Comments

1. Customer relationships are a sustainable competitive advantage.
2. Innovation is a sustainable competitive advantage.
3. Customer relationships that feed innovation supercharge the competitive advantage

So in the context of the definition:

Relationships are based ongoing conversation with the customer, through which:

1. Memorable experiences are created that touch emotions...
2. The lines between customer and business become blurred such that each thinks of themselves, the other, and the "whole" of the relationship that is something magical (the experience)...
3. And the relationship and dialogue (more than simple conversation) lead to the exploration and co-creation of new possibilities, innovative concepts, risk-taking, all for the purpose of perpetuating the mutually enriching relationship....

...in short, the relationship fosters a dialogue that feeds the passion of employees to work with customers to do cool sh*t!

And by the way, note that there is nothing here that says that the relationship is always "smooth sailing"!

Posted by Manoj Pawar at November 7, 2007 12:37 AM

Manoj ... love your wording about "the lines between customer and business become blurred such that each thinks of themselves, the other, and the "whole" of the relationship ..."

Want to give us an example of your thought about how customer relationships that feed innovation "supercharge" competitive advantage? Cool idea ... is it through collaboration that is enhanced in the context of a relationship?

Posted by Steve Yastrow at November 7, 2007 12:43 AM

Steve,

A relationship is an ongoing conversation with a customer ...

...in which the customer continually evaluates the value of the whole product you offer to them, often comparing your whole product offering to your competitors’ offerings as well. You, as the supplier of the whole product need to continually be part of that conversation so that someone else doesn’t take over that conversation from you.

In other words, the provider has the vast majority of the responsibility to keep the relationship alive and the customer has very limited responsibility, and in some cases, no responsibilty whatsoever.

You, the provider, must always be providing more and more value to keep the relationship alive.

Posted by Glenn Gow at November 7, 2007 12:56 AM

I don't think i've spotted any reference to "trust" and "respect". Any relationship should have these to survive.

Also I still prefer the term Client.

Pop into a shop and buy some socks = customer

Enter into dialogue between myself and a firm providing services = client

Posted by mike at November 7, 2007 1:31 AM

Mike,

I don't think that trust or respect is a pre-requisite of a relationship. You could have a functional relationship with someone based on mistrust and dishonesty.

Afterall, many people have relationships with their banks or insurance companies whilst harbouring the certain knowledge they'll be overcharged or their claim will be turned down!!!

And before the screaming starts I'm not suggesting this is ideal, desirable or even an aspiration, but it does happen!

The trick, IMHO, is to recognise these non-constructive relationships and turn them around in whole or part.

Posted by Ross at November 7, 2007 6:58 AM

Very insightful. The relationship is what keeps customers apart of your company. Learn from them and better your product through their feedback.

Posted by Dan Schawbel at November 7, 2007 8:44 AM

To Glenn's point that the seller has all the responsibility to keep the relationship allive, and the customer often has no responsibility ...

Arent' there times, in great relationships, where each person values the relationship just as much, and each treats the other as "customer?"

My definition of a customer is "anyone whose actions affect your results." In a great "We" relationship, a "vendor" is so much more than a supplier - he/she becomes an equal partner.

To Mike's point ... I think "trust," "respect" and being a "client" are outcomes that happen as a relationship grows. Thoughts?

Great comments all around!

Posted by Steve Yastrow at November 7, 2007 8:52 AM

I'm throwing a question out for all of you:

Given that any relationship ultimately comes down to two people interacting - is it even possible for the big companies to consistently build and sustain positive relationships with their customers?

(Yes, I know many people "love" Southwest, Starbucks and others, but many also do not.)

Posted by Mary Schmidt at November 7, 2007 9:41 AM

Sorry to be the party pooper but I think this is verging on meaningless waffle. Firstly, I think that trying to sum up this subject in one sentence is almost impossible and is likely to end up with either a bland or hideously complex phrase. Secondly, it reminds me of those mission statements where people want to be the "best xyz" or whatever but where "best" is never really defined or is so loose as to be pointless.

I regard a "relationship" as being the way in which people and/or things (including organisations) are connected to each other. There are different kinds of relationships and in the context of a seller and buyer, it could be anything from a one-off to a lifetime loyalty. Surely a definition of "customer relationship" has to accept that there will be different kinds of relationship and not foist a one size fits all definition onto every transaction or every different relationship?

