The edge 03_connecting with customers_27062008


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The edge 03_connecting with customers_27062008

  1. 1. YOUR FREE COPY Friday 27th June 2008 Connecting with customers In association with
  2. 2. II BUSINESS DAILY | FRIDAY, JUNE 27, 2008 the edge: connecting with customers QUOTABLE QUOTES Blue Ocean Strategy: How to OPENERS ”Coming together is a beginning. The book ‘Blue Ocean Strate e tary strategy. egy: How to Create Uncone e Even the vocabulary of compaf f Keeping together is tested Market Space and nies can be traced to the military progress. Make Competition Irrelevant’ has with words such as chief executive Working together is had a huge impact worldwide. “officers”, “headquarters”, “troops” Written by two INSEAD prof f and “frontline” often applied withf f success.” fessors, W. Chan Kim and Renée in the corporate milieu. The rule of - Henry Ford Mauborgne, it sold more than a strategy has been that to gain share million copies within its first year in a given market place you must take of publication and has been transf f something from the competitor. In lated into 39 languages, breaking other words, you win, they lose. This ”Customers don’t Harvard Publishing records as the is known as zerofsum gain. In this issue expect you to be perfect. They do fastest selling book in print. In the lead up to writing the egy, it is presumed that the structure is fixed – the environment and conf f In this traditional view of stratf f 4 Immigration Department reforms expect you to fix IDEAS @ WORK ditions are already determined and can our woeful public services ever please their long- things when they go INSeAD KNoWLeGe cannot be changed by the efforts of suffering customers? Kenya’s Immigration Depart- - a company. In academic terms this ment is making some remarkable strides in that direc- - wrong.” is known as the structuralist view tion - Donald Porter V.P., awardfwinning book, Kim and or environmental determinism. British Airways Mauborgne spent 15 years studyf f “Strategy thus becomes a question ing strategic moves by companies of outpacing rivals to gain a greater 5 Managing 10 million subscribers in more than 30 industries over a share from a limited economic pie,” Safaricom’s Michael Joseph believes both the lows period spanning from 1880 to 2000. Mauborgne says. “But when we and highs of providing customer service for nearly ten ”As far as customers Traditionally competition has been look at industry who do - million subscribers have given the mobile carrier valu- at the heart of corporate strategy we admire most? Those able key learnings that Kenyan companies across in- - are concerned you – country versus country, company who outpace rivals? dustries can grow and learn from. are the company. versus company, and even business Yes, we admire winf f This is not a school versus business school. ners. But more so, we The key question is usually how admire people who cref f burden, but the core 6 Is relationship marketing for all? can a company outdo its rivals? Comf f ate new paradigms, busif f For several years now, even before the Internet explo- - of your job. You petitive strategy and advantage were nesses and market spaces. sion, marketing has been evolving from a “transac- - hold in your hands born from Harvard Business School, These are what expand the tional” approach to a “relational” one, but is this the with the focus always on competif f pie of intellectual and creaf f the power to keep right approach for my business? tion. The fundamental roots of this tive wealth. In other words, customers coming view of strategy can be traced to milif f creating a nonfzero sum game.” back – perhaps even 13 Innovation is key to happy customers to make or break What sets great companies apart? SBS dean argues - that Apple, coca-cola, eABL are focusing on new prod- the company.” BOOK SHELF ucts to connect with changing consumer tastes and - Unknown stay ahead of the game bestselling 14 Farm to fork: How Kenchic is using traceability to assure its customers ”People books on customer service don’t want to The global crisis over Bird Flu pandemic forced the The best customer Best books for management of Kenya’s leading fast food chain to hit a communicate with service books customer retention brainwave that led them to adopting global standards an organization 1) Customer at the Crossroads: 1) euLoyalty: How to Keep Cusu u to assure millions of their customers that whatever or a computer. From Parable to Practice by tomers Coming Back to Your they put in their mouth is safe erick Harvey Website by ellen reid Smith They want to 2) Raving Fans: A Revolutionary 2) Customer Retention: An Inu u talk to a real, Approach to Customer Service tegrated Process for Keepu u 18 Connect marketing budgets to by Ken Blanchard ing your Best Customers by live, responsive, 3) Beans: Four Principles for Michael W. Lowenstein quarterly profit forecasts In this economic environment when corporate responsible person Running a Business in Good 3) Customer Satisfaction is Times or Bad by Leslie Yerkes Worthless, Customer Loyalty budgets are being squeezed, chief marketing officers who will listen 4) Lessons from the Nordstrom is Priceless, How to make are kept up at night by worry, trying to justify their and help them get Way: How Companies are Emu u them Love you, Keep You Comu u budgets, but they have to figure out how to show that ulating the #1 Customer Servu u ing Back and Tell Everyone value to skeptical ceos and cFos satisfaction.” ice Company by robert Spector They Know. By Jeffrey