The Relationship Revolution E-Book

Larry Hochman

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 162

Veröffentlichungsjahr: 2010

Beschreibung

YOUR CUSTOMERS ARE ANGRY. VERY ANGRY!

The turmoil of recession has left them feeling let-down, anxious and betrayed. They know how often businesses over-promise and under-deliver, and they're now deeply cynical. Trust in business is at an all-time low.

This defining moment calls for nothing less than a 'Relationship Revolution'. The businesses that will prevail will be the ones who understand that customer relationships will be the dominant factor in determining success in the post-recession era. At a time when everyone is looking for value, this is where you can create the kind of 'unique value' that you need to succeed.

Simple yet profound, practical and full of examples, this book will become essential reading for business leaders in the coming years.

Leseprobe

Table of Contents

Title Page

Copyright Page

Dedication

Acknowledgements

Epigraph

Introduction

Chapter 1 - The Search for Unique Value

Chapter 2 - The Collapse of Trust and Confidence

Chapter 3 - Closing the Promise Gap

Chapter 4 - Customers in Control, Forever

Information

Choice

Power

Control

Chapter 5 - Get Closer, Get Smarter, Get Ready

Chapter 6 - Building a Common Purpose

Chapter 7 - Talent, as Precious as Oil

Chapter 8 - The Virtuoso Way: How One-to-One Relationships Revolutionised ...

Epilogue

Index

This edition first published by John Wiley & Sons Ltd in 2010 Copyright © 2010 Larry Hochman

Registered office

John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ , United Kingdom

For details of our global editorial offices, for customer services and for information about how to apply for permission to reuse the copyright material in this book please see our website at www.wiley.com

The right of the author to be identified as the author of this work has been asserted in accordance with the Copyright, Designs and Patents Act 1988.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by the UK Copyright, Designs and Patents Act 1988, without the prior permission of the publisher.

Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books.

Designations used by companies to distinguish their products are often claimed as trademarks. All brand names and product names used in this book are trade names, service marks, trademarks or registered trademarks of their respective owners. The publisher is not associated with any product or vendor mentioned in this book. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold on the understanding that the publisher is not engaged in rendering professional services. If professional advice or other expert assistance is required, the services of a competent professional should be sought.

eISBN : 978-0-470-66186-4

A catalogue record for this book is available from the British Library.

Set in 11pt Janson by Sparks - www.sparkspublishing.com

To Eric, who made my life complete

Acknowledgements

To the many people who have lent their support and encouragement through the years, a simple thank you. They include: Judy and Brian Robson, Alan Deller, Mike Pegg, Simon and Anita Wood, Andrea Burton, Colin Marshall, Elizabeth Gudonis, Dr Stan Maklan, Jacqueline Smith, John Wyman, Jane and Eric Bischoff, June Sebley, Mia and Francois Touzin, Scott and Robin Gustlin, the O’Halleran family, Brendan Barns, Santiago Zapata, Denise Bacci, Francesca Scarpa, Francesco Lorenzoni, Martin Gould, Larry Dumont, Sharon Bowler, CSA Consultants Worldwide, Amanda Mackenzie, Steve Hurst, Nick Duxbury, Cosimo Turroturro, Christina Wood, Mariam Mohamed, Sheldon and Trudy Wiseman, John O’Regan, Zar Nicholson, Sue Moore, Enrique Vessuri, Bill George, Georgie and Paul Johnson, my brilliant editor at John Wiley & Sons Ellen Hallsworth…and of course Eric.

‘In the eyes of the wise, the moment is better than the entire world’

Imad al-Hasain, sixteenth century Persian poet

Introduction

Customers for Life…Priceless!

The urgency of the economic moment is clear. No one person alone has all the answers. This recession has created a massive disruption 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. You, as a business leader, are now faced with one commercial fact of life: the ability to build and maintain successful customer relationships, during and after the recession, is the key to the survival of your business. This is where Unique Value has always been created, value that can seldom, if ever, be replicated by any competitor. The companies that emerge from the fear and confusion of recession will be the ones which have both the clarity and the confidence to focus on customer relationships to make their businesses unique; to create Value for Life. This should be your quest. Indeed, the quest of this book is to help you focus better on this reality, and to point out the grave danger if you fail to do so at this fragile time of recovery.