Posted by Mark JF at November 7, 2007 11:41 AM

Mary, big companies are no more than the sum of their parts. The relationship's probably as good as the last person with whom you interacted. There might even be an advantage there. A Starbucks may enjoy longer success in spite of an occasional rogue employee whereas Bob's Brew will die if Bob--a team of one--is routinely impolite and unresponsive to his customers. Parenthetically, I love Starbucks: no element of self-satisfaction present. I detest Southwest: smug, smug, smug, "you fly us 'cause we're great."

Posted by Ed Di Gangi at November 7, 2007 11:45 AM

Big companies can build and sustain relationships IF they support and encourage these relationships. When BigCo employee is empowered to "Be the Brand" they become BigCo for ClientCo's employee. It is in both employees interest to build that relationship.

Posted by Brian Kovach at November 7, 2007 11:49 AM

Steve - "Time" - perhaps the most precious resource. Seems like when we transition into the unknown we may wish we had more time rather than customer relations. :>]

1. And more & more the value of time as a customer seems key. In other words if services & products save/create more time for customers then that may indeed create lovemark status in the relationship.

2. Example: I just redid Allstate insurance on homes-cars-business & it went super fast online mainly & amazingly by adding a $5M umbrella & earthquake coverage it came in $100 less than before.

3. Time savings & Internet savings. Do people still use a bank of bricks & mortar anymore? The two of us with one of us as the time saving World Wide Web? :>]

Posted by John at November 7, 2007 12:50 PM

These things come into my head, as my children sleep:

Customers

Deliver
Add value
Be interested not interesting!
They're just PEOPLE!!!
Its down to you?
This should simply be a NATURAL thing?

Now I must wash out the bottles for school and the baby!

Have a great evening....

Patrick

Posted by Patrick Stapleton at November 7, 2007 4:28 PM

One final note?

Just seen an advert for Stella Artois the beer

It ended with the line

"Pass on something good"

That feels like a good sleep deprived customer relationship definition!!!

Patrick

Posted by Patrick Stapleton at November 7, 2007 4:30 PM

I tend to agree with Mark JF. The concept itself has much merit. Dr Deming said " Competent men , doing their best on their jobs, know all there is to know about their work except how to improve it. Knowledge neccessary for improvement comes from the outside" If the result of this relationship is information that helps me work smarter, more productivly, more efficiently then it has "value". While the words describe the concept, at some point the words have to translate into action....to execution. If I am using the definition to sell a concept to a client company it works. If I'm the person in the client company company that bought it who is responsible for integrating it into the day to day, it's words on a wall. Knowing what I need to do is one thing. Knowing how best to do it is another. Face to face is but one of many methods used to gather "customer"/user information and feedback,judging from the verbiage in most privacy statements which speak of using cookies and tracking "beacons" to electronically harvest information. Is the definition of a customer limited to the external "buyer" or does it include the internal producer as well? After all, this is the person who translates the feedback into the processes that produce it or provides the service that delivers it. Is it the "in short, the relationship fosters a dialogue that feeds the passion of employees to work with customers to do cool sh*t!" as Mr Pawar expertly captures the concept (what a great phrase) or is it the stock options or compensation package offerred that feeds the passion instead. Have societal changes over the past 25-30 years made customer loyalty a myth as some research suggests. Is it time for a paradigm shift to move from the customer is the "center of the universe" to recognizing that some customers are not profitable as many companies do now and make no effort to retain their business? It's like the courseware designer/trainer relationship. The courseware designer captures and conveys a a lofty and powerful message through words and visuals. The trainer however has to "sell" it the frontline folks who do the work and know exactly where the gaps and disconnects are that will keep it from working or producing results. Thanks for a great discussion!

Posted by Dave W at November 7, 2007 11:28 PM

Regarding my thoughts on "how customer relationships that feed innovation "supercharge" competitive advantage", here's the bottom line:

A. One-time innovation is no longer enough. Competitors, some of them global, are quickly able to copy. The ability to sustain innovation, however, is not easily reproducible.