Gitomer - Theo Michelson, 5) Customers for Life: How to 4) The Loyalty Effect: The Hidden Turn That One Time Buyer into Force Behind Growth, Profits State Farm a lifelong Customer by carl and Lasting Value 20 The rise of multisensory branding Sewell 5) Customer Loyalty: How to The unique selling proposition is not considered the Insurance Earn It, How to Keep It by Jill 6 ) Love You, Keep you coming King, but creating a multi-sensory brand is gaining back and tell everyone they Griffin currency as a key to improving connections with con- - know by Jeffrey Gitomer sumers ”Don’t try to tell the customer what he wants. If you want to be smart, be chief executive officer Linus Gitahi editorial Director Wangethi Mwangi smart in the shower. Group Managing editor Joseph Odindo Managing editor Nick Wachira Then get out, go to consultant editor Sunny Bindra Advertising Manager Julie Kisaka work and serve the creative Director Kamau Wanyoike Layout & Design Conrad Karume Photo editor Joan Pereruan Illustrations Joseph Barasa customer!” - Gene Buckley, Sikorsky Aircraft Source: AMAZoN
  3. 3. FRIDAY, JUNE 27, 2008 | BUSINESS DAILY III the edge: connecting with customers capture uncontested market space FROM THE EDITORS ”If you want to be creative in your company, your career, your life, all it takes is one easy step… the extra one. When you encounter a familiar plan, you just ask one question: What ELSE could we do?” - Dale Dauten ”The single most important thing to remember about any enterprise is that there are Rediscovering no results inside its walls. the customer The result of a business is From the dawn of business history, a satisfied customer.” we know that the customer is king. - Peter Drucker Businesses exist to please customf f ers. That they also provide good careers for employees, and profit for investors, is incidenf f tal. No business can call itself great without ”I don’t know what your having a great bond with its customers. destiny will be, but one This issue of The Edge, your authoritaf f tive management knowledge series, will take thing I know: the ones you back to that primal issue: how do you among you who will be connect to customers? Is it through price, really happy are those location, quality f or none of the above? And how do you ensure that you build a bond with who have sought and your customers strong enough to weather found how to serve.” all storms? - Albert Schweitzer Kenyan business, for all its other accomf f This shift from winflose to regards industry structure as fixed and given. In plishments, has a problem in this regard. Cusf f a winfwin is the essence contrast, Blue Ocean Strategy is based on a ref f tomers are rarely treated as kings or queens of Kim and Mauborgne’s constructionist view of strategy whereby compaf f in these parts. Neglect, indifference and even Blue Ocean strategy. nies can shift the productivity frontier outwards ”If you don’t understand outright abuse are the more common experif f According to Kim and Mauborgne, by reconstructing market boundaries to create a ences inflicted on our customers. markets are made up of red and blue oceans. The bigger economic pie.” that you work for your Why should this be the case, and what red ocean represents the known market space The book gives practical examples and puts mislabelled subordinates, should we do about it? Who bonds well with where all the industries currently exist. forward conceptual tools as well as lays the unf f then you know nothing customers, and how do they do it? What is In this space all the boundaries are defined derpinnings for the reconstructionist theory. It the relationship between brand and customer and accepted, with companies trying to outperf f argues key to creating new market space is the of leadership. You know loyalty? How do you manage the skyfhigh form each other. However, as the market space simultaneous pursuit of differentiation and low only tyranny.” expectations of your customer base? becomes congested, the potential for profits and cost. That’s what allows a company to create a - Dee Hock, CEO To answer these questions, we have gathf f growth decrease. new value curve. For example, Cirque du Soleil ered a collection of minds, from thoughtful In contrast, blue oceans are untapped marf f eliminated animals and star performers from the Emertus Visa Int’l academics to handsfon practitioners in this ket space characterized by demand creation and show, which dropped its cost structure and created entertaining issue. opportunities for highly profitable growth. Kim an all new element of artistic dance and music to As a new development, we include some says “Blue Ocean Strategy goes beyond compef f achieve differentiation. interviews with some of Kenya’s leading busif f ”If you get everybody in tition by opening up a larger ‘pie.’ It challenges Kim and Mauborgne’s work is both “managef f ness people. These shed light on the daily the traditional structuralist view of strategy that rial and theoretical” and can be used at all levels: the company involved challenge of managing customers f and the in customer service, not interesting ways in which different compaf f nies are responding. RED OCEAN STRATEGY BLUE OCEAN STRATEGY only are they ‘feeling the Read this issue , and put the crown back Compete in existing market space Create uncontested market space customer’ but they’re also on your customer’s head! Beat the competition Make the competition irrelevant getting a feeling for what’s Focus on existing customers Focus on non-customers not working.” Exploit existing demand Create and capture new demand - Penny Handscomb NICK WACHIRA SUNNY BINDRA Make the value-cost tradeoff (create Break the value-cost tradeoff (Seek ManagIng EDITOR COnSUlTanT EDITOR greater value to customers at a higher cost greater value to customers and low cost or create reasonable value at a lower cost) simultaneously) ”Well done is better than Align the whole system of firm’s activities Align the whole system of a with its strategic choice of differentiation firm’s activities in pursuit of well said.” or low cost differentiation and low cost. - Benjamin Franklin
