"Leadership Mantra #1: It all depends." Tom Peters
Steve Yastrow is the founder of Yastrow & Company, a Chicago-based consulting firm, where he has assembled a stellar team of associates who work with him to create consulting engagements that deliver powerful results. He has acquired a singular reputation among business decision makers as an outside partner who challenges organizations to take a fresh look at themselves from the inside out. He offers clear action steps to improve business performance through Brand Harmony and ideal customer relationships. As a consultant, speaker, and writer he encourages his clients, audiences, and readers to reinvent how they connect with customers. Yastrow & Company works with a variety of companies, from the Fortune 500 level to smaller owner-managed businesses. Clients include McDonald's Corporation, Kimpton Hotels, Cold Stone Creamery, Wyndham Hotels & Resorts, among others. Steve's books are Brand Harmony: Achieving Dynamic Results by Orchestrating Your Customer's Total Experience , and, the one we're discussing in this interview, We: The Ideal Customer Relationship.
We started something new with this interview! Erik has long wanted to post audio along with the texts, and Steve agreed to pioneer the format. So, if you'd like to listen to the interview rather than read it, use these links:
tompeters.com asks ...
Steve, what's a "we" relationship?
SY: A "we" relationship is when your customer stops thinking of you as "them, those people, that company," and starts to think of both of you, together, as "we." Once the customer invites you into the first person—thinks of you as "we" as opposed to some separate company, or "them"—all things are possible.
Why does that matter?
SY: Well, if you think about it, a customer spends very little time thinking about your products, your services. They spend all day thinking about themselves. They understand themselves. And once they start to think about you and themselves within the same thought, all of a sudden they're thinking about you in a completely different way.
When a customer only thinks of your products or your services, it's very easy to compare you to the competition and think about price, think about features. Once the customer sees you as "we," you are not comparable to the competition. In fact, the "we" relationship is one of the best competitive advantages you can have.
Which you contrast with "us and them." And "us and them" is what, a sort of normal, strictly transactional relationship?
SY: Strictly transactional relationship. When you go into a convenience store, you plop two bucks and a bottle of water on the counter, and the clerk gives you your change. You could bump into that clerk on the street an hour later and you two wouldn't recognize each other.
On the other hand, when you have interactions with people in business that actually move your relationship forward, all of a sudden you aren't just doing things for each other, you're doing things with each other. You start to get this feeling of "we," and you build your relationship to the point where this person is somebody you're doing business with that isn't substitutable with another option.
You talk about going from experience—you reference Pine and Gilmore and their book about the experience economy—to engagement. What do you mean by that?
SY: Well, it's an interesting point. You know, Pine and Gilmore say that experiences are as different from services as services are from goods. What I'm suggesting is there's another level here. Engagement is totally different than experience.
Think of it this way. It's a great experience watching Star Wars. It could be playing in two theaters, one with 400 people in it, and one that's empty. The movie plays exactly the same! It's an experience that is not dependent on the other people that you are with. So, therefore, when you don't just put on a show for your customers, but you actually engage with them, and do things with them, the experience for the customer isn't just a plain experience; it's an engagement they feel part of. And they leave that engagement with a completely different feeling about you than if you just put on a show for them.
It seems somewhat parallel to Pine and Gilmore's new book, which is called Authenticity. Have you seen that yet?
SY: I have seen it. I have not read it entirely, but I have seen it, and understand the concept.
At some level you're talking about engaging in an authentic relationship with someone. You have an example early in your book where you talk about a theoretical person. He deals with relatives over the weekend. He goes to a family barbecue. There are all kinds of folks that he deals with. And then he comes back to the office on Monday morning, he's a marketing guy, and all of a sudden his whole mindset about people—because now people are no longer family, but customers—and just the way he thinks about them changes. And you posit that that's wrong.
SY: Yeah, he starts targeting them. He starts trying to capture their eyeballs. If you think about it, the way we usually talk about marketing is a pretty inauthentic form of communication that we never really see in our daily lives. When can you have someone become your friend by shouting at them and interrupting them the way we do in advertising?
On the other hand, if we think about what really works in real life—how do you really create relationships with people—we can learn a lot about how to create relationships with customers. I'm not suggesting that we have to be best friends with our customers. That's not the point. What I'm suggesting is if we look at the authentic, real relationships that happen in daily life, let's learn from those instead of trying to learn from some unnatural form of communication like advertising.
Advertising is something you do when you have to because you don't have the ability to really meet people one-on-one and form relationships. But the best form of connecting with customers, the best way to get customers to really be loyal to you because they see you as something completely different than the competition, is to engage with them and create "we" relationships, where they don't just think of you; they think of both of you together.
You have a number of examples, at least early in the book—and I have to admit I haven't gotten all the way through it yet—where you talk about yourself meeting with clients. You're a marketer, you've got a small company. You talk about one-on-one engagements, mostly with people, and then using "we." But how does this apply to a larger company?