B. Similarly, as others have mentioned, the ability to both create and grow relationships is a core competency that is not easily reproducible.

So, what happens when the growing relationship itself pulls the customer into product/service re-invention and innovation? This is something more than "focus groups" (focus groups are bullsh*t).

Supercharged competitive advantage.

Strong relationships get stronger, while at the same time allowing for more profound customer "inputs" into product/service experiences...the process itself is part of the experience. The power of the collaboration is directly proportional to both the quality of the conversation, and to the degree to which the lines are blurred between customer and company.

Concrete examples of companies that do this well:

-Google (think Google Labs)
-Apple (talk about passionate communities!)
-Sonic (how many of their menu items have been based on customer inventions?)
-Healthcare systems that include patients in process improvement activities around patient safety or customer service (ok, this is rare in healthcare, but I know of a few "players")

Posted by Manoj Pawar at November 8, 2007 12:55 AM

So far we have talked about fostering positive relationships (well apart from the bit about Banks anyway!)

I think it is also worth thinking about the relationships that we want to end too. Not all customers fit the business. Some customers cost more than they bring in (financially, morally or in terms of the mess they create with your staff)

Most businesses are actually cronically averse to deliberatly choosing their customers and sacking them. There is an terrible lack of rational decision making around this. Many decisions are made on a revenue basis not a profit basis. i.e. the salesguy pushes how much they bring in and that is all management see but the delivery side is not allowed to say "actually we lose money on this".

In a small company it's often the opposite - you know full well what the financial situation is on both sides - but you need the cashflow! so it is difficult to sack a customer.

I coach business people part time (i.e. not my day job so I don't totally rely on it for income). I am lucky in that I therefore get to choose my clients - turning down work is amazingly empowering! I only coach the coolest of the cool!

Posted by PaulH at November 8, 2007 3:24 AM

PaulH's comment on choosing which relationships to end: Yes! You can be great friends with everyone on the block, and you can't have great relationships with every customer. It's important to choose wisely, and invest effort in the relationships that will be most valuable.

Posted by Steve Yastrow at November 8, 2007 8:33 AM

Sorry to have missed the discussion on this so far Steve – I was trying to build new relationships with customers all day yesterday in running a new workshop :-)

And that got me thinking....How was I trying to build a relationship?

Answer: I was trying to sell me and what I do and I was being;

*Up front about what I am good at
*Honest about my limitations
*Trying to find areas of common interest
*Trying to decide if there was a spark between me and any of the folks

For me the last of those 4 points is the most important and yet the most intangible. That got me thinking about what love is … and for me it is intangible but we all know it when we have it … and we sure as hell know when we don’t have it.

Sorry if that is a bit of fluffy, liberal thinking for all you hard nosed business guys but I passionately believe this (wrongly described) ‘soft stuff’ is the main ingredient in ANY relationship.

Posted by Trevor Gay at November 8, 2007 9:05 AM

Can I propose 4 levels of relationship
1) Family = implicit, enduring, hell or high water tolerance
2) Friendship = conditional, transient, trustful
3) Businesslike = where you're happy to deal with the backup of contracts and legal support.
3) Exploitation = one-sided, no trust (Ross' insurance and bank examples)
If your business contacts (including mundane retail transactional types) can move up through these levels then you are making a better business as long as the relationship is creating value for both sides.

Posted by Matt Birchall at November 8, 2007 1:56 PM

Manoj;

When I read your comment from Nov. 7th, I couldn't help wondering what would result in our organizations if we substituted the word EMPLOYEE for the word CUSTOMERS in the second set of three points describing the relationship.

I've been struggling with some of my HR colleagues, especially those in Recruiting, asking them to consider adopting the perspective that all applicants as well as our employee base are in fact as important as customers to the success of the organization.

I've not been successful as many continue to spout the "recruiters dogma", that "we're so busy, we can't possibly respond to the queries that the applicants have of us."

Can you imagine a marketing VP accepting the "we're too busy....." response when learning of calls from customers that remain unanswered.

Funny, I'm not even asking them to respond in person, even electronically would be better than the no response black hole we've created.

