This document provides an introduction and overview of a forthcoming book on strategic customer relationship management and the seven deadly sins that undermine effective customer relationships. It discusses the importance of customer focus for organizations and outlines some of the key requirements for senior leadership to exhibit customer-focused behaviors and ensure the organization has the right values, culture, processes, and systems to prioritize customers. The document then introduces and elaborates on the "seven deadly sins," including a failure to understand customer needs at a deep level, not having defined relationship strategies tailored to different customer segments, and not answering the question of "what's in it for the customer?" for key business objectives. It poses a series of questions to prompt reflection on how well an organization measures up in

1. A Forthcoming Book in 2015
Strategic Customer Relationship Management
& The 7 Deadly Sins
Complete and Unabridged Introduction
By Dr. Ted Marra
December 2014
After nearly 40 years across more than 37 countries on this vast planet and having assisted more than 155 of some of the
best known organisations in the world, I still continue to see as many as 80% of Fortune 500, FTSE 100 and others in Asia,
the Middle East, Malaysia, South America and elsewhere WILLINGLY allow millions of dollars. Euros, pounds sterling, yen
(or whatever your local currency happens to be) in profit to slip through the “cracks” – literally being “left on the table” –
lost forevermore. Why? Simple really yet seemingly so innocuous to most executives – a blatant failure to effectively and
efficiently establish and maintain meaningful relationships with the customers which they expect and want most – full stop!
You know and I know, if you are a senior executive, much more is said than done regarding customers and their
importance to the organisation. And, when “push comes to shove”, the customer will get put on the proverbial “back
burner” – alone there except for the ‘people’ in your organisation who are generally taken for granted to an even greater
extent than your customers. Of course, as we all know, in the final analysis your people are the ones charged with the
responsibility of establishing, building and maintaining the relationship with the customers you need and want most. You,
as senior executives, seldom get your hands dirty or ‘muck in’ as the British say.
The most difficult aspect of writing this article was to limit the discussion to what I would consider to be the “Top 7” most
deadly sins as there are literally so many to choose from - unfortunately! However, I guarantee that if you address even
one of the seven I have identified in this article, your organisation will be light years ahead of where it was.
The First Deadly Sin:
“Failure of the senior management team to exhibit role model behaviours (or, in other words, “not walking
the talk regarding the customer”) and not understanding the true requirements for ensuring
a customer focused organisation”
While many senior executives “talk the good talk” regarding the importance of the customer or “how customer focused we
are as an organisation or need to be”, the REALITY is that 80% (using our Pareto Principle) are either clueless or have
limited knowledge of the actual requirements they must meet as members of the leadership team or as an organisation to
become or maintain true customer focus. In this article I will only mention briefly the cultural issues – the values/beliefs
needed to be successful, yet the culture of an organisation is like the “soil”. You cannot grow a good crop unless the soil is
properly prepared and cultivated or nurtured continuously. The right behaviours are critical – especially from senior
executives. See Jack Welch and his book “Winning” for how a hard-nosed executive finally saw the light on this soft issue.
Here is what I mean regarding values and behaviours
First, I find that far too often senior management (without any inputs from staff) create a set of values which they think
sound pretty good to people in the organisation, customers and other stakeholders. However, more often than not, when
put to the test, the employees, customers, other stakeholders and worst of all even the senior management that created
them do not know what they mean. In essence, if I went into one such organisation and asked each member of the 10
people on the Management Committee what “Innovation” meant in their organisation, I would inevitably receive 10
different answers. It must be the case, however, that if any member of staff asks a member of the senior management
team what “innovation” means, each and every one should give that staff member the same answer. This was the case for
an online retailer called TradeHolding from Karachi, Pakistan. Good luck!
Second, senior management almost never defines the behaviours that they, as well as staff members, must exhibit to be
seen clearly as “role models” for that value or belief. I remember locking up senior management at Data General in Boston
until they came up with these behaviours – it took a while, but as hunger and potty breaks were needed the process
accelerated! Here is a simple example from a company I helped start in Karachi, Pakistan called Sybrid, which I am happy to
say is quite successful today some 7 years later.

2. 1. Belief #1: We make sure the customer comes first
a. Definition: At Sybrid, our future depends on how well we take care of our customers. Without customers, we have
no business. We must always listen and learn from our customers and act in their best interest. Give them the
benefit of the doubt, e.g., innocent until proven guilty. We must work as a team to support our customers and
make them feel good about doing business with us.
b. Behaviours for being identified as a role model:
We always take the time to listen to our customers – understanding accurately what their requirements
are
We must always show empathy – look at the situation through the eyes of the customers
We make sure that we always work towards win-win solutions – a win for the customer and win for the
Sybrid
These behaviours should be incorporated in your 360 degree feedback systems! And please do not get me started on why I
think most 360 degree systems used by organisations are ridiculous!
Requirements
Now, getting back to the specific requirements for ensure customer focus, here is just one of seven I believe are critical to
success JUST for Leadership, one of the many categories of the Baldrige Performance Excellence or EFQM Business
Excellence criteria - both of which serve as a foundation of my work. I have developed customer focused criteria for each
category – people, process and all the others.
1. “Management at the senior level regularly meets with customers (B2B or B2C) to listen and learn about
changing requirements/evolving trends/new issues; how their organisation is performing in meeting these
requirements/sensing the evolving trends or addressing the issues as the customers perceive them; and to
strengthen relationships with customers”
I can say to all those reading this article that I can GUARANTEE that at least 50% of any Management Team is totally inept –
incompetent in their customer skills. If you put them in front of a strategically important customer they are most likely to
act as a “lethal weapon” and destroy or at least weaken the relationship – NOT strengthen it. The key issue is “What
changes in career-pathing, recognition, performance evaluation and reward systems need to be made to ensure this never
happens in your organisation?”
Here are my questions for you and your Management Committee:
a) Are you and each member of your Management Team doing this regularly and systematically?
b) How have you ensured that each member of the Management Committee including yourself know what
to do when in front of a strategically important customer to strengthen the relationship – not weaken it as
is the case in most organisation’s 50% of the time?
c) What have you and your Team learned and what actions have you taken as a result which have added
value for your customers?
d) How do you know you have strengthened the relationship AT LEAST with your MOST STRATEGICALLY
IMPORTANT customers (they AREN’T necessarily the ones that are giving you the most revenue this year),
e.g., what measurements do you monitor?
e) Is your organisational “soil” or culture receptive of a customer focused approach to the market?
f) Have you defined the values and behaviours in your organisation which can help enable the successful
achievement of a customer focused approach to the market?
g) Are your human resource systems (e.g., recognition, performance evaluation, reward and career-pathing)
aligned with and motivate the behaviours you need to be successful in being recognized as a truly
customer focused organisation?