SY: It's a great question. And large companies can form relationships with customers. It's one example where bigger isn't better—it is easier for a small company to form relationships with customers—but big companies can do it. The way to think about this is to recognize that relationships, whether it's with a small company, or a big company, or, for that matter, with one of your friends, relationships are built one encounter at a time.
We all know what it feels like when we deal with somebody, and at the end of that interaction our relationships has improved. We also know what it feels like when we interact with somebody, and our relationship gets worse. If, throughout your relationship with a company, you have encounters with that company where your relationship gets better, no matter how big it is, you'll feel like you're in a relationship with that company.
Let me give you an example. There are a number of rental car companies out there that all rent the same Ford Taurus. Why, when I get off an airplane tonight, am I going to Hertz? Over time, Hertz has developed a relationship with me. Yes, there are many transactional interactions with them when I call on the phone, etc. But what I have found is that when I need them, they're on my side.
I took an earlier flight in somewhere a couple of months ago, and I got off the plane and realized that my rental car reservation hadn't been changed. Getting off the plane, I called Hertz's national number and said, "I'm four hours early. I took a different flight. I'll be at the rental car facility in about 15 minutes." When I got there, not only was my car ready, but I got to the car and the contract wasn't there. I looked, a guy was running up as I got there, running up with my contract to find me.
Those little encounters make me realize they're on my side. I'm not just a number; they're trying to take care of me. So it's harder for big companies, but it can work.
It makes me think of Kimpton Hotels, your client. Being in a hotel—and I think about Tom Peters talking about the maids—the house service people clearly run into guests a lot more than other people. Do you envision a training program where they're given some help in how to deal with guests?
SY: Sure. And, in fact, this is what I talk about in the book. We did it with Kimpton Hotels and it's rolled out to their whole system now with 6,000 employees. Here's the point. We all grew up in an age where customer service was a good thing. And it's still a good thing, but it's not a differentiating thing.
Good customer service exists anywhere. Beyond customer service is recognizing that your employee's job isn't just to do things for customers; it's to create relationships with them. So what we did at Kimpton Hotels, we created a program called the Kimpton Moment. And the Kimpton Moment is based on relationship-building encounters, which are the subject of Chapter Two in We. And the idea is this. If you're a bellman, your job isn't just to carry somebody's bags to the room. If you're a front desk person, your job isn't just to check them in. If you're a housekeeper, your job isn't just to get out of the way when somebody walks down the hall and move your cart out of the way. In each of those cases, your job is actually to contribute to building relationships with this customer. Whether your interaction is five seconds, or five minutes, or longer, what we worked on with the employees at Kimpton was how to have a moment with that customer that builds your relationship.
And what you find is that employees get it, they love it, they understand it, and they know how to do it. Because what we're doing is we're training them about something that isn't foreign to them.
You're asking them to be human, which they already are!
SY: Exactly. Letting themselves be who they are. When they're off work, guess what? They're all really good at creating relationships with their friends. Let's help them bring those talents into the workplace.
You feel that—not that you're a Luddite by any stretch—but that certain technologies have helped marketers become removed from the people they're trying to sell to.
SY: Well, it doesn't have to, but it often happens. There's a very simple question within technologies. Are you using these technologies to get closer to your customer, or to get farther from your customer? And there are great examples of companies who use technology to get closer to their customers.
I can go online right now and make an appointment with the Apple Genius Bar, and an hour from now be at the Apple store getting service. That technology helps me make an appointment and not waste my time. On the other hand, if I call my bank, I've got to enter my 16-digit credit card number and then talk to a voice prompter for five minutes. That's using technology to put a barrier between me, the customer, and that company. So really, technology can be wonderful, but it can also be used as a tool to hide from your customer.
Yeah, or putting in your 16-digit number, and then when you talk to a person, they ask you for your number all over again.
SY: One hundred percent of the time, right.
I always say to them, "Why did I put the number in before, if I have to tell it to you again?" They never have an answer.
SY: Because they don't know, because nobody has ever told them, either. And that's one of the challenges. When you're interacting with a big company—it's expensive to run a company and it's very tempting to look at the costs of all your customer transactions. What I suggest is to look at the benefits of all your customer encounters.
I guess you would run into the problem: how do you measure that? Can anybody figure out how to measure the quality of that relationship?
SY: Well, it's a very good question. And what it comes from is a basic premise that says your single largest asset, for most companies, is your customer relationships. Sure, if you own an airline you have these 100 million dollar jets. But you know what? They don't make money unless you have customers that are loyal to you.
In most companies, when I work with them, I find that the asset that has the most potential to produce more riches for the company is to develop their customer relationships and get the most out of them. Anybody listening to this should ask themselves, "What percent of our customers are giving us all the business they could?" Usually most companies say, "Very few. Zero or a small percentage of our customers are giving us all the business they could."
If we can develop stronger relationships with customers where they don't think of us as "them," but they think of us and themselves together as "we," that's when you can start to really derive the benefits from each of your customer relationships. And guess what? Your customers get more out of it too. Being a "we" customer is a good thing too, because you get more attention from the company you're dealing with. The only people who don't win in a "we" relationship are your competitors.
