Comments

Costco, Nordstrom, Ritz-Carlton & Lowe's for example have provided me super value over the past few years - so I am totally loyal to them.

Primarily to me it is monetary - say the Ritz-Carlton comps you on occasion & the extra nights thrill everyone involved - that is always a bonus. :>]

I enjoy the relations but if they save me $1M over the years the relations are secondary.

Same for Bank of America - if they give free estate & trust advice to save $1M & maybe take it all off shore & become a dual citizen - sure relations are cool but expertise is priceless. Happy Halloween. :>]

Posted by John at October 30, 2007 6:52 PM

Good post Steve.In a time when everything that we buy, works .... where is the competitive advantage? As far as I can see it is ONLY the way I am TREATED as a customer – you know ... the ‘soft stuff’ – that stuff the rationalists say is less important. All us ‘softies’ KNOW that is where the value is intuitively - we don't crave 'proof.' It is intangible to some degree but we all know it when we see it. The desire and the abortive struggle to measure it will always be the achilles heel of rationality. This concept is not to do with the modern world - 'Twas ever thus Steve.

Posted by Trevor Gay at October 30, 2007 7:35 PM

To Trevor's point about "everything we buy, works" ... that's what got me started on this ... in customer research related to my consulting work, I began to notice that the only thing people got really excited about (positive or negative) was the quality of relationship. Most products and services are seen as interchangeable.

Posted by Steve Yastrow at October 30, 2007 8:52 PM

Steve - I guess the magic question is how you actually build those relationships with your customers (or potential customers).

I think the "I can't get it anywhere else" comes from the experience they have with you. And when you can attach meaning to that experience you have something truly magical. A great example of this is Harley Davidson - they allow corporate types to become "rebels" away from their workaday life. Can't get that with a Yamaha, although they make a bike that looks and sounds like a Harley.

You can only build personal relationships so far. Making relationships and experiences a part of your business model is what's needed.

Posted by Steve Cunningham at October 30, 2007 8:53 PM

To Steve's C's "magic question" ... I think you can do specific things to build relationships with customers. I'll blog on this later, but consider this: When you interact with a customer your relationship can improve, stay the same, or get worse. If you have enough interactions where the relationship improves, your relationship will grow. If not, your relationship will stagnate or weaken.

Creating interactions in which relationships improve, which I call "encounters," is a skill that can be learned. As noted, I'll post on this more. In the meantime, anyone want to suggest how?

Posted by Steve Yastrow at October 30, 2007 9:20 PM

When my wife and I wanted to re-do the kitchen we visited places that would have gladly done the job. We found many. Eventually, we settled on one...that was the most expensive. We knew we could get it cheaper. The difference was that we "trusted" the guy we spoke to and were confident that he could customize what he said he could customize. Others probably could have done the job...but...we weren't sure. People count!

Posted by Joel Heffner at October 30, 2007 9:39 PM

When "everything we buy, works" - but not all the time (as in specialty software) - then the responsiveness of the vendor's people to customer complaints and the speed of bug fixes become more important than the original purchase price. An (almost) immediate human response to a customer's email, combined with a swift apology for any malfunction, quickly defuses the customer's anger, and starts the ball rolling for "word of mouth" advertising.

Posted by Mike L. at October 30, 2007 11:49 PM

I totally agree with you, service or relationship is the only thing that can not be copied, adapted or added without the personal touch of the management. I believe that personality of the management reflects on all aspects of a company starting from physical environment to the personal relations of the employees with the third parties including customers.

I have been stained in Montenegro for a while for a mall project, in order to help to the retailers and service companies I have started a blog (http://mallofmontenegro.blogspot.com) which may be interesting to go through. Since I left the post and country I do not moderate the blog anyway.

But service and relations is the main thing that can WOWW a company in this age.

Tufan Karaca

Posted by Tufan Karaca at October 31, 2007 2:21 AM

To answer Steve Yastrow's question on framing "encounters" and how to learn the skill, I think it starts with recognising and actively seeking your customer's humanity. That is, seeing your customers not only as customers, or prospects, but as individuals.