3. The Second Deadly Sin:
“Not Answering the Question: What’s in it for the customer?”
This is a relatively easy one, but I cannot tell you the number of executives who are literally “awed” when I speak to them
about it. I simply ask them to prepare a matrix with their key stakeholders across the top (surprisingly there are many who
do not know how to define “stakeholder” properly, but moving on ….) and then place their key business objectives down
the side.
Now here is where the real “fun” starts. For each key business objective, answer the following question: “If we as an
organisation achieve that key business objective, which of our key stakeholders benefit most?” Or, if you like, ask, “How
does the customer benefit (receive value) from our achievement of that key business objective?” I can tell you from my
experience that too often the answer to the question of “What’s in it for the customer?” is too little or nothing at all. The
focus is on competition, financial markets/analysts, stockholders (pension funds et al), investors, reducing costs (which too
often brings a reduction in people, training, service or all three) – in effect, trying to make your organisation look good to
the outside world, but in reality doing little to truly benefit the customer or ensure the longer-term sustainability of the
organisation. So what does your matrix look like? Is there something for the customer? Is there “balance”? This is a key
element of the world-class strategic frameworks (Baldrige and EFQM mentioned earlier) so every stakeholder gets
something?
Now here are the questions for you and the Management Committee:
a) What is the probability that you will achieve each key business objective – your realistic assessment as it
were?
b) Do you have too many key business objectives for the resources available (people, funding) or will you
reach a point where you are not making much forward progress, become frustrated and lose patience?
c) What is your “customer impact statement” for each key business objective? That is, if you achieve that
objective, what does the customer get?
d) What value is created and how will you deliver it for each key business objective achieved?
e) In reality, which of your key business objectives are really most strategically important to your
organisation – your customers, your competitive situation, your long-term sustainability?
f) Is there balance – a key issue in the Baldrige Performance Excellence and EFQM Business Excellence
criteria – that is, does every stakeholder receive something from what you hope to achieve?
g) Which of your stakeholders are really most strategically important to the future success of your
organisation (and are they being taken care of as per (f) above? Do you have ‘criteria’ for identifying ‘most
strategically important’?
The Third Deadly Sin:
“Failure to define specific relationship strategies”
It would surprise you how many organisations today still follow a “one size fits all” strategy (one which, by the way, dooms
your organisation to abject failure). Such an approach is NOT “strategic”. I call it laziness – the path of least resistance! I call
it “taking the customer for granted”. “Just let us get our hooks into a customer once – even if we never see them again, it’s
OK!” No segmentation analysis by life-style, demographics, attitudes or anything else which could prove valuable to the
development of effective relationship strategies and identifying the customers you really want most and design an
approach for attracting them and keeping them as a result of an appropriate value proposition – the essence of your
relationship strategy. Need I go on?
These strategies should flow directly from the business plan and key business objectives of your organisation, but often do
not exist. The fact is, as you should know, NOT all customer want to be treated the same. I could relate the case of Hilton
Hotels Europe and their Diamond customers – those who spend a minimum of some 150 nights per year in a Hilton Hotel.
While representing only about 5% of the customer base, they generate some 45% of the revenue and since 80% of the
room rate is profit, they generate a significant amount (40-50%) of the profit as well. Trust me, as Hilton Hotels Europe
found out the hard way, this most strategically important segment of customers DID NOT want to be treated as the
ordinary 3-5 night a year or occasional holiday customer. Yet, there was NO strategy in place which was effective – just a
series of rules and perks (e.g., a rewards programme which was minimal and often times not executed effectively at the
individual property level – often being dispensed or followed inconsistently across the Hilton Hotels globally to these
Diamond customer’s dismay. The result, it was causing them to shift their allegiance to other hotel chains. I could on with

4. cases of the “Traveler” class of customers of Virgin trains in the U.K., the “high net worth customers” of the Royal Bank of
Scotland Group and many more
I leave you with an example from Clorox Bleach in San Francisco (at least it was when I worked with them). Customers
would call and say to customer service agents, “I don’t like the taste of your bleach!” or they would ask, “When will Clorox
be coming out with a strawberry flavored bleach?” Some people do brush their teeth and gargle with bleach. What a great
way to hasten the “grim reaper?” So what did Clorox do? They fired these customers! Apologised for the taste of their
bleach in the nicest way possible and sent each customer multiple coupons for money off on competitive bleach in the
hope that these customers would try it. No one wants customers to die on ‘their watch’!
In the B2B area, a critical factor for success is identifying your “plain vanilla” (e.g., tactical, short-term oriented, cost driven,
arms-length relationship, view you as a vendor, more trouble than they are worth) accounts from your “value oriented”
(e.g., strategic, long-term, value driven, looking for a business partner relationship) customers. Rid yourself of many of your
“plain vanilla” customers and go deeper and broader with your “value oriented” ones! Yes, you will have to keep some
‘plain vanilla’ ones just for marketing purposes. Let’s face it, having IKEA on your client list looks good even if they are
‘painful’ to do business with.
The fact of the matter, whether B2C or B2B, to be successful an organisation must (1) identify the customers it wants most
(not take any warm body with a pulse); (2) attract those customers (if you want to catch salmon, you must put the right bait
on the hook and go to where the salmon swim!); and (3) keep them by building and maintaining a long-term relationship
based upon an appropriate value proposition. It is totally acceptable to fire some customers (but do it diplomatically and
after having made a good faith effort to satisfy them). Just be aware (based upon research) that 5% of customers (of any
organisation!) can never be satisfied no matter what you do or don’t do! You can’t save every customer – nor do you want
to, but make sure you have an effective damage control process in place.
Here are the questions for you and the Management Committee:
a) How many B2C segments do you serve and which ones are most strategically important to the future
success of your organisation and why? Rank order your capability to serve each segment in an exceptional
manner – one that clearly distinguishes your organisation in their minds.
b) Who are your most strategically important B2B customers – not the short-term focused, tactical, treat you
as a vendor and a mushroom type of accounts but the long-term focused, strategic, treat you as a
business partner and share their plans (and more – e.g., resources, technologies) with you type of
accounts?
c) How do your relationship strategies differ for the two types of B2B customers you found in (b) above?
Why not rid yourself of those Type I accounts – those who are more trouble than they worth? Which
ones must you keep simply because in your marketing having them as a client makes you look good even
though they are painful to have as customers?
d) What does your business process for developing effective relationship strategies look like? Is it a
legitimate business process or is it just informal and ad hoc in nature?
e) What customers can you “fire” right now and be better for it and how can you do it diplomatically?
f) How do you strengthen the relationships with your most strategically important customers (B2C or B2B)
to enjoy higher loyalty, greater profitable growth and share of business?
The Fourth Deadly Sin:
“A failure to understand your customers to the appropriate depth and breadth and to add value”
There are 3 levels of understanding which an organisation must have regarding their customers. The first level is what I will
call “basic needs”. These are the things which customers expect to be routinely perfect like on-time and accurate
invoices/statements, on-time or complete deliveries and so. You need to know what these are for your strategic customer
segments and “value oriented” B2B customers. I can give you example after example for Corning or Ryder Truck rental and
more. In the case of Corning, the CEO of the Division making screens for Toshiba at the time took his senior staff to meet
the CEO and senior staff of Toshiba for the exclusive purpose of strengthening the business relationship. As the CEO of the
Corning Division stood up to speak, the CEO of Toshiba stood up and told the Corning Executive to please sit down. The
CEO of Toshiba went on to say, as I recall, “Until your invoices are correct and your deliveries are on time, etc., etc., we do
not wish to strengthen our business relationship with Corning!” You get the message. Listen, if you can’t do the basic
routine things almost flawlessly, why would I want to expand the business relationship into more challenging or

