. 

Several years ago, Customer Relationship Management (CRM) software was heralded as a new dawn for business, a way in which that most important commercial relationship could be counted and quantified.  Companies all over the world invested thousands, and sometimes even millions, in installing software to track and manage customers and their levels of satisfaction.  Looking back, it’s hard to assert that this made any difference to the way that customers felt about the companies they interacted with.  Indeed, it may even have been corrosive to these interactions.  The belief that loyalty, decisions and satisfaction could be quantified led to them being commoditised, whereas the truth is that relationships can’t be measured in numbers:  that’s what makes them scary and wonderful.  There’s no way to “de-risk” relationships – all you can do is make sure that your whole company, from the cleaner and the person on the till to the CEO, genuinely understands how important relationships are, and works at them all the time.  We live in a corporate world where we think that everything can be measured and quantified.  Yet a customer for life is such a valuable thing that it’s genuinely priceless. 

The Relationship Revolution will take several different forms, and new ways of doing business and thinking about customers will emerge from it.  One of the most important aspects of the revolution is that customers are able to band together to tell you what they think, and let you know how they feel.  Much has been written about how the new social networks which technology is creating will change the way that products are marketed.  Much less has been written about the implications that this has for marketing, and for business as a whole.  In a world where customers are connected, and can organize in huge numbers at very short notice, they have unprecedented power, and are able to build communities of tremendous strength.  We are yet fully to understand the implications of this.  It is likely, though, that these fleeting, ephemeral, and yet ferociously influential ‘customer unions’ may well have effects on business in this century comparable to the effects that trade unions had in the past century.  Word of mouth and reputation can make or break your business overnight.  They are now far, far more important than advertising.  The terrifying and exciting thing is that, unlike advertising, you can’t buy word of mouth.  You can’t pay astronomical fees to an agency to create a reputation for you.  You need to work at these in every interaction, every day. 

The customer universe of the twenty-first century is characterised by unprecedented levels of information, choice, power and control.   In business, you have to operate comfortably in this new environment, talking with your customers in real time, and understanding that the best ideas about change will come from them.  Power now resides with those who want to share information, rather than trying to hoard it.  If you are able to take this seriously, to let your customers make suggestions, and really listen to them, they are likely to add unquantifiable value to your business. 

Again and again, when people are asked who they most trust to recommend a product or service to them, they come up with the same answer:  ‘someone like me’.  Throughout the past century, we all expected that advances in technology would make our lives much simpler.  As we all know now, the opposite is true.  People work harder than ever before, leaving them little time to think hard about the companies they interact with, or even the choices they make as customers and consumers.  Your customers want their lives made less complex; they want the kind of simplicity and speed that will fit in with the way they live their lives.  They most trust ‘someone like me’ to provide this.  They want someone to say ‘I’m sorry’ and mean it when something goes wrong, when a company has demonstrably made their lives worse rather than better.  They want their problems resolved quickly – not at the speed-of-light but at the ‘speed-of-life’ – the speed that they need to keep going.  They want you to recognise them for who they are.  ‘Someone like me’ doesn’t mean an automated voice at the end of the call centre service line.  Nor does it mean a till operator who takes customers for granted, and won’t look them in the eye. 

To get customer relationships right it’s important to understand that these aren’t the only relationships that matter in business.  In fact, relationships are at the heart of everything that happens in a business.  Customers may be your most commercial, life-or-death relationship, but there are many others that feed into them.  These are:  relationships between colleagues; relationships between business partners; relationships with investors; relationships with competitors; relationships with the media; relationships with the government and public sector.  Each of these is governed by exactly the same principles, trust and confidence.  It’s erroneous to confuse customers with end-users, too.  Customers are the one-to-one relationships that are the very essence of your business. 

Corporate culture is governed by a kind of ‘emotional contagion’.  If everyone in a company is focused on ethics, values, and customers, it infuses right to the heart of what you do.  And yet the opposite is also true – if employees don’t have the kind of trust and confidence that underlies a meaningful relationship, if the media and your investors mistrust the line you try to spin, it’s very hard for customers to feel any different.  Ethics aren’t a ghetto, they are the foundation of everything.

To succeed in the post-recession era, you will have to build a sense of common purpose right through your company. Everyone in the company needs to relate everything they do to this common purpose, from how they talk to colleagues to how they deal with suppliers.  This will affect everything that happens in an organization:  how you recruit, how you reward, who you retain.  If the people who run a company really understand how important relationships are, no one else can fail to get it.  This is as important to a single-trader as it is to a multi-national corporation.  Size has never mattered less. 

People are naturally social.  Ever since we came out of caves, community, and living with others has been at the heart of our humanity.  We really want to connect, and to help each other, and business is one of the most fundamental ways that we do this.  Relationships are about empathy, about genuinely caring about the people around you. It’s often just a question of focus.  But if people don’t get this, it’s fatal.  You can’t teach people to care about this, however.  All you can do is unlock it, and help them to find the processes and habits in commercial life that make this possible. 

In the chapters to come, we’ll look at all these things – what went wrong in the way that businesses have related to customers, and what ‘unique value’ really looks like.  I want to help you to build up a picture of what this revolution looks like, what it means for you, and  how you can lead the charge in your own company.  I want this book to give you immense clarity with regard to the issues you face, to give you a vision of what a better future would look like, and finally, to inspire you with the courage you need to achieve this; to live the relationship revolution every day in your commercial life. 

I’ve spent years thinking about and trying to understand the theory and practise of customer service, and trying to communicate to others just how much it matters.   I’ve travelled to more than sixty different countries, giving nearly 500 hundreds speeches on this and other subjects, learning about how this fact of life transcends cultures and industries, to lie at the very heart of business.  Prior to that, I was a Director at British Airways, and the loyalty management company Air Miles, working in both New York and London.  At British Airways, I was part of the shift from state-owned airline to a company that, during the time I worked there, was a paragon of customer service excellence and a huge commercial success.   Whilst there, I helped to create and then managed what is judged by many as the most successful corporate training programme ever conducted in Europe, a programme called Winning For Customers.  Over 55, 000 BA staff attended these day-long seminars over a three year period in the 1990’s.  As a result pilots, cabin crew, cooks, IT experts, HR administrators et all came to understand that customers lay at the very heart of their success and profitability, customer loyalty was the job of every single person, and that to lay claim to our status as ‘the world’s favourite airline’ everyone had to take responsibility to live these values every day.  At Air Miles, I became Director of Customer Service and then, separately, Director of People and Culture.  I was the first person in Europe ever to hold that later title, in recognition of the fact that getting things right for customers, and for staff, are two sides of the same coin. 

I believe that relationships are life or death. I’ve seen for myself the kind of rewards that come from properly understanding this and getting it right.  This has always mattered, but today it matters more than ever.  The urgency of the economic moment is clear, and there is such beauty in the simplicity of it.   The importance of the issue is irrefutable.  The thing we have to do is act.

To paraphrase Bill Clinton, ‘it’s the customer, stupid’.  And as the Madison Avenue advertising legend David Ogilvy once said, ‘the customer isn’t stupid, she’s your wife!  Don’t lie to your wife - ever’.
Achieving this closeness to your customer is the greatest investment you can ever make.  It is where your unique value as a company is created and maintained.  It is at the heart of your commercial success – or failure.  Be part of the revolution.  The time is now.  

Edelman Trust Barometer, 2006