In one of Tom's presentations from another decade, he received a response from an "in company" participant referring to a customer service or quality issue, suggesting that "the company was no worse than anyone else in the industry." He developed a funny logo depicting that comment. I can visualize an HR Department, with their mission statement, including the phrase "we're unresponsive and proud of it"

I suggest that the opportunity exists for an HR department to distinguish themselves by viewing applicants as customers and being more responsive to their queries and perhaps even designing programmes in concert with their suggestions and changing requirements.

I feel better for sharing this. now back to the customer discussion.

Posted by Doug Shimada at November 8, 2007 3:49 PM

Doug-

You're speak the truth.

Of course, those that most need to hear this are not reading this blog.

If it's helps, employees (talent) can only be sustained if the same premises are true...of this, I'm certain.

buy viagra in sydney

Revolution is not even necessary here. Companies that don't share your perspective are in peril (and exponentially so).

Manoj

Posted by Manoj Pawar at November 8, 2007 8:30 PM

Folks again, a very interesting discussion. I am reminded from a lyric from a Tower of Power song "The more things change, the more they stay the same". The customer "relationship" itself can yield only information,,,,feedback. Loyalty? Who knows? That information becomes "value added" only when it's translated into improvements...in the product, in the service or in the delivery of the product or service. If anyrhing will induce "loyalty" it's great products and world class service. The relatiobship doen't insure that happens...that gets you only the information. The value comes from providing the frontline folks the resources...staffing, time, tools, materials, training...that enables(I hate the word empower) them to produce and deliver the best. So amother essential customer "relationship" has to be leader/frontline team. Does the frontline person not have feedback that can translate into product/service improvements? I would agree sustained innovation and relationships as core competencies are not easily reproducible unless they are part of a performance management system...one that systematically and consistently collects information from customers/suppliers, competitors, and the frontline folks uses that information to drive decision making on how to improve the processes that produce it or deliver it. Systems based...W.Edwards Deming what?, 1950.s? Baldrige Quality Award Criteria for Performance Excellence (1987) and it's 7 categories on of which is customer relationship management and details how to translate the feedback collected into into process, performance, productivity, and profit improvement. (http://baldrige.nist.gov). Perhaps an equally important discussion might what be on what are the barriers and challenges to taking the words and concepts that have been out there for years (regardless of how they are "packaged") and translating any organization into a "world class" company? Again...thanks for the discussion.

Posted by Dave W. at November 8, 2007 11:34 PM

i think you are so right there! however to deepen the concept of relationship....one need to consider the nature's best...particularly with the fact that what we call technological advancement is a discovery and copy of NATURE's Best...birds for airplane, rolling wood for cars, whales for submarines, a pregnant womb for a home....

i personally think customer relationship starts with the individual recognising the place of his soul and his body and treating these customers fairly within the confines of the science of purpose, trust and love.

life is an idea, and all of lives activities can be reduced to what they really are...ideas. trade becomes the connecting system for promotion and demotion.....

so relationship really is the negotiation, sales, trade between two or more personalities...if you get what that it.

thanks

jerrie

Posted by Owusi Jerrie at November 10, 2007 7:02 AM

Customer relationships is an errant term perhaps.

How about a team relationship (draft term) or a term that implies a duality? Symbiotic is perhaps a big naff. Hmmmm Anyway....

A team relationship is one where the two or more people involved serve and shape each other via a common interest in a product or service.

This is my concept. You need to get the idea you have this simple or simpler to make it work easily.

Posted by Susan Plunkett at November 17, 2007 4:38 AM

Didn't think you had the courage to keep my post...the predatory companies of today are using the pages of Tom Peters books to clean their windshields. Money and power are ALL they think of.

Posted by robert at November 22, 2007 12:56 PM

Back to the basics.

Customer Service is the ratio of expected return to Cost of Service. Everyone tries to maximize this ratio.

Try this when you have time.

1. Buy a tall coffee in Starbucks on a Tuesday afternoon 2:00 PM. See what kind of service you get.

2. Compare that with when you buy the same coffee on a Sunday morning 10:00 AM.

Truth is the Cost of Service is very high on Sunday when compared to Tuesday. So Profit maximization is always at the back of Cashier's mind.

We use the word Service to sugar coat the soar pills. It gets bigger and noticable as the tab increases.

Posted by Gopal Kandasamy at November 25, 2007 8:31 PM