5. sophisticated areas? Failure on multiple occasions to deliver the “basics” almost flawlessly will lead to a defection or at a
minimum having your good account split their purchasing between you and others.
The fact of the matter is that EVERY customer has a “wish list”. Your job is to find out what’s on that “wish list”! It does
mean that you must do or give the customer everything on their “wish list” but addressing wishes selectively can lead to
differentiation and stronger loyalty or more. I remember when McDonnell-Douglas built the prototypes of their C-17 cargo
plane and tested it with the U.S Air Force at a base in North Carolina I believe. The pilots literally jumped for joy and were
heard to say, “I can’t believe it! This plane does all the things that I had always wished for and thought I would never get”.
Did McDonnell-Douglas get the order? You better believe it! They listened to their customers through in-depth interviews
and focus groups – not just surveys.
Then there is “value”. To me, “value” should be defined as “any tangible or intangible benefit which the customer
perceives the competition is either unwilling or unable to provide”. As such, “value” provides an immediate source of
differentiation and competitive advantage. Powerful! Know too that there are 10 sources of value (1)
Image/reputation/brand strength (the stuff that a “feel good” feeling comes from); (2) business process ((a) ease of doing
business; (b) cycle time or responsiveness; (3) people (competency, proactivity, attitude of service); (4)-(5) range of product
and services (and the degree innovation recognised by the customer); (6) technology – an enabler, but ensure user
friendliness; (7) support (being there when the customer needs you, not just when you want to be; effective and efficient
problem/complaint management (and prevention); never leaving the customer in a state of uncertainty); (8) innovation;
(0( information; (10) customer engagement experiences. The unfortunate thing is that most organisations focus attention
on only 2, possibly 3 of these sources (product, service and technology) and do not do that good a job with them.
In my opinion, “value” when defined properly as above is one of the most important strategic concepts of the past 15-20
years. But “How do you assess if you are adding value to customers?” First, you must recognise that when a customer
comes to do business with your organisation they incur two (2) costs. The first is the obvious one – the “economic cost” –
what the customer must pay to get the product, service or support they desire from your organisation. Just don’t follow
Siemens Telecommunications approach which was a relentless cost reduction approach in which the loss of people,
demoralizing of the rest and unhappy customers resulted.
However, even if you are the lowest cost, highest quality provider of widgets or services or support but the emotional cost
is far too high your customers will defect. Emotional cost is the amount of pain the customer must endure to do business
with you. Pain can come from being difficult to do business with, being too time consuming, being too bureaucratic, (the 3
P’s – paperwork, procedure sand policies). The list goes on. In fact, ABB went out to its B2B customers that had stopped
doing business with it or had significantly reduced their business with ABB to find out why. In 70% of the cases, customers
said ABB was “too difficult to do business with”.
Here are the questions for you and the Management Committee:
a) For each strategically important consumer segment (B2C) or B2B account do you know the “basics”?
b) For each strategically important consumer segment (B2C) or B2B account do you know the “wishes”?
c) For each strategically important consumer segment (B2C) or B2B account do you know the sources of
“value” that will position your organisation as a trusted advisor, business partner or valuable resource?
d) How do you define “value” currently in your organisation and how can that definition be improved?
e) How many sources of “value” are you using currently and how well are you using them? Where can
improvements be made?
f) From the list of “wishes”, which ones could you leverage for greater competitive advantage and
differentiation to gain greater return from your core competencies?
g) Where is competition doing a better job and do you know why or how? Where are you doing a better job
- how?
h) How and where can you reduce the emotional cost of your customers? What would be the benefit to you
and them?
The Fifth Deadly Sin:
“A failure to understand and improve the customer engagement system”
It never ceases to amaze me how little management, in general, and senior management in particular, know about their
customer engagement system – that array of integrated processes which represent where and how the customer and your
organisation interact or engage one another to conduct business. What, by the way, are your ‘rules for engagement’?

6. Here is an example of an engagement system from Motorola Telecommunications as it once was. What are the facts? Once
the customer has decided to purchase a telecommunication system (presuming a timely, complete and innovative sales
proposal), the system must be designed, built, delivered, installed, customer personnel trained as well as on-going
maintenance (often a separate more profitable side of the business) and technical support provided. There are, of course,
the more mundane activities of credit approval, invoicing and other account maintenance activities of an administrative
nature. The point is that when the customer comes to their next purchase decision, they will base their interest in Motorola
on their combined experiences across all these customer engagement processes. You need to know which of these
engagement processes are most critical to the relationship, why and monitor them closely as some are more important
than others.
Each of these engagement processes are legitimate business processes. As such your organisation needs to be versed in
business process knowldege and practise – establish appropriate process effectivenss measures (in-process and end process
measures) to know if the “process“ is working properly; problem-solving techniques (e.g., root cause analysis and
prevention approaches) should be known and employed; and process improvement/re-engineering techniques as well as
benchmarking/comparisons to best practise (understanding what represents “best practise“ and how to adapt it to your
organisation) must be on-going. Each of these customer engagement or interface processes is supported in turn by a
number of other internal core business processes such as the management and development of people business process.
How well these supporting processes are working can influence greatly how well the customer engagement process is
working.
We can also look at a B2C situation. Here is Rautakesko - the Bauhaus of Finland. Some years ago Rautakesko began to feel
the onslaught of competition for the first time. They were in a panic. So, we had a look at the situation as the following
diagramme illustrates. In this diagramme you will note four (4) key decision points by customers. How could Rautakesko
better ensure that the customer's decision was one that was made in favour of Rautakesko? That is a key strategic question
as well as a key to profitbale growth and stronger customer relationships! First we had to establish a baseline of customer
understanding from which we could improve.