  4. 4. IV BUSINESS DAILY | FRIDAY, JUNE 27, 2008 the edge: connecting with customers ‘Madam, please go to counter three:’ Nyayo House has finally seen the light Can our woeful public services ever please their long-suffering customers? MWAURA KIMANI is pleasantly surprised to discover that Kenya’s formerly notorious Immigration Department is making remarkable strides in that direction and two months, while export certificaf f tion for goods, including perishables, takes between one week and a month. The survey classifies the work permit application process as one of the key obstacles to doing business in Kenya. The problem of delays and poor cusf f tomer service had pervaded virtually all Government offices, signifying the rot in public service delivery. This gave rise to the phenomenon of middlemen who got the documents done on behalf of the “clients,” but at a fee for themselves and the corrupt workers . The Immigration Department dealt with masses of paper. With rows and rows of shelves sagging under the weight of files and long, winding queues of waiting clients, there was need F or years, industrialists, foreign to have someone “trace a missing file”. investors and expatriates have Add to this the longftolerated misforf f complained of frustrations while tune of having to part with a “token” seeking services at the Immigration Def f for a file or passport to appear after bef f partment, which sometimes cost them ing declared untraceable and you had millions of shillings. offices few wanted to visit, except out To them, the hassle of acquiring visas, of extreme necessity. passports and work permits has been a key challenge that has complicated Unnecessary trips their businesses in the country––and Now, people seeking passports will be may temper the recent upsurge in the able to check their application status Kenyan economy. once an SMS tracking facility becomes Most point out missed investment operational later this year, sparing them opportunities, lost business earnings unnecessary trips to the Immigration and mistreatment by local officials, offices. thanks to sluggish operations at the f Currently, the official period for sef Nyayo House offices of the Immigraf f curing a passport is three weeks, but it tion Department. takes about three months in most casf f Now, however, many are in agreef f es to get hold of it once requirements ment that the registration mess that are met. had pervaded the office is slowly being The Immigration Department chargf f cleaned up. New efforts appear to be yan passport processed 21 days aff f to identify suspected terrorists, human es between Sh50,000 to Sh100,000 bearing fruit, seemingly ending this ter applying, thanks to the reforms. and drug traffickers and money launf f for visas and work permit processf f nightmare for both employees in and The department has in the past been laf f derers. ing depending on the permit class, the public they serve. belled the most corrupt public office in “Our intentions are to see that but foreigners who lodge their apf f This is after a raft of customer service Kenya, blighted by the existence of midf f customers get services within the plications through lawyers pay an reforms instituted since 2003. dlemen working in cohorts with some shortest time possible and under extra Sh50,000 in handling fees. A spotfcheck by the Business Daily corrupt immigration officers. very friendly circumstances because The Government last year issued 12,000 at Nyayo House revealed a more cusf f According to Transparency Interf f that is their right,” said Mr Kisombe. foreigners with work permits, the highf f tomerforiented approach by officers national (Kenya) Bribery Index 2007, Investors have in the past claimed it took est ever issued in a year. at the Department. Each of the more the department was ranked among the more than six months to process a work The Immigration department clearly than 20 counters, which previously went most corrupt. permit and that most of the time they has a long way to go, but it has made imff unmanned causing long queues, have Last year, the ministry pledged to isf f were being forced to pay huge sums of portant strides in placing its customer friendly staff serving the hundreds of sue passports within 20 days from the money in bribes to immigration officials back at the top of its priorities. customers visiting the offices daily. date of application as part of its Rapid to acquire the documents. This is a welcome development, and The customer hall is now fitted with Results Initiative (RRI). The East African Community shows that with the right will and backf f waiting areas where customers sit. A And now, the Government will next 2006/07 Business Index Survey launched ing, customer service throughout the novelty: officers roam around the hall month establish a population database this year says that getting a work permit public services can be transformed. MWAURA KIMANI is a pointing out to customers the right of all Kenyans and foreigners through in Kenya takes between one week and business writer with the counter at which to queue. which, according to Immigration PS a full year. Registering and getting a Business Daily. Now, it is possible to get a Kenf f Emmanuel Kisombe, it will be easier business licence takes between 11 days