And so we listen closely for cues to their lives as men and women, and then we respond appropriately. I am reminded of an online shoe company that sent flowers to one of their customer's on learning of her mother's death. I also heard a story about a pizza company that delivered free pizza to a family whose house had just been in a fire.

To speak to my own experience, a hotel I visited in Nottingham left a CD of my favourite genre of music in my room. Along with a handwritten note welcoming me.

Posted by Fredd Kambo at October 31, 2007 3:48 AM

"Most products and services are seen as interchangeable..." I disagree somewhat: like the iPod, BMW, Tesco, UPS or (to mention a few companies referenced here recently) Body Shop, North Mississippi Medical Centre, AICC, Bay Area Gardeners Foundation, Singapore Air.... Maybe most people just don't look closely?

"I could study your service standards, and copy them too." I disagree strongly! Service standards are a direct result of people and execution. You don't just perform at 99.99% by simple desire or brute decree. It's a reflection of how well people are trained and motivated, given the right tools to do the job and given the right environment in which to deliver excellence.

I think the bigger question is this: if you accept that customer relationships are the most powerful competitive advantage you have, how do you recruit, train, motivate and maintain a workforce that will deliver this, every time, naturally, unfailingly. And that is surely about people and execution.

Posted by Mark JF at October 31, 2007 4:15 AM

Steve, it is a well known feature in healthcare that doctors who can talk and listen to patients don’t get sued as much as those who cannot relate to patients at the emotional level. This is not about ‘technical competence’ - it is about how the patient feels he/she is treated emotionally. I’ve worked alongside hundreds – possibly thousands - of doctors in my career and every one of them that I know well is motivated by caring for their patient rather than by their own ego which is sometimes promoted as the main motivation of docs. What does frustrate the hell out of me is why a minority of docs just do not want to believe in this ‘soft’ stuff. Your posting is as much about doctors and healthcare as it is about hotels or retail – the issues are identical – I stole one of Tom slides that I use quite a lot as follows:

Dr Baum's Abbreviated Policy Manual

Rule No. 1: The patient is always right.

Rule No. 2: If you think the patient is wrong, reread rule Number 1.

All other policies are null and void.

Dr Neil Baum is Clinical Associate Professor of Urology, Tulane Medical School, Louisiana State University School of Medicine, New Orleans.

Amen and thank you Neil! (And thanks again Steve for raising a topic close to my heart)

Posted by Trevor Gay at October 31, 2007 4:23 AM

OK Steve, here comes a waffle...Sure it matters...sometimes. In the hospitality industry it is clearly about relationships when it is a location a business traveler may stay in regularly. I personally stay at a hotel in Michigan which wouldn't win any design awards for their physical property. But the staff is amazing. I do have a twenty year customer relationship with them, so maybe they pay a bit more attention. But for the occasional traveler, cost is where it is at. And, much to my chagrin, at a corporate level I am seeing so much attention to operational excellence that cost is trumping many other factors. And you can't spend a whole lot of time building a relationship when you have leaned up the customer facing staff to the point of maximum "efficiency". I think the pendulum is taking a not so healthy swing back towards commodity hell these days...

Posted by Mike Neiss at October 31, 2007 7:55 AM

Customer relations - I agree with the thread that cost is a prime issue.

Costco's business model is driven on costs & they have fine customer relations. However, they do make mistakes - but the majority of the time the mistake favors the customer - so that makes me loyal.

Same for Wal$Mart - the understanding is low costs & adequate customer relations - they readily take returns & the stores are laid out so it is easy to find items - to minimize customer relation costs - savings to consumer. Like their $4 pharmacy refills - seniors could care less if their name is remembered - they thrive on $4 per refill & $1 Costco hot dogs. :>]

Posted by John at October 31, 2007 8:27 AM

PEOPLE PEOPLE PEOPLE

Make the most difference always.

Bids on price are fine PEOPLE will buy on price alone, but as the market gets tighter and the margins squeezed there is only one differentiator.