7. You can inspect the above diagramme for yourself. I won't go into a lot of detail at this time regarding it. Clearly, however,
the far left is all about “hooking“ or “connecting“ with the customer
Here are some key questions for you and the Management Committee:
a) Where is competition doing better than you are in the eyes of the customer – in what aspect of customer
engagement?
b) What are the customer’s basic requirements, wishes and what value are you delivering in each engagement
process and how well are you meeting (or exceeding, if the ROI is attractive) these basic requirements, wishes or in
delivering value?
c) Where are the points of pain – the engagement processes in which the customer is having the greatest number of
problems, greatest difficulty in doing business with our organisation (hint: look at your complaints management
system)?
d) Which are the most important engagement processes (from the customer perspective) and why?
e) How well and how often do you monitor performance in these most important engagements? Overall?
f) Where are you people having the greatest difficulty in satisfying the customer? Why? And how do you fix it?
The Sixth Deadly Sin:
“Having dysfunctional or underutilised sensing processes”
Ah, the “whiskers of the cat”! I don’t know how many of you reading this article have ever had a cat for a pet. I have had cats much
of my life. Here’s the question, “If your cat woke up one morning finding that its whiskers had fallen off during the night, how would
your cat behave?” No doubt you would notice your cat was unable to judge distances effectively, being a bit wobbly, tentative.
Bottom line – its judgment would be impaired! The whiskers for an organisation are its “sensing processes” – those which should
provide effective, efficient and continuous feedback from the external and internal operating environment.
In any organisation there should be three (3) external customer “sensing processes” which are paramount – critical to survival
(please note that relying on only one (1) source of external customer feedback is like being a Blow Fish tester or playing Russian
Roulette – sooner or later your end comes prematurely. Don’t let it! The Seventh Sin will address this issue in a bit more detail).
These three are (1) your customer satisfaction/loyalty measurement and management system (emphasis on loyalty and emphasis on
management); (2) your complaint management process; and (3) your customer service/contact centre. Sure there are others –
either direct or indirect (e.g., credits or refunds, returns, change requests, and so on), account management reviews (especially if
done properly – most are not!), customer visits and more. Then too there are the more systematic and continuous approaches to
performing in-depth interviews of key customer decision makers, decision influencers and users as well as focus groups – powerful
techniques which result in rich, value laden and actionable information.
Now it would be easy for me to write a book on this topic having spent 30 years improving contact centre performance, measuring
and managing customer satisfaction/loyalty and being a “thought leader” in complaints management. Read more on these topics in
my journal articles or forthcoming book series (the first one, ‘The Wisdom Chronicles: Competing to Win’ is already available on
Amazon) for senior executives entitled, “Why Senior Management Still Doesn’t Get It After All These Years”. For our current article
allow me some latitude to just hit a just a few critical high points – points you need to internalise as a senior executive if you have
any hope of building a “secure” customer base made up of those customers you really want and who would not leave you even
under the penalty of death! Remember, the worst relationship you can have with customers is one in which they are “indifferent”
about their relationship with your organisation. These are the customers who use any port in a storm. They are driven generally by
two demons: price and availability. These are the people who will drive 20 extra miles to find a petrol station that sells Euro diesel
petrol for 10 pence per litre less than other stations.
As I discussed the situation with senior executives from Stora Enso, one of the world’s largest paper manufacturing organisations, I
was told that their customers constantly beat them up about price and availability and, according to them, customers wanted
nothing else. How wrong can you be? The fact of the matter is that Stora Enso did not offer their customer anything else – no value!
What happens is that when customers receive no perceived value from an organisation they use price as a means of differentiation –
they will cajole, persist and threaten until you give them what they want causing you to cut your margins to keep the factories
humming. What’s an immediate indicator that your customers are indifferent? If you do a comparative customer satisfaction
survey the right way and the feedback is that “your organisation looks like every other organisation they do business with” - in effect
all paper companies are the same, you have built your factories on shifting sand. At the time, Stora Enso executives indicated as
many as 50%+ of customer fell into this line of thinking – scary! These are customers who will be there today and gone tomorrow –
no loyalty at all. How would you characterise the relationship with your customers: indifferent, satisfied, loyal or secure? Do you
know? You need to!

8. Customer Satisfaction/Loyalty Measurement and Management
Let’s continue to move along. Understand that I have an ABD (all but the dissertation) degree in advanced mathematics and
statistics/measurement and I also managed the analysis department of one of the largest and best known customer satisfaction
measurement companies in the U.S. – so I know of what I speak (even though the right side of my brain eventually took over leading
to my pursuit of a degree in strategic management). The problems in this area would number at least 20 - 25. Chief among them
are the following:
(1) measuring the wrong things – surveys which focus on just the “basics” and none of the possible areas of differentiation
provided as a result of trying to first identify the wishes or how to add value;
(2) measuring the wrong way – two things, (a) measuring too often (becoming annoying, reducing response level to
unacceptably low levels, gathering poor quality data) or not measuring often enough (I had a customer in South
Carolina, Sonoco Products who made paper products and every 7 years they would wake up from their sleep and
decide it was time to survey their customers as nothing very exciting ever happened in their industry – static
technology, static market conditions – so they thought – but as we know, nothing lasts forever!). Today talking to your
customers once a year is absurd given the turbulent, rapidly changing technology and market conditions that exist in
virtually every sector! By the time you get around to asking the questions (often the wrong questions because you or
your account manager is afraid to ask the right questions for fear the answer received may be less than stellar), your
customer has already made their decision to go with a competitor – and that applies even if you have a key account
manager (the reasons behind that issue are many and will be saved for another article). Try this little test. List your top
20-25 B2B customers currently. Go back 3 years and obtain the same list. Compare. What does it tell you? Do you
know why they defected or reduced their business? Trust me, some account manager knows but he or she isn’t talking!
(3) trying to utilise the customer satisfaction survey as a marketing survey to probe for new business;
(4) discounting of the information coming from these surveys because management has decreed that only the “wacko”
customers responded and therefore the data is not representative (on this latter issue remember that to obtain 95%
accuracy from your survey whether the customer has 10,000 customers or 1,000,000 customers, you need the same
size sample of 200 – done properly as a random or stratified sample);
(5) failure to do appropriate analysis or interpretation and act on the data;
(6) failure to share this customer feedback with the people in the organisation that really need to know it to drive
improvement or for recognition and reward of the role model employees;
(7) failure to let the customers know that you are acting on their feedback and appreciative of their feedback;
(8) using a “4-point” satisfaction scale resulting in completely “biased” results because this is a ‘forced choice” scale – you
force the customer to choose satisfied or dissatisfied and psychology says that when faced with this choice most often
customers choose satisfied. But the fact is they aren’t because they are indifferent about your organisation (remember
how important the uncommitted voters are in an election);
(9) failure to utilise key event surveys to provide feedback continuously about the customer engagement processes –
especially those which are most critical to the relationship (e.g., at Xerox it was the “service” engagement process
which was most important)
(10) Believing that the number of complaints or market share represent good measures of how satisfied the customer is or
isn’t – utter nonsense!
(11) Failure to include the 4 most fundamental questions on your surveys related to: (a) reliability – first time, on time,
every time; (b) ease of doing business; (c) responsiveness; (d) understanding my requirements and my organisation (if
B2B) or life-style of B2C
Be aware, as Xerox found out and research by other consulting organisations such as Bain later confirmed, that even if a customer
rates you a “5” on a “5-point” scale (say, where 1=very dissatisfied and 5= very or completely satisfied) customers will still defect
because they are not recognising any “value” from the relationship. However, the customers who rate you a “5” are “6 times” more
likely to buy again than those who rate you a “4”! So what is important is to track the percentages of “5’s” and the shifts occurring