  5. 5. FRIDAY, JUNE 27, 2008 | BUSINESS DAILY V the edge: connecting with customers How to keep 10m subscribers happy As far as running a complex sales organisation, Safaricom boss faces a big task. However, innovative solutions such as call centres and outsourcing are helping the mobile carrier stay ahead of the pack as competition hots up J ust over eight years ago, Mr Michael certain elements of customer care to inf f INDUSTRY STANDARD Joseph took over the leadership of crease callfhandling capacity. Safaricom, a fledgling mobile phone We are also profactively seeking ways to company owned by Telkom Kenya and his address the issues that customers call in for employer, Vodafone Plc . through alternative channels e.g. through Charged with turning a lossfmaking def f our extensive dealer network which comf f partment into a profitable standfalone busiff prises over 1,500 outlets all over Kenya. ness, Mr Joseph faced several challenges, However, having said this, customers including launching a GSM network after reaching our call centre representatives Kencell (now Celtel Kenya) had done it. are served efficiently, within an average of As part of Telkom Kenya, Safaricom had three and a half minutes, and within good enjoyed a monopoly and was infamous for quality standards. Currently, we have 232 overcharging and bad service. Safaricom customer care representatives (CCRs) dedf f has since grown to become the most instantf f icated to the Line 100, which equates to ly recognisable brand on the land. 50 per cent of our total staffing in the call From a starting point of about 20,000 centre. The call centre is open 24 hours a customers, the company now commands day, 365 days a year to assure our availabilf f about 10 million consumers. ity to all customers. The company today runs one of the bigf f gest and most sophisticated customer servf f But even so, last year you announced ice call centres. plans to start outsourcing the customer But even with this success story, critics Our retail centres, where our customf f customer care in a year? care facility. What progress has there are quick to point out that while the compaff ers can walk in for faceftofface service, are Our customer care touchfpoints are many, been on that front? ny’s brand profile has grown, its customer spread out across the country with six in including the call and retail centres spread Plans are almost complete to engage service is yet to reach worldfclass levels. Nairobi, two in Kisumu, three in Mombasa across the country. services of a partner who can deliver suf f For years, the firm has maintained that its and one in Nakuru. We are also offering Our highest spend goes to improving perior service to our customers. We are in customer service department is the single services in Kisumu and Eldoret via a Mof f the network, but customer care is the next the final stages of the evaluation process most important facet of its business. bile Bus. priority as we realise we are in the service and will be awarding the contract early next However, Mr Joseph believes both the We are also focusing on putting up adf f business. month. Setting up the new call centre will lows and highs of providing customer ditional centres in all major towns in Kenf f We value our customers and the cost take sometime, and we are therefore hopf f service to nearly 10 million customers has ya to become even more accessible to our to serve is commensurate to the size of the ing to begin services with this new partner given the mobile phone company valuable customers. Company. by July this year. learnings that Kenyan and international On average we spend just under Sh1 bilff companies across industries can grow and How important is the Customer Care depp lion annually to ensure we serve our cusf f learn from. partment to Safaricom’s operations and tomers effectively. Mr Joseph discussed with Business Daie e strategy? ly’s ICT beat reporter Kui Kinyanjui the Customer care is Safaricom’s main funcf f The customer care line (100) has highs and lows of managing a complex orf f tion as our customers are number one to p been cited as one of the most inacp ganisation and outlined a new strategy to Safaricom, and in fact, the only reason that cessible lines in the industry. Does finally make the customer the most imporf f we exist. it actually work? Can subscribers tant part of the most profitable company Our key aim is to provide convenient, actually get through? in Kenya. flexible and reliable services to all our cusf f Our customer service number for pref tomers. Our Customer care team is theref f paid subscribers via 100 is one of the How has your company’s relationship fore not only available to handle customer busiest in our company. with its customers changed over the queries and complaints, but to also receive Due to the exponential growth of our years? customer feedback on our products and subscriber numbers and given that this Our relationship with our services and to ensure that they meet exf f service is free of charge, we do indeed customers has altered, mostf f pectations. have some challenges in terms of customf f ly matching the growth of the We therefore ensure our staff are comf f ers being able to access it. We are fully aware company. prehensively and continuously trained of this challenge and are