THE QUALITY OF THE PEOPLE YOU EMPLOY

But beware quality begats quality so you'd better be a quality organisation and have an integrated set of people, process, technology, reward, recognition, training and all my other needs approach otherwise its then an issue of

RETENTION

How do you retain the QUALITY you have employed or created by being

CREATIVE, DIFFERENT but above all SUPPORTIVE

So

PEOPLE PEOPLE PEOPLE....

Even IT are PEOPLE!

PEOPLE create relationships, friendships and deliver on promises otherwise there is no differentiator and you may as well go back to PRICE!

Posted by Patrick Stapleton at October 31, 2007 10:26 AM

It's about customer loyalty. No matter what the competition does, your loyal customers will still purchase from you.

Posted by Dan Schawbel at October 31, 2007 10:52 AM

A great post and ensuing thread. Thought provoking to say the least. Having thought it through, yes, a relationship with the customer is the differentiator if price is not. Is the relationship safe, bullet proof and unable to be copied? I think not. How do you do it? Watch what the othe guy does and do the same thing: exactly. If you do so, will you be equal in performance? Yes. Will you immediately be equals in the eye of the customer? No, the other guy had a head start. That's where innovation comes in. You can work on becoming what an Apple is today and achieve that goal but, in the time it takes to do so, what will Apple have become. Whether you're today's leader or today's laggard, stand still and eventually you'll die.

Posted by Ed Di Gangi at October 31, 2007 1:47 PM

Steve, let’s that your hypothesis is correct, that customer relationships have become one if the most powerful competitive advantages available to a business. This begs some corollary questions:

Do you know who those customers are?
What do you know about them?
What do you do with that information?
How do you treat them differently from a customer with whom you have yet to establish a relationship?
How do you maintain a relationship when the people with whom the customer interacts may not have ever interacted with that customer before?
How do you know the customer thinks they have a relationship with you?

Addressing these questions is more than having a great attitude, it’s about investing in the systems and processes to manage the information about your customers and enabling your employees to easily act on that information.

Leveraging customer relationships requires senior management commitment in time and money to make it happen right. When it happens right, it can become the competitive advantage of which you speak.

Posted by Glenn Gow at October 31, 2007 8:29 PM

The TWO quotes below epitomize what customer relationship is all about…

“If you have a good relationship with your customer, the business process flows that much more smoothly” – Richard Pratt

“If you work just for money, you'll never make it, but if you love what you're doing and you always put the customer first, success will be yours” – Ray Kroc

Posted by K.Sriram at October 31, 2007 9:16 PM

Fredd's point about seeing the other's humanity is right on ... it is a key to relationship-building encounters ...

To Mike's point ... if the pendulum is swinging back to "commodity hell," doesn't that give the relationship-oriented competitor and advantage?

Glenn raises great questions ... (my upcoming book on this subject addresses many of them ... more on that later)

Thanks for all the great comments ... they are all insightful.

Posted by Steve Yastrow at October 31, 2007 11:13 PM

Patrick Stapleton, in his post above, gets it. It's the "internal" customer. The PEOPLE...Spend a day or two in a wireless Call Center talking to customers and you will hear first hand why a new paradigm needs to emerge that shifts the "customer focus" from the external one to the internal one. The one on the frontline who provides the service, who corrects the mistakes,and manages the relationship with the external customer. That is the customer who is most responsible for your performance, productivity, and results. The "external" customer focus of the past decades has created a culture of people who believe the label "customer" entitles them to "free" anything and everything....at least in our industry. Customer loyalty? A whole bunch of wireless companies who lost thousands of customers to AT&T and the iPhone can tell you that ego and cool with today's consumer beats integrity and brand loyalty everytime. The reality from the frontline is customers aren't always right and certainly not always profitable. I have never heard anyone say a positive word about Sprint yet they have almost 54 million subscribers. They "fire" about 1000-1200...yay Sprint!!!...who call customer service 40-50 times per month. Now figure a cost per call of about 10-11 dollars per call and you can easily understand the business decision. The word "no" in this business virtually gurantees a call back to rep shop for someone they can and will eventually intimidate into giving them what they want. Which creates massive turnover, and more service issues and so on, and so on. Want to do some real and relevant research? Plug in with your company's customer service team and listen for a while. Better yet, take a few calls yourself. Either way, it has a way of changing your perspective on the importantance of that underpaid, underappreciated, under-valued person who takes care of the ones who put a little bit of cash in one pocket while tyring to pull a larger chunk of change from the other. Senior Mnagement needs to leverage that relationship, commit to making an investment in time and money right there. I read a book one time years ago with a chapter about "Productivity Through People"....made a whole lot of sense then as it does now. I think Herb Kelleher had a bit of success with it as well.....