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, an era where customer choice is rampant, an era where taking for granted even one single customer is a huge risk. We live in an era where, owing to enabling technology, customers are now in control forever, at the touch of their computer keyboards able to punish you and potentially destroy what you have spent years building.

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 what is actually delivered. Far from just being cynical, today’s consumers actually believe that companies (and governments) are lying to them. Tough times have changed what they value, who they trust, how and what they wish to purchase, and hardened their determination to punish. Let down, exhausted, feeling 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. We are now entering the post-recession era. This brings with it enormous challenges and dangers. The biggest challenge, of course, is the continued survival of your business. The expression ‘a crisis is a terrible thing to waste’ has never been more true. All companies need to comprehensively review their level of obsession with customers, making necessary strategic and structural changes in order to do the following things.

You must get closer to customers to understand what people really need right now (not what they needed five years ago, two years ago or even last year). You must then get smarter about what is being delivered based on current knowledge, not guesses or history. Finally, you must ‘Get Ready’ to urgently focus the entire organisation on customer relationships in the post-recession era to guarantee continued survival.

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 only things that can’t be replicated are the relationships you have with your customers. The one-to-one interactions that you build up with them, over days, weeks, months and years, are truly unique and truly earned. They cannot simply be ‘Googled’. It is within these relationships that Unique Value in your company is created. These relationships are the key to sustainable business success. Like all relationships, however, the relationships that you have with your customers must be based on trust that is earned. Think of the closest, most important relationship in your own personal life - most likely this will be the relationship you have with your husband, wife, partner or lover. Those of you who have experienced the collapse of trust in a marriage will know this hard truth: the things that made that personal relationship uniquely valuable are hard to recover. Often the relationship will never recover. Faced with exactly this kind of collapse in many of their business relationships owing to the recession, if they no longer trust you, customers will dump you faster than you ever imagined possible. They are likely to demand unprecedented levels of transparency, openness, accountability, honesty and delivery in order to trust you in the future. The revolution is their revolution, and the ease with which they can walk away from you, never tell you why, instead tell 10,000 others in their online community about how you lost their trust - is today’s post-recession reality.

The abilityto build andmaintain customerrelationships is thekey to the survival ofyour business

Customer relationships are uniquely important and valuable because they are so very fragile. Again, like your personal relationships, they can take years to work on, develop and grow. And yet, overnight, by just one bad mistake, one small indication that rather than valuing your customers you have contempt for them, or take them for granted, or lied to them, or over-promised and under-delivered, a customer might walk away and never return.

You can’t buyword-of-mouthrecommendation orreputation

Several years ago, Customer Relationship Management (CRM) software was heralded as a new dawn for business, a way in which important commercial relationships could be strengthened and maintained by the collection of information, believing this was the road to perfecting the art of customer loyalty. Companies all over the world invested thousands, and sometimes even millions, installing software to track and manage customers. Looking back, it’s hard to assert that this made any difference at all to the way that customers felt about the companies they interacted with, or to levels of customer loyalty. Indeed, it may even have been corrosive to both. The belief that loyalty could be sustained by the collection of information led to customers being commoditised. The truth is that relationships are not that mechanical: that’s what makes them scary and wonderful. There’s no way to ‘de-risk’ relationships through software, which was the basic, if unspoken, promise of CRM. All you can do is make sure that everyone in your company genuinely understands how important relationships are, fully appreciates how they link to the bottom line, and works at strengthening them all the time no matter what their job is. Many have been led to believe that everything can be measured and quantified. A Customer for Life is such a valuable thing that he or she is genuinely priceless.

The Relationship Revolution is the name I give to the process of change that now engulfs us, and to which all businesses will have to adapt if they are to survive. This 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 the exponential power customers now have to communicate, participate and collaborate. These are powerful tools which can be used to either reward or punish you depending on your ability to deliver on your promises.

Much has been written about how the new social networks will change the way that products are marketed. Much less has been written about the implications that this has your for the survival of your business. In a world where customers are connected and can organise in huge numbers at very short notice, they are in fact forming Customer Unions, more instrumental than Trade Unions ever were to the commercial success of your business. We have 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 the post-recession era that will be the dominant factor in the determination of commercial success - or failure. Word of mouth and reputation 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 and manage a reputation for you in the turmoil of the Relationship Revolution. You need to work at these in every interaction, every single day.