continuously The call centres have been and adequately equipped to manage our working to increase the accessif f working since the beginning needs. bility by significantly increasf f of our operations, and have Retaining and delighting our customers ing headcount and seeking since expanded to include is therefore our main objective in Safaricom. innovative technology to more customerffacing units As the major customerffacing unit of the increase our capacity. such as retail centres. company, the Customer Care Department Furtherf We have the call centres acf f forms the vital link between us and our cusf f more, we anf f Kui Kinyanjui is cessible via mobile phone and tomers. We therefore strive to continuously nounced a business writer which serve various needs of maintain contact with our customers, enf f o u r our customers. These include suring that they remain satisfied. plans with the Business dedicated lines for different to outf f Daily customer categories. Typically, how much do you spend on source Mr Joseph
  6. 6. VI BUSINESS DAILY | FRIDAY, JUNE 27, 2008 the edge: connecting with customers Is relationship marketing right for The answer, surprisingly, is not always ‘yes’. LLUIS G. RENART provides a useful framework to help answer the question F or several years now, even before the Internet explof f sion, marketing has been evolving from a “transactional” approach to a “relational” one. The transactional approach was appropriate in a world where: neither the supplier nor the customer have any memof f ry (they start from zero in every transaction); the customer is anonymous, or almost anonyf f mous; and every sale has to be profitable in its own right. In addition, if we lose a customer, there are plenty more potenf f tial customers in the market who will be easy to acquire f and doing so is cheap and easy. Essentially, companies launch products onto the market and customers buy them. Compaf f nies talk and customers listen. Products and advertising mesf f sages are massfproduced and undifferentiated. It gradually became apparent that this transactional approach is incapable of responding satf f isfactorily to the problems facf f ing marketers today. At the same time, new possibilities have emerged, especially in the field of IT and telecommunications, We must move away from the takes the initiative in makf f one another, and whether she value that each customer opening horizons for a new type s old ways of selling: Compas ing contact with the compaf f wishes to continue the relaf f has for the company over of marketing: relationship marf f nies launch, customers buy. ny, receiving and issuing comff tionship or terminate it. the course of the customer’s keting. Companies talk, customers munications, and initiating • Customer orientation. The entire estimated useful life. listen. transactions. emphasis is on a marketf f Why is relationship marf f What’s new about relations s • Actions are addressable and, ing and sales organisation keting becoming increasingly ship marketing? therefore, personalised. Comf f made up more of customer important? Because in today’s There may be nothing new about panies can address different managers than of product context of hyperfcompetition, it, for relationship marketing is messages and offer different managers. The company companies have found that it what small traders have always products or services to differf f must concentrate more on can cost up to five times more done: serving customers face to ent customers: precisely the consumers, their needs, and to identify and recruit a new face. But that is something most product or service that best the processes it uses to satisfy customer than it does to keep large companies stopped doing meets each individual cusf f those needs. an existing customer satisfied with the advent of the industrial tomer’s needs and circumf f • The emphasis is on “customer and loyal. Because products era and mass marketing. Now, stances. share” rather than “market are becoming increasingly unf f thanks to telecommunications • Memory. Each customer’s share”. differentiable, so companies systems, it is once again possiff identity, data, characteristics • The company must be willing are tending to differentiate Lluis G. RENART ble to conduct personalised ref f and preferences, and details to treat its most valued cusf f themselves more through the is Professor at IESE lationships on a mass scale, on of previous interactions with tomers differentially. This reff service that accompanies the Business School, an ongoing basis, and across that customer, are recorded quires sophisticated customf f product and the treatment the Barcelona. geographies. In other words, a in memory. er segmentation and classifif f customer receives. Consequentf f company can aspire to offer perff • Receptivity. Companies must cation, with different action ly, relatively small increases in He is a visiting sonalised service to thousands talk less and listen more. And plans for different types of customer loyalty may generate professor and member of customers anywhere in the they must let the customer customers. large improvements in the botf f of the advisory board, world, anytime. decide whether she wishes to • One of the main criteria for tom line. The main characteristics of maintain a relationship with discriminating between cusf f Strathmore Business relationship marketing are: the company or not, how the tomers is customer lifetime Is relationship marketing all School • Interactivity. The customer two will communicate with value, that is, the estimated wine and roses?