9. in your survey results from 3 to 4 or 5 to 4, for example. In some organisations they delude themselves by adding together any
customer who rates them a 3, 4 or 5 and saying they are all satisfied. The result? It produces a big number which is completely false
or misleading! Your “3’s” are your biggest opportunity – but they are “indifferent” (not satisfied!) – they are the fence sitters waiting
to see if you give them any reasons to move up to a 4 or, if not, then they shift down to a 2. DO NOT include “3’s” in your
satisfaction score! These customers are not satisfied!
You really need to focus on loyalty. The gurus of customer satisfaction have made it clear (just as stated above regarding the 5% of
your customers who will never be satisfied and should be fired or coaxed to do business with competition) that the single best
measure of loyalty is “willingness to recommend”. When you think about it makes perfect sense. How many times have you
personally recommended a restaurant or movie or car dealership for service and so on? In essence you are putting your reputation
on the line and you do not want to risk damaging the trust and confidence that has been built over time in a relationship by giving a
recommendation that proves false. It is a powerful and accurate measure.
Another short example from Xerox and then we will move on. At one time when Xerox conducted comparative customer
satisfaction surveys of their copier customers. When they found that any aspect of the product, service or relationship scored lower
than a competitor, senior management would demand that Xerox improve to beat the competition. Finally, one day I asked, “Why
are you doing this?” The fact of the matter is that UNLESS the attribute/issue in question is important to the customer, why spend
the money to improve it? If the competition wants to spend their money to be the best in an area which is unimportant to the
customer, let them waste their money. However, over time one must monitor to see if an attribute which was unimportant at one
time is now becoming important. A case in point is when I worked with General Motors back in 1973 during the Arab oil embargo
causing gas price hikes and shortages. It was then that fuel economy, which up to that point (you know that in 1972 I paid 25 cents
per gallon for petrol in Lansing, Michigan!) had been unimportant, suddenly moved to the top of the list of what was most important
to customers! Things change and you can’t allow yourself to be blindsided! You need to anticipate and to identify emerging trends
quickly.
Here are the questions for you and the Management Committee for the first “sensing process”:
Customer Satisfaction Measurement and Management
a) When you review the questions on each of your customer satisfaction surveys, what % of these questions focus on (a)
basics; (b) sources of differentiation, e.g., “wishes” and “sources of value”? Do you need to make some changes
because of “imbalance”?
b) Do you measure too often or not often enough? What is the right frequency and have you talked to your customers to
determine what approach (frequency and method) they would prefer to provide feedback?
c) How do you balance and utilise qualitative methods and quantitative methods?
d) How do you determine overall satisfaction? If you use a 5-point scale (completely dissatisfied to completely satisfied,
for example) do you add the 3’s, 4’s and 5’s together? Do you know why this is wrong and what you should be
monitoring?
e) What analysis or interpretation process is in place to transform the data into actionable information for decision-
making?
f) How do you measure “loyalty” and are you doing it using “best practice”?
g) What scale do you use and why is it most appropriate? Be aware that using a “4-point” satisfaction scale will result in
completely “biased” results.
h) What key event surveys are you using which provide feedback continuously about the customer engagement processes
most critical to the relationship?
i) How do you compare customer satisfaction and loyalty data with other customer feedback (e.g., complaints, call
center) to obtain the complete picture of your relationship with customers?
j) Do you know why the number of complaints or market share do not represent a good measure of how satisfied the
customer are?
k) Do you perform comparative customer satisfaction surveys and what is your response if your score is lower than one or
more of your competitors? What is the one question you must ask before taking action?
l) What does your customer satisfaction/loyalty measurement and management process look like? Is it a bona fide
process? How do you know if it is effective and efficient?
Complaints Management
Well, what can I say? Many organisations still believe that complaints are a necessary evil – a nuisance. Many organisations find
innovative ways to keep the number of complaints low by handling them informally and not having any audit trail or classifying them

10. by some other name like customer requests or information contacts. Often there is no true complaints management process with
process effectiveness measures and on-going improvement. Many times little or no meaningful analysis and interpretation is done
and there is little if any action to drive improvements in products, services, support or anything else. It should be that customer
satisfaction data and complaints data are inversely correlated. As one goes down, the other should go up. Yet management rarely
seems to connect the dots and instead looks at these sources of data independently. Further, I have worked for organisations which
have purported to have a complaints system, yet had no definition for a complaint! Seems ridiculous to me – what do you think?
One has to wonder what they are collecting in the way of data and information.
The point to remember is that every problem and complaint causes a reduction in customer loyalty of 15-35% (or more, as was the
fact for Volvo at one time) – a fact borne out by research over years of monitoring. This is where the quality of your “recovery”
approach – your complaints management process is key so that you can restore that damaged trust and confidence and rebuild the
loyalty of your customer. Also know that a problem is not necessarily a complaint but can become one (more on this point in
another article).
Another key point is that not all complaints are created equal. Some complaints will lead to a defection faster than others – these
are the ones which leave the customer saying to themselves, “I never want to do business with that organisation again because of
my negative experience”. One example comes from a high technology company I worked with. It showed that the most frequently
occurring problem was with delivery (late delivery, incomplete delivery, damaged items and so on). Looking at the standard problem
Pareto chart, this was the problem occurring with a frequency of 40% which most six sigma (yellow belts, green belts or black belts)
or standard problem-solving quality teams) would attack. However, if you looked at the same problem set from the customer
perspective (severity instead of frequency of occurrence), you saw that the most damaging issue (to the relationship with the
customer) was sales – NOT delivery! Think about it. What were the top three problems in this sales category? The number 1 most
damaging problem (which often evolved into a complaint) was “not returning telephone calls or responding to emails”. The second
was “promising and not delivering – e.g., not meeting your commitments. The third was “not meeting my requirements”. Why
would that latter one be on the list? In effect the customer is saying that your sales rep sold them something they really did not
need or want. Why? Because of one of three things predominately:
(1) The sales rep did too much talking and not enough listening (the most successful sales people in the world spend 70-
80% of the time with their customers listening!);
(2) The sales rep received a “spiff” or extra bonus for selling certain products or services so he/she would try to influence
the customer accordingly;
(3) The sales rep lacked knowledge or experience with the technology or product the customer really needed so felt
uncomfortable discussing it or failed to mention it at all even when he/she could see that this is what the customer
really needed (also it would be a sign of weakness to bring in someone who might help because then possibly the
commission would be split). The fact is that often incentives sometimes cause people to perform “unnatural acts”
unless structured appropriately.
(4) Defining a complaint too broadly such as “any source of dissatisfaction”
There are three other simple truths which you as a senior executive need to know. The longer you allow a complaint to remain
unresolved, the less chance you have of ever satisfying the customer (e.g., one of many cases being the high net worth customers at
Royal Bank of Scotland where 33% closed their accounts and the others reduced their business but remained with the Bank ONLY
because of the strength of the personal relationship with key Branch personnel – but refused to expand their business to such areas
as mortgages or car loans, merely left their basic account open). In fact, you will reach a point in time when no matter what you do
will be viewed as a meaningless gesture – you will, in essence, be throwing money away. The customer thinking? If you really cared
about me – valued my business you would look after me more responsively. This is why many complaints are escalated because
they know that if the complaint crosses an executive’s desk, something will happen. If you successfully resolve a customer’s
complaint in a timely manner, their loyalty (willingness to recommend) can be restored to a level even higher than before! Why?
Because one of the key considerations the customer had when they chose to do business with your organisation was that they
believed you would stand behind the product, service or support they purchased – if they had a problem, you would be there for
them. When you do just that, they pat themselves on the back and think, “I made a good decision doing business with this
organisation” – self-affirmation and that “feel good feeling”.
Then there is the “multiplier effect”. At Ford Motor Company, the Service Department was responsible for the complaint/contact
centre which was receiving approximately 30,000 complaints per year. Yet, what we discovered through the use of something called
the “problem detection survey” was that for the 30,000 official complaints registered at head office, there were 6 million problems
occurring annually among the customer base! Ouch!