Posted by Dave W at November 1, 2007 1:50 AM

Dave w: thanks

I'd also add having managed "The face of IT" yes the "Service Desk" or the "Help Desk" I would concurr that it is this relationship with the customer is key. Having supported a 'Call Centre' I would also say my support of them was key in there support of our customers, having said that it was a Credit Card and that is all about price !!!

Having stated that, why then do organisations outsource the face of there organisations, outsource the verything that should be there differentiator. It must therfore be something that is of no consequence to them and they fail to see the difference quality PEOPLE bring to there customers and the bottom line.

There is a great ad over here in Europe/UK for carlsberg it has a dusty old room with an old phone in it, it has on the door, the customer complaints hot line, the room is covered in cobwebs and is empty, that is the room and the team I want to build for my customers so should we all.

Finally 'loyalty' to what? not an organisation, not a thing but usually a Service and how that has been provided by the PEOPLE who provide it is key add COMMUNICATIONS and your getting it better still add some OWNERSHIP REWARD AND RECOGNITION for customer excellence and you will always always get close to and love your customers.

have a lovely day the weather in the Uk is unseasonably warm, my daughters didn't need there coats on the walk to school this morning...

Posted by Patrick Stapleton at November 1, 2007 7:13 AM

In upstate New York, there a bunch of coffee
shops called "The Muddy Cup" and they seem to do well
by being the anti-starbucks even though they
seem a lot like starbucks. They are usually in places that would find value in being anti-starbucks - old hudson river towns that are
gentrifying and dont want a corporate looking
starbucks (even though everyone really secretly likes starbucks) -

Posted by dinsdalePiranha at November 1, 2007 8:53 AM

Seems the difference here is the importance of "relationships" to the "affluent-luxury" class of product & services consumers vs. the "labor class."

I'm sure Steve is right on about the competitive advantage: relationships issue. "Labor" consumers naturally focus much more on costs since they have much less discretionary income. Lovemark relationships may be a luxury.

Given luck most of us here are in the former class and thrive on the sheer fun of having successful relationships as frosting on the cake for services & products and/or demand it given we can well afford to take business elsewhere at a higher cost to get the proper respect/professionalism & lovemarks that we may require! :>]

Case in point - recently had a landscaper default @ $130 cost to me - I decided to not pursue it because I did not want to deal with this flakey personality - rather I wanted to totally terminate the "relationship". A labor class consumer may not have that luxury. :>]

Posted by John at November 1, 2007 11:25 AM

Product, Place, Price, Promotion.

And People. The 5th P.

I fully agree that in this day and age, the difference between certain products and services have become so minimal that there needs to be another way to prove one's worth. And that's where customer relationships come in.

As egocentric as it may sound, I love when hotels call me by name the second or third time I visit a place. Or a restaurant. And it makes me want to go back and visit them again.

My favorite example is Singapore Airlines. For a similar plane ticket price (still outrageous regardless what you fly), there is so much more that you gain on SQ. I can't remember the last other airline I flew that, with a 75% full plane, the stewardess asked me if I wanted to move. Apparently she noticed that I was tall and would be more comfortable in an emergency exit row. Boy did I feel special, and it took all of one question.

Posted by Piotr Jakubowski at November 1, 2007 6:55 PM

Hi Steve,
It was indeed a great article. I remember this line from one of the Tom Peters' creation(not sure if thats book/video/tape), " In success,things that counts are not countable and most of the things which are countable , doesnt count". I strongly beleive that, even an ultra-rationalist cant be made truly happy just with a super-value discount. Lot of love is necessary in creating customer-delight.
Regards,
Manoj Nithyanantham
Bangalore,INDIA

Posted by Manoj Nithyanantham at November 2, 2007 3:03 AM

I can't agree (sorry!) with John's comment about relationships being important and affordable to the "luxury class" vs. the "labor class."