  7. 7. FRIDAY, JUNE 27, 2008 | BUSINESS DAILY VII the edge: connecting with customers my company? where it is difficult, costly or even imposf f Stage 6: Build loyalty sible to identify customers. At this stage, the company must assess its Stage 2: Inform and attract chances of turning satisfied customers At this stage, the aim is to assess how easy into loyal customers. In some industries, or difficult it will be for the company to and in some companies, the fact that a build awareness of itself and its products customer is satisfied with a particular or services, and also how attractive its product or service does not necessarily products are. mean she will repeat her purchase in the Often, a well established and well ref f future. In some products, such as wines, spected company may put this stage high consumers tend to show “polygamous on the scale if its products already have f loyalty”. In other words, they have a relf a substantial market share, even before atively long list of acceptable suppliers launching a relationship marketing stratf f whose products they will buy, dependf f egy. In other cases, the company may be ing on circumstances, momentary fancy, in a situation where informing and atf f special offers and promotions, etc. tracting potential customers is difficult, expensive, and uncertain. In that case, Stage 7: Develop this stage will be scored low. At this stage, the aim is to assess the exff tent to which, once a company has sold Stage 3: Sell a product or service to a customer and Here, the company must assess how easy the customer is satisfied and loyal, the or difficult it will be to turn an identified company is likely to find opportunities to and aware potential customer into an acf f extend and deepen its relationship with tual customer; in other words, how easy the customer. Insofar as a company sees or difficult it will be to close a first sale major opportunities to develop its relaf f with that customer or customer segment. tionships with satisfied and loyal customf f And then, how easy or difficult it will be ers, this stage will receive a high score. to get that customer to sign up to a relaf f tionship marketing programme. Stage 8: Opportunities to create a user community Stage 4: Serve In a community, a web of relational ties Once a sale has been made, the compaf f between customers, the company, and ny may find it easier or more difficult to its products and brands forms and grows serve that customer. For example, def f stronger. Direct links between customers livering a standard or massfproduced emerge and develop. Internet forums and product that customers buy in a store and chatfrooms mushroom. User clubs or fan take home with them may be very easy. clubs appear, in which people exchange But customers will be more difficult to knowledge, ideas and experiences of the serve if they demand that the product be product or service. Older customers volf f delivered to their homes. In some cases, unteer to teach and train new customf f the product may have to be installed, or ers. Markets are created for secondhand even adjusted and adapted to customf f products, or products complementary to ers’ particular needs. the main product, etc. Stage 5: Satisfy Final evaluation The aim at this stage is to assess how If a company is wondering whether or No, it isn’t. All that glitters is not gold. kinds of companies. Is relationship marf f easy or difficult it will be for the company not to design and implement a relationf f And not every company that tries to make keting “good” for all companies? Or is it to keep its customers satisfied with the ship marketing strategy, a good way to relationship marketing work for it is sucf f only to be recommended to some? product or service they have bought. A start would be to analyse each of the eight cessful. Relationship marketing is very In the rest of this article we shall try customer’s satisfaction usually depends stages just described and evaluate them interesting and attractive in theory. In to answer this question. on the degree to which the company sucf f on a scale of 0 to 10. practice, however, it is prone to difficulff ceeds in meeting, or even exceeding, the If the sum of the eight scores is over ties, or even rejection. The eight stages of relationship mars s expectations the customer had at the 40 and approaching 80 (the maximum), Two of the largest British supermarf f keting time of purchase. the company can be confident that it will ket chains (Asda and Safeway) recently My proposal is that a company that wishf f In some cases, companies are highly benefit from adopting a relationship chose to cancel their relationship marf f es to decide whether or not to design confident that their customers will be marketing strategy. Conversely, if the keting programmes. and implement a relationshipfmarketing reasonably satisfied. An example might total is less than 40, the company may Apparently, they came to the concluf f programme should organise its thoughts be companies selling upmarket cars or conclude that a relationship marketing sion that the costs of operating such a around the eight stages of the design and home appliances. strategy is unlikely to yield significant programme (which in the case of Safef f implementation process. In other cases, however, the degree of benefits in terms of turnover, margins way was around 60 million pounds a The eight stages of a relationship marketf f customer satisfaction may be unpredictf f or selling costs. year) outweighed the benefits. Safeway, ing process to be considered and evaluf f able, due to differences between customf f We have a long way to go before we instead spent the money on attractive ated are: ers, variability of the products or services can say that we have a reliable method price promotions and other marketing sold, or uncontrollable outside influencf f for determining how attractive a relaf f actions aimed more directly at boosting Stage 1: Identify es. For example, a long plane