Alright! I just saw an article in the New York Times the other day about Mickey Drexler of the Gap. I guess he's probably like Howard Schultz in the way that he spends most of his time in stores. Here's a guy who is a CEO, but he's still out in stores and talking to customers. Is that your strongest "we"-creating relationship?
SY: Well, it's certainly a really good step for lots of reasons. First of all, from the customer's point of view, interacting with an executive in the company is hugely unheard of, and can definitely be a relationship-building encounter.
From the company's point of view, what's really interesting is that if I make this statement that your customer relationships are one of the greatest assets your company has, and your ability to create value is dependent on how strong your customer relationships are, most executives will nod at me and go, "Yeah, that makes sense."
Now, follow those executives around for a few weeks. And you know what you're going to find out? They don't behave as if customer relationships are really one of the key drivers of value for their company. Sure, they may say, "We have a CRM (Customer Relationship Management Program)." But really what that means is there's a computer program that their IT department manages. Follow those executives around and see how often they are interacting with the real, live customers.
The fact of the matter is this: most companies give lip service to the importance of customer relationships. Look at what they do and look at what they measure. Most companies don't measure the value of their relationships, they measure the value of individual transactions. Or they measure aggregate numbers like, "How many customers bought from us in the state of Wisconsin?" But they don't look at the value of those individual relationships. They don't actually focus on building those individual relationships; they focus on marketing at groups of customers. That is a big hole in the way companies are missing a chance to drive real value through customer relationships.
There's a small, outdoor sporting goods store near me that I've been shopping at, I think, since 1986. No one in that store knows my name. And I'm in there regularly. One time I was talking to a guy and I was sort of ranting and raving about, "You're not connecting with your customers!" I was talking about myself, because I'm so frustrated. I want to be loyal to this place. They are half a mile from my house; they are close. And they seem to want to thwart me. There is no attempt made to sort of really connect to me. They send out mass market mailers. God, it's frustrating.
SY: They treat you like a number. It's so interesting, you've been going there for what?
Twenty plus years!
SY: Think about it. One of the key characteristics of a good relationship, whether it's with your friends or your customers, is an ongoing conversation. If you don't talk to one of your friends for a month, you don't have to start over when you pick up the phone and call them or see them. You have continuity from the past conversations you've had. You pick up where you left off.
Imagine what happens with your customers if you have an ongoing conversation. But being the customer of most companies, like you in this store, is kind of like that movie that Drew Barrymore and Adam Sandler did, 50 First Dates. I don't know if you saw this movie. Well, they have this great time together. She's got a memory problem and every day their relationship has to start over. That reminded me of what it's like to do business with most companies, right? [Laughter] If there's no continuity—think about if that store had tried to have an ongoing conversation, an ongoing dialogue, with you over 22 years. You would have purchased more. Sure, you're still going there because their products are worth something to you. But think of how much more valuable—
Oh, absolutely. I will look around for the best price, because obviously a lot of these stores, they've got Patagonia or they've got Marmot, they've all got the same stuff. They just happen to be closer, and I like to go into a store once in awhile. But, absolutely, I could have bought a ton more stuff from them.
SY: Ongoing conversations are really an important part of a relationship and most companies aren't equipped to do it. Sure, they invest in CRM, Customer Relationship Management systems, but most companies look at the CRM system as a repository of information that, if they want to do a mass mailing, they can mail to the thousand people who bought this product with a mass mailing. Or, maybe, possibly have information that a store clerk won't think to go grab out of the computer when you're there. The reality is these computer systems that are designed to do customer relationship management should be looked at as memory systems to help you have continuity with your customers from one interaction to the next.
Do you encourage executives that you're working with to get out there and actually physically interact with people?
SY: Well, yes. And it's not only with customers, but with employees. I work with a lot of companies that have multi-unit operations: many hotels, many real estate holdings that have customers coming to them, many healthcare facilities, etc. And what you find in those cases is not only that executives need to get out and be seen by customers, but obviously their time needs to be leveraged. If they are creating relationships with the people throughout the organization, it cascades to the point where people on the front line realize, "Hey, my job isn't just to serve ice cream, or to check somebody into a hotel room, or to clean somebody's teeth if it's a dental office. My job is to contribute to building relationships with our customers."
Let me give you an example. My company is working with an organization now that has 70 dental offices, about 1,200 employees. [DentalWorks] And what all the employees are going through in their training now, is this. If we can create better relationships with patients, three magical things happen. The patients are going to get better healthcare, because they're going to come back, they're going to accept our recommendations, and they will be healthier. We will have a better place to work, because isn't it better to be working with people that you've got a relationship with than somebody who comes in off the street and you've never met before? And thirdly, the business will be more successful because we won't have to hunt as hard to find new patients. Our patients will come back. And it's amazing how when employees are exposed to that kind of a message, they get it.
Now, the CEO of this company [Doug Brown] is spending a lot of his personal time out communicating that message to employees. And it makes a big difference.
Excellent. Steve, thank you very much.
SY: Thank you, Erik.
Email: steve (at) – yastrow.com
Blog: Steve Yastrow