Relating to someone as a human instead of a number, engaging with them in conversation vs. talking at them, collaborating with them, creating an ongoing conversation over time ... all of these things are not luxury goods. They are not that much more expensive to provide in many cases, than impersonal, robotic, transactional delivery.

And, a customer's desire to be interacted with in this way, their ability to discern when it happens, and their power to walk away from sellers who don't engage in it, are all independent of financial means.

Relationships are not "frosting." They are fundamental.

Posted by Steve Yastrow at November 2, 2007 6:22 AM

Wow, great perspectives. In reference to the airline industry - yes, cost is a huge factor to the occasional traveler, but if that traveler has a problem, then the relationship becomes the key factor if he/she will: a. travel with that airline again; b. recommend that airline to others (including maybe their best friend a CEO who travels 150,000 miles a year); c. blogs about the experience which then spreads through the Web.

The big problem with airlines is that they generally treat everyone like an "occasional" traveler. I've been both a frequent and occasional traveler, and the service difference just isn't that great - a little more hoo-ha up front, some warm nuts, sorta okay food, and there ya go. You have to be a really, really big poobah before you get truly first class service (and then there are still crumbs in that nice leather seat.) Rack 'em, stack 'em, move 'em on out.

As for expertise versus relationships (?) - I was recently told (by a banker) of a client who had deposit of millions in a big bank (I believe it was Bank of America) and the Bank bounced a $35.00 check and then got snippy about it. (Mix-up in checkbooks at the office.) So, having money doesn't guarantee you get better service (or you can expect it) even from the big boy so-called experts. (I seem to recall a recent article talking about how financial advisors to wealthy people often give really, really bad advice. Duh-oh.)

As I used to say when doing sales training back in the day, "You can (almost) ignore your competitors...if you pay attention to your customers."

Posted by Mary Schmidt at November 2, 2007 9:29 AM

Relationship is it, but it's one thing to have memorable ones and another haunting. Building timely relationships gives any organization leverage but like the post on a certain store reads...
"56 Rules on how to deliver the goods:
Rule 1:Deliver the goods
Rule 2:The other 55 don't matter". When an organization becomes consistently inconsistent then there's bound to be a strain on the relationship. I had to change salons really often due to poor delivery, I decided to stick with one till the barber told me "he doesn't like people who complain". I moved elsewhere and all they want is their way, I think I'll be starting one myself where I can implement everything I'm missing. They all had the relationship but blew it through poor delivery.

Posted by Tobi Ajibawo at November 2, 2007 11:00 AM

When I was younger (and even naiver), I believed that certain things were "sold on relationship" and others were "pure commodities". (OK, I didn't quite express it like that.)

As I've got older (I'm only in my late 30s), the set of things put into the "pure commodities" basket BASED ON MY OWN SHOPPING PATTERNS has got smaller and smaller.

If my hunch is right, and that as we get older, and the tradeoff between getting the absolute lowest price vs. enjoying the experience (and the time saved in not shopping around), then it's a matter of simple demographics.

Is the population aging?

Are the elder members of our societies holding more spending power than they used to?

Hint: there's this management guru who has views - supported by real evidence on those last two - you're bound to have heard of him :-)

If so, should you be concentrating MORE on selling on relationships / experience or MORE on price?

Mark in Sunny England
(And to my countrymen/women, Happy Guy Fawkes this weekend.)

Posted by Mak Harrison at November 2, 2007 2:06 PM

Here is an example of taking the relationship to another level at Kaiser Permanente. I hope you agree this information is a good example.

Dear KP colleague,

So what are we celebrating this week?

Competent, consistent caregiving…when shifts change in our hospitals.

Most people do not know that one of the most “dangerous” times to be in any hospital can be at shift change. All hospitals take care of patients 24 hours a day. That means – if people work an eight hour day – that every hospital needs three separate shifts of people to provide 24 hours of patient care.