journey may tionship marketing strategy may be for customer satisfaction, and quickly saw At this stage, the aim is to assess how be a pleasure or a misery, depending on different companies. But the procedure an increase in sales and market share. easy or difficult it will be to identify the the passenger we happen to have sitting described in this article may be a first step All this suggests we should exercise universe of customers who would be next to us. toward explaining why relationship marf f Feedback caution with regard to relational marketf f the target of a relationshipfmarketing Consequently, if a company is reasonf f keting is not “right” for all companies, ing strategies and their supposed univerf f strategy. ably sure that a large proportion of cusf f and also why a relationship marketing Please send your com-- sal applicability. The assessment will be positive if the tomers will be satisfied with the prodf f strategy may be more or less attractive ments and observa- - A sensible way to start would be to company has already clearly identified uct or service, it will give a this stage a to a company that is considering implef f tions to ask whether the concept and practice of the target customers. Conversely, the high score. menting one. relationship marketing is suitable for all score for this stage will be low in cases
  8. 8. VIII BUSINESS DAILY | FRIDAY, JUNE 27, 2008 the edge: connecting with customers The magic of managing customer Relationships between sellers and buyers are all too often confrontational and immature. MIKE ELDON wonders why, and recommends a better way. S ome years ago, I was focused character, one whose asked to run a customf f eye is much more on making the er care event for the sale and pocketing the commisf f sales supervisors of a major sion, to being a consultant. vehicle distribution compaf f It’s not that consultants ny, one that sold everything don’t protect their interests or from motorbikes through those of their employers. But, cars to big trucks. A few days in a spirit of winfwin, they also before the workshop, I def f ensure their customers get a cided to go round their diff f good deal. ferent showrooms, posing Now the business of winfwin as a buyer. For I wanted to assumes a longer term view of see how I and they fared. selling. One’s ethics may well They were embarrassf f hold one back from making a ingly awful. I was appalled. sale today, or one may make Their universal disinterest a smaller or a less profitable in me was matched only one. by their ignorance of the But one meanwhile earns products they indifferently the trust and respect of the cusf f allowed their customers to tomer, who will be far more likef f buy. ly to return tomorrow. Indeed Even when it came to central to selling is the idea of multifmillionfshilling trucks building relationships, and cerff they hadn’t the slightest idea tainly when it comes to higher about their features, never value capital goods and servicf f mind the benefits of those es, the area where I have been features when compared to brought up. those of their competitors. Hence the concept of ‘acf f Having been brought up count management’, whereby in the fiercely competitive IT a longfterm relationship is asf f industry, I just couldn’t come sumed and time and other ref f to terms with how salespeof f sources are invested in nurturf f ple in my field put more eff f ing it. fort into selling a printer Not every purchaser apf f costing a few thousand preciates such an approach, shillings than the sofcalled mind you. Some prefer an arm’s salesman from this compaf f length relationship, where purf f ny applied to fumbling over chases are made transaction his highfend truck. by transaction, each with their I kicked off the workshop own tender. by asking the participants to Such people feel they get rate themselves on a scale of better value by constantly exf f one to 10 on how well they posing any incumbent supplif f cared for their customers. er to competition and keeping Their answers ranged from up the pressure on both quality six to eight, with no excepf f and cost. tions. I couldn’t believe it. For me these procurement And yet why not? Those who purists miss the point, subfopf f don’t know what they don’t timising around least cost per know often imagine they’re transaction. doing pretty well. But they are far from uncomff This was when vendors, mon and it’s really hard to exf f of vehicles as much as comf f “I win, you lose” is a common ats s than their transportation counf f were looking for. plain to them, in all their selff puters, were restricted in titude in selling. terparts. It sounds rather obvious, righteousness, exactly what it is what they could bring in to I advised these motoring but even in these days of infiff that they are missing out on. For Kenya, having to obtain both merchants to learn so much nitely fiercer competition the the supplier, forced to act as a MIKE ELDON is import licences and foreign more about their products and salesperson who follows this provider of a commodity where now a consultant, exchange allocations. Def f what was good about them; to selffevident path is more the only cost minimisation matters, mand greatly exceeded supf f learn everything they could exception than the rule. draws back, many of his highest after a long career as ply in each case, but somef f about competing products; and It is by going down this path value resources unutilised. an executive in the IT how computer people still to relate what their products off f that one graduates from being How refreshing therefore industry. had to sweat infinitely more fered to what their customers a productffocused and vendorf that over the last few years a