11. There are, of course, customers who do not complain. Your job as a senior executive is to increase the number of complaints
because only then to you have some chance of restoring the relationships and learning (for improvement) what actions need to be
taken. Why? Because the customers who do not complain have the lowest loyalty – often as low as 5-15% loyalty! The issue is also
“word-of-mouth” – how many other people does the customer tell about the good or bad experience they had with your
organisation. The statistics say (see “Complaint Handling in America, by TARP) that the median number of people told about a
problem or complaint is 16 with 20-25% telling more than 20 others. Think about a personal situation. How many people do you tell
about a bad experience in getting your car serviced or a bad dining experience at a restaurant? A good experience? The median is 8.
So, bad news travels farther and faster than good news. How much business have you lost just because of a negative statement
made by an unhappy customer of yours? Do you have a clue? Again, the research has shown that 65% of people listen to the
recommendations of friends and colleagues before they act. A “problem detection survey methodology” would give you this
information and also determine the effectiveness of your complaints management system in terms of its capability to restore
customer loyalty after a negative experience.
I would suspect that if you went to the Coors Beer website, Purina Website, Royal Bank of Scotland Group website, Xerox Office
Services website and many more you would find that they are still utilising the best practice complaints management approach
which I developed and evolved over some 30 years (or look at my IQA Complaint Management Journal Articles available as free
downloads on SlideShare). This best practice complaints management process (along with key process effectiveness measures) is a
process to be utilised by customer service representatives or whoever manages (not just “handles”) complaints in your organisation
(hopefully it is not just the quality department). It is a four-step process. First “identify” the real issue. By that I mean that often
when a customer complains their emotional level is high and they throw everything but the kitchen sink at you. You need to
actively”listen and probe” to get to the bottom of it – be a detective to determine the true root cause of the complaint. Second, you
need to assess the “severity” of the issue from the customer’s perspective – namely look at it through the eyes of the customer –
empathy! Was it a minor inconvenience or did it cause loss of a day’s income? Third, to be successful in managing a complaint to a
win-win conclusion – you MUST ask one very important question of the customer! Do you know what it is? Remember, you are
“negotiating”! You must always ask the customer “what they would like you to do”. Why? Simple really. If you do not ask, then
you are making assumptions – assumptions which might prove right or wrong. If you are going to negotiate successfully you must
know what the customer’s position is. It does not mean that you will give the customer exactly what they want, but you need to
know otherwise you are flying in the dark, offering things which the customer will not consider – wasting time and effort and raising
that emotional cost of the customer even further! Once you have negotiated the solution, then you must follow-through on your
commitment. If, for any reason, you promised that something would be done in a certain timeframe and it cannot happen, then call
the customer! Let them know what is happening and why.
Here are the questions for you and the Management Committee:
a) How does your organisation define “complaint”?
b) Do you understand why a “problem” and a “complaint” are not the same thing?
c) What are you doing to maximise the number of complaints you are receiving?
d) Do you understand the “multiplier” effect? That is, for every 1 complaint received at head office there may be 10
or more problem occurrences among your customer base?
e) What is your approach to the early detection of a potential customer defection and how do you intervene?
f) Do you understand the “word-of-mouth” effective for your organisation? How many people receive negative or
positive references about your organisation from your existing customers? How many of your new customers are a
direct result of an existing customer giving them a positive referral?
g) Do you know how much more it costs to get a new customer for your organisation than to keep an existing one?
h) What are the best measures for assessing the effectiveness of your complaints management approach? Do you
know best practise? Are you using it?
i) Is your approach to complaints management a true “process” or just an informal, ad hoc approach/activity?
j) Which complaints or problems are most damaging to the relationship with your customers – especially your most
strategically important ones and what are you doing to eliminate them?
k) How many of your customers experience problems in doing business with your organisation, yet do not complain?
Do you know their level of loyalty? How do you get them to complain? Why do you want to?
l) What is the 4-step process your sales and customer service representatives should be using to ensure complaints
or problems are resolved effectively and efficiently? What is the one question that always must be asked to be
successful in the eyes of the customer?
m) Do your people have appropriate training in quality tools and techniques and do they use them for problem-
solving, root cause analysis, prevention and process improvement?
n) How effective is your complaint/problem classification system and how do you keep it current?

12. o) How well do you restore the loyalty lost because of a problem or complaint with the use of your “recovery”
system?
Contact Centres
Over the years I have found that one of the most underutilised assets of most organisations is their contact centre unfortunately.
Too often the contact centre (or customer service activity) is viewed as strictly a “cost centre” and not as the”strategic asset” it really
is – providing an early warning of new or evolving customer requirements, differentiation/competitive advantage through service
excellence, competitive intelligence, the largest single source of real-time customer information in your organisation and a critical
success factor for enhancing your organisation’s agility just for starters. Need I say more?
Yet, for many years it was the case that most senior executives did not even know where their contact centre was physically located
– couldn’t find it if they had to, had never visited, had never listened in on customer calls or taken them (as required monthly at
AT&T Universal Card Services in Jacksonville, Florida or Xerox Head Office in Rochester, New York or the GE Answer Centre in
Louisville, Kentucky).
As a case in point, the GE Answer Centre takes in excess of 5 million calls per year or more. Where else in your organisation would
have the chance to connect with 13,000 customers per day? Why pay a market research company hundreds of thousands of dollars
for a sample of customers when you have your own? How often have you as a senior executive gone to your contact centre (help
desk, technical service activity, information line, etc.) and randomly selected a group of 6-10 representatives, gone in a room
together sat around a table in a non-threatening listening and learning mode then asked your people, “What is the customer
saying?” “What do they like or not like about our products, services, policies and so on?”, “What are they saying about
competition?” The list goes on. The fact is that in 30 minutes, one hour tops you can gain real time insight into your customers and
competition and a lot more. A very small investment for a very large return. Have each member of your Management Team take
their turn in the ‘tank’ so to speak – they’ll be better for it.
Yet how do your create an environment where your people have all the skills and knowledge they need, the information at their
fingertips, fun, passion, desire for excellence – being the best they can be, motivated or “switched on” and more? How do you
create the ultimate high performance centre which is able to track its value through customer referrals to retailers, distributors or
others who are on your list in ranked order according to their strategic importance to your organisation? The GE Answer Centre has
done this for years. It may be of interest to you that by integrating the Baldrige Performance Excellence criteria and the EFQM
Business Excellence criteria with 30 years of experience in what makes contact or call centres their best, you can find out the critical
requirements for superior performance. Soon on SlideShare I will put an article on Call Centres and performance management and
assessment tools I have developed over the years.
Another example is the Sony Information Centre in New Jersey. Every year when the engineers and designers begin thinking about
changes to consumer products they FIRST come to the Sony Information Centre. In their Centre, teams had been established and
“in-house” experts created to train others on the team by consumer product. Engineers would meet and ask agents what issues
customers were having with “user’s manuals” for example and make changes accordingly. Similar questions were asked regarding
the user friendliness or serviceability of consumer products.
Ok, so there are the top three ‘sensing processes’. How good are yours? Your contact centre can be your lifeline (or Life Boat to
quote Prof. Murphy of Manchester University) – use it effectively, you won’t be disappointed.
Here are the questions for you and the Management Committee:
a) Are you utilising your contact centre to create differentiation and give your organisation a competitive advantage?
If not why not and what can you do to make it so?
b) What competitive intelligence are you gaining through your contact centre?
c) What are the requirements related to Baldrige Performance Excellence or the EFQM Business Excellence criteria
for achieving a high performance contact centre?
d) What are the most important hiring criteria for selecting successful contact centre employees?
e) Do you know the Eight Pillars of Service Excellence – the eight factors which customers want more than anything
during their interactions with your organisation and are your people trained to deliver them? (Note: See my new
book, ‘The Wisdom Chronicles: Competing to Win’ now on Amazon. Chapter 4 has a discussion of these eight
critical factors under the topic of ‘value creation and delivery’.