Continuity of care is essential for each patient. So it is important for the people on the current shift to inform the people on the incoming shift about the needed information for each patient.

That information exchange process takes time…an average of 44 minutes per nurse per shift. During that information exchange time, patients sometimes decide to go to the bathroom or cross the room on their own. Patients have described the time period during shift change as a “ghost town.” During that time, hospital caregivers are exchanging needed information, not spending as much time with patients.

There are a couple of obvious and significant potential problems with that entire shift change process in most hospitals. One problem is that it does take time away from face-to-face patient care. Another problem is that almost no hospitals completely structure or fully choreograph the data flow for the process, so the quality and accuracy of the specific information flow for any given patient often depends on the judgment, memory, and thoroughness of the two caregivers involved for each patient. Everyone wants to do that job perfectly. Every single caregiver wants to do exactly what patients need. But people can be tired after a long shift ---- and people can be eager, impatient and even slightly less focused at the beginning of a shift. So the information transmission process at changes of shift can sometimes have inaccuracies – omissions – errors – misunderstandings -- or temporary, incidental memory lapses.

Remember the old classroom game where you whispered something to one person who whispered it to the next person who whispered it to the next person, etc? Remember how garbled that information flow could get in just a few transmissions?

Verbal transmissions of patient information from shift to shift to shift to shift have some risk of these same kinds of distortions.

Why am I writing about that somewhat negative point of process misfunctionality in my weekly celebration letter?

I am writing about that topic because Kaiser Permanente almost uniquely has addressed those exact problems head on and we have done something about them. Remember, we are caregivers. We own and operate hospitals. We take care of patients. We definitely care about our patients. We think about ways to improve care. This was an opportunity to do exactly that. We knew what those shift change information exchange problems were because just about every hospital in America has them.

So what did we do?

We had frontline teams of nurses, administrative staff, physicians and other caregivers led by KP’s own Innovation Consultancy team spend time to figure out a better way of getting that essential information passed accurately, consistently and efficiently from caregiver-to–caregiver, shift-to-shift.

Our teams from all of our hospital regions did wonderful work. The teams designed a great information exchange process that involves getting the same exact and complete set of data communicated very consistently between caregivers at every shift change.

In what I believe was a stroke of pure genius, our caregiver teams also moved the location of the process. The data exchange moved from the sometimes distant nursing station at the end of the hall into the patient’s room – and made the patient part of the information exchange when the patients are awake and available to join in the process.

Templated whiteboards and computer systems were both designed to support the new process.

The total time needed for a nurse to see her or his first patient was reduced from 44 minutes to 12 minutes. The “ghost town” effect was eliminated. Accuracy was significantly improved. Patients felt more involved – and actually were involved where appropriate. (We don’t wake patients up to do the process.)

We prototyped the approach in several care units and then we piloted it in those hospitals with our frontline nursing staff. It has been a huge win. So we now have rolled it out to all of our shifts at almost all of our hospitals. The remaining couple of hospitals are scheduled for implementation in the near future.

Other non-Kaiser Permanente hospitals generally still rely heavily on a less thorough, less accurate, less patient-friendly, and less efficient process.

We are choosing a different path—a better path— a collective and collaborative path -- and everyone should benefit. So this week, we are celebrating the people and teams of caregivers that made all of that care improvement happen. Outside organizations have also recognized us for that innovation, so I am not the first to celebrate that success. Our Nurse Knowledge Exchange program has already been featured in the Wall Street Journal. Descriptions of the process will be included in several books including the Ten Faces of Innovation by Tom Kelly, Spreading Improvement Across Your Healthcare Organization by Kevin Nolan and Marie Schall, and Improving Hand-Off Communication by Joint Commission Resources. The Nurse Knowledge Exchange program is also listed in the Agency for Healthcare Research and Quality (AHRQ) Innovation Exchange Database.

As a side note, you may have noticed that I have not been naming individual people in my weekly celebrations of performance improvement. Let me explain why that is true. I have not been naming specific people because each of those efforts has so many heroes. I am concerned that if I list any names, I will omit someone who really deserves to be mentioned. This particular shift change effort had obvious pioneers, heroes, advocates, champions, supporters, and enablers at multiple levels. Rather than miss naming any involved or deserving person, I am using this letter to thank all of the teams and not naming each of the relevant names.

