Establish a Relationship with the Customer, Do Not Just Take an Order

Ensure a cure, don’t just take the medicine. Establish a relationship with the customer, don’t just take an order

Superficial actions will not do in this competitive market. All of us can take the medicine for our ailments, but the objective is to be cured. Every company can take an order, but at the end of the day, it aims to secure a loyal customer. This is why there is a Chinese saying, “ You can change the soup without changing the medicine.” The effect will not be efficacious. Sadly, sometimes we spend a lot of money on marketing, we know very little about our customers.

In the past, the target was to satisfy the customer. Today the ante has been raised and merely satisfying the customer is not good enough. The target is to gain loyal customer who will not switch to your competitor because of lower price, buy your products and services on a regular basis and even recommend you to other customers.

Consider research done by the Forum Corporation, which analyzes commercial customers lost by 14 major manufacturing and service companies. Some 15 percent of those who switched suppliers did so because they found a better product – based on technical measure of product quality, such as a greater mean time between failures or a lower defects rate. Another 15 percent took off because they found a “cheaper product” somewhere else. Twenty percent of the lost customers hightailed it because of the “lack of contact and individual attention” from the prior supplier; and 49 percent left because “contact from old supplier’s personnel was poor in quality.” It seems fair to collapse the last two categories into one, after which we could say: 15 percent left because of quality problems, 15 percent scooted because of price and 70 percent hit the road because they did not like the human side of doing business with the provider of the product or service. In other words, there was a problem with the relationship. Recent finding indicated that due to the dog-fight-dog competition, 65-85% of customers who leave for another supplier claim to have been satisfied. Thus merely satisfying customers is not good enough.

Relationships evolve through three distinct phases, and in each phase your role changes. You start as an expert for hire, this is how your client sees you when he first gets to know you. The crux is how to break out and develop a longer-term relationship. Next you become a steady supplier and get rewarded with a steady repeat business. However, you are still a vendor and certainly not part of your client’s inner circle. You should target to be your client’s extraordinary advisor and then possibly develop into a broad-based business advisor.

Successful companies also tend to create personal relationships with their customers. High-end hotels take copious notes about their frequent guests’ preferences, from the specific rooms they desire to the items stocked in the mini-bar. Successful online companies such as Amazon have used technology to create the same sort of personalized relationships. When you visit the Amazon Web site, you are greeted by name, reminded of your last transaction and presented with new recommendations that your profile suggests you might be interested in. Likewise, personal computers have increasingly become more personalised, even though the word-processing and Web-browsing programs are necessarily standardised. Increasingly users can download more options from free sites on the Internet. They can customise their computers with macro programs, sounds and other options.

Call centres are the rage today because companies recognise the need for customers to have front-line sales and support contacts. When the client perceives that you have helped him in some extraordinary way, the result is often loyalty.

Involve the customers in the decision-making. What better way to build customer loyalty than to have customers create an entire life around your product – whether virtual or real? Unfortunately, many companies fail to achieve this extreme differentiation from their competitors’ products. In fact, they move to quite the opposite direction, turning their product into a commodity. All too often, the result is that they become locked in a competitive price battle to the death. In such an environment, innovation is often stifled because it is either too costly as margins become razor thin or too risky because a wrong bet will surely sink the company.

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Dr Mike Teng (DBA, MBA, BEng, FIMechE, FIEE, CEng, PEng, FCMI, FCIM, SMCS) is the author of the best-selling business book “Corporate Turnaround: Nursing a sick company back to health”, in 2002. In 2006, he authored another book entitled, “Corporate Wellness: 101 Principles in Turnaround and Transformation.” Dr Teng is widely recognized as a turnaround CEO in Asia by the news media. He has 27 years of experience in corporate responsibilities in the Asia Pacific region. Of these, he held Chief Executive Officer’s positions for 17 years in multi-national, local and publicly listed companies. He led in the successful turnaround of several troubled companies. He is currently the Managing Director of a business advisory firm, Corporate Turnaround Centre Pte Ltd, (http://www.corporateturnaroundcentre.com) which assists companies on a fast track to financial performance. Dr Teng was the President of the Marketing Institute of Singapore (2000 – 2004), the national body representing some 5000 individual and corporate marketing professionals.