13. f) How many contacts occur each day? How many leave the customer ‘breathless’ and panting for more because
they received a ‘wow’ experience? How many went the other way? How many are complaints and how many are
requests for information or something else?
g) How are you leveraging your contact centre internally for product, service, support, innovation or process
improvement?
h) When was the last time you as a senior executive visited your contact centre and talked informally with a sample
of agents to listen and learn about what your customers are saying? What other ways do you have in your
organisation of obtaining “real-time” market feedback?
i) How do you integrate the information you gain in your contact centre with complaint data and customer
satisfaction/loyalty data?
j) How do you assess the economic value which your contact centre adds to your organisation’s bottom-line?
The Seventh Deadly Sin:
“A failure to establish an integrated information architecture, infrastructure and use systematic approaches”
I won’t go into all the details on the effective design of an integrated information architecture or ‘sensing system’ here as that is
covered in detail in my new book, ‘The Wisdom Chronicles: Competing to Win’ available now on Amazon (see Chapter Five).
However, an organisation needs to be aware that such a system is a critical success factor for enabling your organisation to be agile
– to be able to make ‘optimal’ decisions at ‘hyper-speed’. How do I define agility? Probably different than most, but here goes:
“Agility is the capability of an organisation to identify, assess and act on market opportunities faster and better than competition”.
Three of the key elements of such as system consist of the information coming from your customer satisfaction and measurement
system (John Hancock Insurance in Boston was the first organisation to work with me in establishing such as system), complaints
management system and contact centre (help desk, information centre, technical support operation and so on).
Too often, for example, survey data is resident in the marketing department, complaints data (if a manufacturer) would be held by
the quality department and gobs of customer information would be resident in the contact or call centre databases. Yet the
managers of each of these departments would view their data independently and make decisions based upon it. There is no
attempt to cross-reference or cross-compare the information to confirm issues – their true scope and severity. Each department’s
database remains an “island of information” generating suboptimal decisions for the organisation as a whole even if it might be the
best decision for that department. You see this is where the “machine model (or Newtonian Model) of management” breaks down.
An organisation is NOT a machine – although you might like it to run like a well-oiled one. If you optimise each part or component of
an engine, the efficiency and output of the engine is enhanced (Honda and their core competency of small engine technology is a
prime example). However, if you look at the organizational chart of the typical company you see its components (little departmental
or functional boxes). The problem is that if you optimise each box, the whole system is suboptimised! Your organisation as a whole
is worse off! So why do it? Well the problem, as we know (although getting better over time) are the famous legacy systems which
were put in place years earlier to hold data. These systems don’t talk to one another making it excruciatingly difficult to cross-
compare data – much easier just to use your own system, your own database and make your own decisions – its faster and easier
and everyone knows they have less time to do more work anyway, so why bother trying to arrange time consuming meetings (and
when was the last time you heard of effective and efficient meetings taking place?). Hey it’s more fun and exciting to be a
firefighter, act like mice on a tread mill, headless chickens or blind squirrels searching for nuts isn’t it? Integrate!
What is best practice? Well again I would reference AT&T Universal Card Services and Nokia (you may go to the Baldrige website or
company website or the EFQM website and obtain short summary reports of what these organisations have done). At AT&T, for
example, they had a “Listening Post Council” (as a note, a “listening post is any key channel of customer or market information)
made up of a selected executives and middle managers from key functional areas. Each month actionable information (data which
had been analysed and interpreted by dedicated teams of people for each key data stream – complaints, customer satisfaction
surveys, contact centres and account visits) would review and integrate (connect the dots) on all the actionable information – see
the whole picture, not just pieces of the puzzle and set priorities for action for the organisation – monitoring progress and impact
regularly. In essence, what these two organisations and others I could mention had going for them was an “infrastructure” – a
group accountable for managing the strategic customer relationship management system of their organisation. You see, when
senior management says something dumb like “customer satisfaction is everyone’s job” that’s when things go pear-shaped or down
the toilet quickly. Why? Because everyone thinks customer satisfaction is being looked after by someone else – their colleagues for
example, so they don’t have to, besides they are thinking, “I am too busy and I don’t see where it appears in my key job elements for
performance appraisal anyway – so it’s not really my job even if senior management says so. Or they know that if they don’t
perform, they will get beat up much more for missing expense targets than customer satisfaction targets. The end result? No one is
looking after customer satisfaction!”

14. There are organisations like Thomson Consumer Electronics and Xerox that have also developed “early warning systems” or
“predictive models” that allow them to identify, in advance, a customer who is following a pattern that leads to defection with a
high probability. It allows them to intervene and manage (e.g., retention teams) the situation before the customer defects and take
meaningful steps to heal the relationship.
Here is a picture of the AT&T Universal Card Strategic Customer Relationship Management system at the time they won the
prestigious Malcolm Baldrige Award in Performance Excellence in 1992! After more than 22 years, this system still remains ‘world-
class’.
Systematic, integrated and comprehensive approaches like the above AT&T strategic customer relationship management system are
the foundation of the Baldrige Performance Excellence and the EFQM Business Excellence criteria. They are the opposite of informal,
ad hoc, inconsistent approaches which too many organisations seem to follow. The best way to illustrate is with Dr. Edward
Deming’s improvement cycle – which is not just an improvement cycle, but the path to a systematic approach. His cycle consists of 4
elements: plan, do, check and act. I prefer: plan, do/execute, measure and improve. As a part of daily work life – as a part of your
unconscious competence (see Peter Senge’s learning organisation) you should follow this cycle in ALL you do. Basically it says that
before you do anything, you must collect the data, analyse and interpret it to determine what should be done – the priorities, the
action plan (tasks, timing, responsibilities/accountabilities, interdependencies, potential barriers, review cycle) and the
establishment of the measures of success. Then you must execute as flawlessly as possible in accordance with the action plan. At
one time it was said that in the U.S. senior executives (who usually never consulted their own in-house experts – the ones below
them being most knowledgeable about the issue, but often ignored as ‘management knows best’) spent 25% of their time planning
and 75% executing – often failing to completely follow through because it took too long (they did not communicate well to staff, or
empower them or provide them the capability necessary or eliminate the internal barriers to success) and management often lost
patience, or the next “big idea” came along which senior management wanted to run after thinking it was the “silver bullet”, but
always quick to shoot first and ask questions after – blaming employees for failure of the planned activity. In Japan, where a
consensus is built, communication/participation/involvement at all levels occurs effectively, teamwork is nurtured, 75% of the time
is in planning and 25% of the time executing with a success ratio of 2-5 times better than in the U.S. or many companies in Europe
for that matter. Then you must measure the impact of what you are doing – monitor and have an early warning system in place to
tell you if you are running off plan. Based upon this you improve what you are doing – make mid-course corrections to maximise
positive impact for the organisation and in the marketplace.
Some organisations I have worked with such as Johnson and Johnson Bio-Technology were locked in a “do, do, do” mode ultimately
not reaching their full potential globally. Others I found locked in a “plan do” mode such as Huhtamaki, one of the world’s largest
manufacturers of disposable products (plastic and paper cups, containers). People don’t like measurement because it brings with it
accountability, so the “measure” component of the 4-step process just doesn’t happen or is not done well. I once remember sitting
with a re-engineering team at Allstate Insurance outside Chicago. They went on to describe in elaborate detail the benefits that