Please give me your feedback on that approach. Should I name more names even though I may not get them all listed or should I celebrate the specific achievement and generically thank the people who were the heroes who “achieved” without naming them individually?

What do you think?

In this particular case, re-engineering our hospital shift change process, we definitely do have many real heroes. You know who you are. You did a great thing. Thank you.

And be well. cheapest viagra australia

George

Posted by willilam Miller at November 2, 2007 5:02 PM

I completely agree, at least from the perspective of my business, the law business. There are thousands and thousands of excellent lawyers out there and once a client knows its lawyer is one of those, the reason it stays is because it likes and or is comfortable with that lawyer. This is actually a good reason since with comfort comes a better relationship and with the better relationship comes increased knowledge and better lawyering. In the end, it's the relationship, just as you say.

Posted by China Law Blog at November 3, 2007 6:15 PM

Steve has written a great article that is absolutely true. In the end the relationship you have with your customer will outlive any shorterm reasoning the customer has. The better relationship you create the customer the harder it will be for any competition to steal them away.

Posted by Tom titlow at November 5, 2007 2:01 AM

Relationship is indeed key in CRM, though perhaps Management is not that important, i.e businesses need to trust and be more aware of the sensibilities of their customers.

This comes through experience and targeting the right audience. Its of special significance for online businesses and e-tailers who have to interact with a very informed customer.

Posted by Neophyteblogger at November 5, 2007 5:36 AM

Steve,

Yes--but.

Relationships are indeed the ultimate competitive advantage--until and unless you start thinking of them and describing them as--competitive advantages!

Because the essence of a relationship is the sense that the other person cares about you. The minute you start describing that (partly) selfless relationship in terms of competitive advantage, it begins to turn selfish--worse yet, deviously selfish. The result--goodbye relationship and competitive advantage.

This is not an irresolvable problem. The trick is to see the advantage as a byproduct, not a goal. If you're in the relationship for the relationship, you get the ancillary benefits. If you're mainly in it for the ancillary benefits, you just might lose the relationship.

Every young male has to learn this lesson. It's good training for business.

Posted by Charles H. Green at November 5, 2007 5:27 PM

In my high tech business where the customer management places a high value on the relationship, their engineers only see the technology or other product related things because I have little interaction with them. Here the product does matter significantly, but the decision makers have to integrate their engineer's comments with their relationship thoughts invoked by me. And of course, I always get blamed by the engineers when they are behind schedule. When I say it's their problem - which it sometimes is - I destroy the engineering level relationship, but it's the truth!!! What do I do? I shut my mouth to maintain relationship over technology. QED. Relationships are more important. What I really need to do is take the engineers out for a beer. Thanks Steve for giving me that idea.

Posted by Phil at November 7, 2007 8:37 AM

Great post, Steve. Yet most business gurus miss it. I interviewed Michael Porter once and he talked through the competitive advantage of Southwest Airlines. Not once did he mention the people culture or the extraordinary relationship Southwest has with its employees and its customers. As Tom reminds us in his upper case post about MBAs aimed at women, 'soft is the new hard' (and it was 25 years ago when he and Bob W. first said so), yet the majority of organizations (and gurus like Prof. Porter) still don't get it. Phil Dourado www.TheLeadershipHub.com

Posted by Phil Dourado at November 19, 2007 8:03 AM viagra with overnight shipping

I believe the answer is yes. Customer relationships are a strong competitive advantage. I also agree with the post that the relationship has to be genuine, you have to really care for your customer. Following the steps in a manual does not cut it!

Posted by stephen hancock at November 29, 2007 12:20 AM

in the world of copy cats you can only copy the products not the relationship. it is the relationship that attaracts the customers.however this relationship should be built on strong values, without any selfish moto or agenda, it should be genunie. we canot pose. other person can easily see through.Building relation ship or Building Rapport is an art, it is innate, either it there or not in an induvidual.

Posted by n.muruli at December 8, 2007 10:37 PM