  9. 9. IX FRIDAY, JUNE 27, 2008 | BUSINESS DAILY the edge: connecting with customers expectations A car showroom: “Even when it came to multismillionsshilling vehicles they hadn’t the slightest idea about their features, never mind the benefits of those features when compared reaction has set in to this trend. A good customer in time to meet a very tight We used to fight all the time before that of how a customer treats a vendor, but number of major procurers, including deadline. It’s winter in America, and (for inevitably some unforeseen probf f after so many years of taking knocks here in Kenya, have been rationalising the snow is falling. Everyone’s nervous, lem cropped up, or he got stuck in traff f from my customers I do have a request their suppliers, reducing them to a manf f supplier and customer alike. So what do fic as he was bringing the vehicle back to make of those who confront supplif f ageable number of competent, reputable the good people of IBM do? They keep to me) but now we’re the best of friends. ers with unrelenting aggression. There ones with whom they wish to engage in communicating. As Tom Peters puts it, He’s thanked me several times for havf f is that kind of macho client who feels closer longerfterm relations. Anathema they overfcommunicate, updating the ing introduced him to this magic, and I’d that unless they are forever bashing their to the arm’sflength brigade, these folk customer at regular and predictable inf f like to think that all his customers have suppliers they’ll go soft. talk unabashedly about viewing their tervals until the truck, against all odds, benefited from his newffound commuf f There’s really no need to see your venf f suppliers as partners. And that, to the arrives. nications skills. dor as an adversary, as an unmitigated ‘consultant’ type of valuefadd vendor, is Of all the advice that I have given over Related to this phenomenon, when rogue. No wonder some salespeople bef f music to our ears. the years to customerffacing people, the one is dealing with a larger organisation, come inhibited, and retreat into a kind For salespeople who have been accusf f one I have hammered most often is to where there are several layers of managef f of soulfless ‘professionalism’ as a way of tomed to selling products rather than sof f overfcommunicate. I should also add that ment, I have found that it is prudent for protecting themselves. lutions though, for those who churn out it is a source of great sadness to me that the vendor to take the escalation initiaf f minimalist quotes rather than thoughtf f very few, pitifully few, have ever taken tive when a problem rears its ugly head. Timid operators ful, reasoned proposals, this is definitely my advice. It’s very much in their interest for engiff But, I sat to such timid operators, you territory ‘beyond the ten’. And as I have They have suffered the consequencf f neers or a salespeople to alert their own must go beyond the logical to the psyf f found over the years it is very hard to es, of gratuitously dissatisfied customf f bosses earlier rather than later in such chological. You must reach out to your truly convert such people to become valf f ers, but this has never seemed to make a situations. customer at a social and emotional levff uefadd consultants, professionals who difference. They’ve kept on doing what And the boss should think about conf f el, and help them assume a relationship will be respected for their knowledge and they’ve always done… so they’ve kept on tacting his or her counterpart to hear between two mature, solutionforiented their judgement. But it’s fun trying! getting what they’ve always got: anger from the vendor before they do so from adults who respect each other, and who instead of understanding. their own people (not infrequently with assume that mutual benefit will emerge Generate delight It’s possible that before I slip away appropriate spin applied). It takes guts, from working together. Yes, together. As I look back over all my years in this into some salesman’s heaven someone but it pays dividends. Tom Peters published his Passion for kind of selling environment, both in Aff f will explain to me why hardly anyone The beauty of this kind of bold and Excellence over twenty years ago, but rica and in Europe, I long ago concluded takes such advice to heart, but I doubt it. caring behaviour is that once you make what he wrote is as powerful today . Let that one of the most powerful – and easiff I have just come to accept this masochisf f it a normal part of how you operate you no one imagine that Peters was the one est – ways of generating customer def f tic blind spot as a missing circuit in the reach a point where you expect to be able who invented the idea of taking care of light is to manage expectations with great make up of most human beings. to turn a crisis into an opportunity. Every one’s customers. diligence. Most customerffacing people I know how much good the discovf f vendor faces problems. There were surely great experts in (whether their customers are internal ery of ‘overfcommunication’ has done Customers, whatever they may say, customer care in ancient times – and or external) are awful, appalling, zero at me. Most customers can live with a delay do expect that. But if you perform well they may well have been in a minority this. You’d think it was so sophisticated, or a problem of some kind if they know in solving these problems (and a good then too. They certainly are today. But so complex, so time consuming. about it in good time. But if it comes as part of this lies in expectations managef f I’ve always wondered why. No one has written more forcefully or a surprise they go wild. I do, and I think ment, and at all the relevant levels) you convincingly about expectations manf f I’m quite normal. can readily develop your relationship to agement than Tom Peters, in his Passion Happily, I did manage to convince the a higher level than where it would have for Excellence. excellent mechanic who takes care of my been had the problem not occurred in He tells us about the shipment of IBM car that it is in his interest to practice the first place. More magic. computers that was being rushed to a good expectations management with me. Forgive me if I revert to the question