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’.1 That’s not you as a business leader, nor your marketing team, nor your advertising partner. It’s their neighbours, their family, their work colleagues, the other members of their online community; their companions in the Customer Union. Your customers want you to tell the truth, they want you to deliver on your promises, they want their lives made less rather than more complicated, they want service and information at the speed of life, their life, made easier by the products and services you offer. They want someone to say ‘I’m sorry’ and mean it when something goes wrong.

Customer relationships are not the only relationships that matter in business. In fact, relationships are at the heart of everything that happens in commercial life. Customer relationships may be the sine qua non, life or death issue, but there are many other relationships of huge commercial significance. These are your relationships with colleagues, business partners, investors, competitors, media, and sometimes with the government. The success or failure of these relationships is determined, like all others, by the levels of trust established and maintained, and they will all have a demonstrable effect on your ability to attract and retain customers and create Unique Value in your business.

Size has nevermattered less. In thepost-recession era, it’sall about focus

Corporate culture is governed today 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 understand the kind of trust and confidence that underpin 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 differently. Ethics do not belong in the ghetto of a single department or director; they are the keystone of all responsible business and, therefore, part of every single employee’s job description. Size has never mattered less. In the post-recession era, it’s all about focus. In the chapters that follow, I will focus on what went wrong in the way that businesses have related to customers, and what Unique Value really looks like today. I want to help you build up a picture of what this revolution looks like, what it means for you, and how it will help your business grow, succeed and indeed survive. I want this book to give you a vision of what a better commercial future can look like and, finally, to inspire you with the courage you need to achieve this; to live the Relationship Revolution every day in your business life.

The urgency of theeconomic moment isclear

My global reputation has been built on understanding the role that customer relationships play in business success or failure, and trying to communicate this to others. I’ve travelled to more than 60 different countries and given nearly 500 speeches in the past twelve years. I think I have the best job in the world. I’ve been able to learn about how this fact of commercial life transcends cultures and industries to lie at the very heart of business in every industry, everywhere in the world - relationships are a universal truth. Prior to that, I was a member of senior management teams at British Airways and the loyalty management company Airmiles, working in both New York and London. At British Airways, I helped to create and then helped to manage what is judged by many as the most successful corporate training programme ever conducted in Europe, a programme called Winning for Customers, attended by over 55,000 BA staff. As a result, pilots, cabin crew, cooks, IT experts, HR administrators, engineers, company directors and others came together every day for a period of three years in cross-functional groups of 100. The goal was for them to understand better that customers lay at the very heart of BA’s success and profitability, that to gain customer loyalty was the job of every single person, and that to lay claim to our status as ‘the world’s favourite airline’ (which at that time was the truth!), everyone had to take responsibility to live these values every day. At Airmiles, I became Director of Customer Service and then, separately, Director of People and Culture. I was the first person in any European company to ever have this role and title, created in recognition that the same sense of urgency was required to focus on internal and external relationships, and the success of the business was dependent on getting both right.

I’ve seen for myself the kind of rewards that come from properly understanding the importance of relationships and getting them right. They have always mattered, but today they matter 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 you have to do is act.

To paraphrase Bill Clinton, ‘it’s the customer, stupid’. And as the Madison Avenue advertising legend David Ogilvy once famously said: ‘The customer isn’t a moron. She is your wife! Don’t lie to her and do not insult her intelligence.’

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.

Chapter 1

The Search for Unique Value

Today, everyone is searching for value. Everyone! That is the biggest, harshest, most challenging reality of the post-recession era through which we are all now living. Some people are going to Wal-Mart and McDonald’s for the very first time. Some are trading down from private jets to first class, from first class to business class, and from business class to economy. Others are choosing not to travel at all. Value is at the forefront of every consumer’s mind, at every end of the value chain. Every purchase, every decision, is made with that single idea looming large. This doesn’t just mean that people are spending less. It’s true that many people are, but what almost everyone is doing is trying to do more with less. In the messy aftermath of global recession, when people do spend money, they will want to feel they have achieved value in doing so. The success or failure of every business at this crucial moment in time depends on understanding this notion of value as never before. Hope is not a strategy. So you’d best have a plan.