“The Value of Relationships in the New Economy”
There is a revolution going on all around us. It is a “customer revolution.” Customers are demanding more than ever before. Successful businesses, large and small, must find ways of satisfying these demands.In the past it was technology that transformed the marketplace. Today, customers are reshaping businesses and even industries. The value of your present customer relationships will determine the value of your company and it’s products and services. The feeling that a customer has when they interact with your brand will determine their loyalty. Together these make up your net worth in the “new customer economy.”In January, 2000, an astounding thing happened. America Online purchased Time Warner for $165 billion. While Time Warner had $28 billion in revenue, America Online had only $5 billion. How do you explain that? Did AOL have better technology? No! Did they have more capital assets? Heck no! With 28 million subscribers, Time Warner’s customers were “valued” at $3495 each. On the other hand AOL’s customers were valued at $7455 each. More than double!It is the quality of AOL’s customer relationships that drove up the value of the company.How do you join this revolution?
Become customer centered in everything you do. Become familiar with what your customers like about their interaction with your company. Find out what frustrates them. Measure what matters to them. Give customers what they want, not what you think they want. Look at the world through their eyes.Here’s some specific things you can do to strengthen your customer relationships and revolutionize your service:1. If at all possible, allow customers to try your product or service, BEFORE they buy. Today customers insist on freedom of choice. They don’t want to make a purchasing mistake. If they are disappointed, they will resent you and tell the world about it. On the other hand if you let them try it out, they will place a far higher value on the relationship.2. Offer your product or service-based solutions in more affordable, bite-size pieces. This gives customers the ability to experience the benefits without making a large investment or committing to an exclusive relationship.3. Give them access to real time information like availability, inventories, account balances and purchase history. With the Internet this is easy to do and quite cost effective.4. Offer various payment options like credit cards, automatic drafts, ACH, and Internet-based payment capabilities.5. Build a personal relationship with as many of your customers as possible, not just the 20% generating the 80% of your business.6. Conduct periodic (annual) client reviews. During these you should discuss benefits your company has provided during your relationship with the customer. Outline problems solved, issues for growth, and obstacles hindering progress. Also brainstorm with the customer how you can help them to achieve their goals and overcome their challenges.7. Don’t shy away from making commitments, but deliver what you promise. No questions asked!8. Establish a unique brand identity and stick to your core strategy. (See our last two Marketing Minute Updates for more information on these)9. Conduct surveys, perform focus groups and ask plenty of questions.