15. would accrue to the organisation as a result of their re-engineering efforts. I raised my hand and asked, “What’s in it for the
customer and how will you know or measure?” – they had no answer. Well, yes they did. “We will look at the measurement aspects
later”.
As one last illustration let’s use Duke Power the electric utility headquartered in Charlotte, North Carolina. They were using the
Baldrige criteria (as did First Union Bank, Johnson and Johnson, Boeing/McDonnell Douglas and many others) to drive internal
change and improvement. I met with the CEO, President and Management Committee of Duke Power. We did a role play. I put on
my Malcolm Baldrige Examiner hat (which I was) and asked them the following question: “What do each of you do every day to
communicate to your employees the importance of the customer to Duke Power?” There was dead silence! Uncomfortable silence
as a matter of fact! Finally Rick Priory, the President raised his hand and I called on him – anxious for anything I could get. He said
that he visited 100 customers this year (it was around November if I recall). I said that was great and wrote it on the flip chart.
There was one other rather feeble item that came up from one of the other executives and that was it out of 15 executives. I asked
Rick how many customers Duke Power had. He said they had some 6 million residential users, about 250, 000 SME’s and about 1000
large companies (by their standards). I then proceeded to see how systematic his approach was – again following Dr. Deming and
Baldrige. I asked Rick how he arrived at the number of 100. What data did he analyse and how did he analyse it to determine that
100 was the right number and that the 100 visits were, in fact, representative of the Duke Power customer base? Then I asked him
whether he used a consistent approach to the customer visits – you know, setting the agenda/questions in advance and sticking to
them? I asked him further if he wrote the feedback down or whether he just kept it in his head. Being mean, I further asked if he
shared his information with those in Duke Power who needed to know about the situations he discovered like any priorities for
immediate action. Lastly and to put him out of his misery and because he was about to start weeping I believe, I asked if he took
time to reflect on his visits during the year and then write down what improvements he thought would make the customer visitation
process more effective next year. I think you get the picture. He had taken a totally informal, ad hoc approach. Because Duke
Power hadn’t visited a specific account in a long time, he made the visit or because there were problems with the account, he made
the visit. Virtually no residential customers were included or SME’s – not very representative.
Here are the questions for you and the Management Committee:
a) How easy is it for your people to obtain a complete picture of the state of the relationship your organisation has
with its customers? Do you have islands of data/information or are your key databases connected and
data/information easily retrieved using user friendly systems and compared to obtain a complete picture of the
relationship?
b) How do you define “agility” and why should it be a critical success factor to your organisation? What is the most
critical factor which serves as a foundation of your organisation’s “agile and decision-making” capability? Do you
know? What do you have to become more “agile”? To make more ‘optimal’ decisions more frequently?
c) What infrastructure do you have in place to effectively and efficiently manage you customer relationship
management system? Why is it critical to have such an infrastructure, that is, what are the consequences of not
having one. Who is involved or should be involved as an integral part of this infrastructure? How often should
meetings occur?
d) Why do you need a customer information (CRM) IT system? How would you know if you were receiving a healthy
ROI on this system?
e) Do you know why a CRM IT System is only one part of a strategic customer relationship management system?
f) How do you keep your customer information database continuously refreshed?
g) How do you drive innovation in product, service, support, process and technology through the regular analysis and
interpretation of the data/information in your CRM IT system?
h) Is your approach to strategic customer management systematic? Which of the four steps from the Deming cycle
are the weakest, why and what are you doing or what can you do to strengthen it?
i) Why is it critical to use systematic approaches rather than ad hoc, informal and inconsistent approaches? What
are the consequences of using the latter?
My apologies if I have gone too far in the above – to the point where you are asking, “Who is this nut case anyway?” What I am
attempting to do is share my experience with you. I hope you find at least one nugget contained in the article which you can
immediately put to work to improve your approach or improve your organisation or the state of your customers. Let me know if you
do – I’m interested. Send me a message on LinkedIn to Dr. Ted Marra or use the email address given below.
The purpose of this last installment in the 7 Deadly Sins of Strategic Customer Relationship Management is to provide an overall
framework which has evolved from my work over nearly 40 years. The actual diagramme was developed specifically for strategic
discussions with Oracle and SAP regarding CRM IT software. Having worked with too many organisations around the globe such as
An Post in Dublin, Ireland who paid literally millions of Euros for a CRM System and having no clue what they were getting other than

16. the proverbial “silver bullet” and were even more clueless on how to obtain any return on their investment (that is why, by the way,
that the Gartner Group and others have shown research that 70% + of CRM implementations fail to meet senior management’s
expectations and therefore fail to add their espoused value). My point to SAP and Oracle was simply, “rather than simply peddling
as many CRM systems as possible and creating unrealistic expectations in the minds of senior management, why not take a higher
road – strategic selling and show how CRM IT systems are one critical component of an overall strategic customer relationship
management system”. But, as I was told by the Managing Director of Oracle at the time in the UK, “we simply take our marching
orders from Larry Ellison – he just wants sales of systems and wants us to use the U.S. model regardless of the cultural setting”. Yes,
things have changed for the better in this regard as I speak with members of the Oracle management team today I am pleased to
say.
So, having that as a little background, let's begin our journey shall we? You have all seen “cut away“ drawings – an automobile
engine cut in half exposing all it's working parts or the human body showing the muscle systems. So what would you see going on
inside a truly customer focused organisation? The above diagramme hopes to capture just that.
First, there is the culture – the “soil“ or perhaps the “soul“of the organisation. Without the proper soil and preparation of the soil,
one will not have the best crop (see Covey “preparing the soil“). There must be a deep abiding belief among senior management as
to the importance of the customer and their behaviours, priorities and decisions must clearly reflect just that to all people in the
organisation as well as the customers and other key stakholders.
This culture should influence the content of the vision and business plan and therefore the key business objectives of the
organisation ensuring that achievement of these key business objectives delivers values to customers and other key stakeholders.
The core purpose of the organisation should provide stability in turbulent times and the vision should act as a „litnus test“against
which all key business objectives must be tested to ensure their achievement brings the organisation one step closer to achievement
of its vision – the desired future state.
From the business plan and key business objectives should flow specific relationship strategies at least for all the most strategically
important consumer segments and key/major accounts. A “one size fits all“ strategy is a strategy doomed to failure!
The organisation must have “customer sensing processes“ (see AT&T above) to ensure the organisation exercises the best
judgement in making decisions – allocating resources, developing people and more. Primary among the sensing processes are
customer satisfaction measurement and management, complaints management and contact centres. The information flowing
continuously from these sources must be integrated, analysed and interpreted to make mid-course corrections as well as monitor
progress and impact, new emerging trends and changing requirements as well as competitive intelligence.
Where do we want the specific relationships strategies to have an impact? At the touch points – the customer engagement
processes whether sales, service or support. It is here that we want to give customers the “feel good feeling“. We want them to
see, hear, feel that something good is going on – something focused on them and designed to enhance their experience in doing
business with our organisation.
The continuous flow of information from the sensing processes should be captured in a strategic customer database or CRM IT
system – continuously updating the system, providing all appropriate information for effectively and efficiently building and

17. maintaining a loyal and even “secure“ customer base. Information from this CRM system should be continuously updated and
made available to all those in the organisation that need it. It should be utilised to feed into the HR systems of recognition, reward,
performance evaluation and career pathing. I know of what I speak here also because I have worked closely with a software
company in S.E. Asia designing a second generation CRM IT system.
Well, there we are, just a quick “journey“ and one which I hope will provide some useful insights. This chart above, as I have said,
has evolved over nearly 40 years of experience – it is NOT theory. It is the result of hands-on experience around the globe in over
155 organisations in 37 countries.
Dr. Ted Marra
Eye of the Eagle
doctorted47@gmail.com