The word ‘relationship’ has caused and continues to cause lots of muddled thinking when it comes to the world of Customer (strategy, insight, experience, engagement, CRM and so forth).
The conversation around ‘relationship’ reminds me of my days in the field of Business Process Re-engineering (BPR). To some people it meant focusing on the work that creates value for customer and cutting out work that did not add value. To others it was a way of speeding up process cycle time by dealing with bottlenecks. For many it was code for making roles redundant and cutting operating costs. And so forth.
The word and concept ‘relationship’ has arisen and is most useful in a social context: human beings dealing with human beings. If we take a look at the dictionary we find the following definitions and usages of ‘relationship’:
- a relation between people – “the relationship between mothers and their children”;
- a state of connectedness between people (especially an emotional connection);
- a state involving mutual dealings between people or parties or countries
- kinship: (anthropology) relatedness or connection by blood or marriage or adoption
The definition stresses kinship, human relations, connectedness between people – especially an emotional connection. This is what most of us intuitively and instinctively think when we think of relationship: a human to human connection with emotional charge – positive or negative. And we have learned this by being embedded in a social context.
To apply the social concept of ‘relationship’ to an organisational – economic, mercantile – context is simply muddying the waters; comparing apples with oranges leads only to confusion.
In a business context ‘relationship’ means – at best – mutual dealings between the customer and the business. There is not and can never be a kinship or any kind of kinship (e.g. friendship) between the customer (a human being) and an abstraction (the company). So lets take a look at what kind of ‘mutual dealing’ business leaders (Tops) typically want, aim for and prefer.
In my experience, when Tops talk about building ‘relationships’ they are talking about taking out the hassle, pain and cost of doing business with customers. Specifically, the organisation’s hassle, pain and cost. For example the Tops want:
- to have to sell once and only once as the marketing and sales process tends to be costly and can be time-consuming;
- customers to pull (buy) more categories of products (“x-sell”) such that the organisation’s cost of sale approaches zero;
- to reduce the costs of delivering on the promise made to the customer; and
- to reduce the costs of interacting with customers and building goodwill – the customer service costs whether these sit in sales, account management or the customer services function.
Put differently in the world of Tops ‘relationship’ stands for economic outcomes: revenues, revenue growth, lower operating costs, higher profits and higher profit margins as well as an easier life: there is always too much that needs to be done and not enough people or time to do it so ‘every little counts’.
Notice the one-sided nature of this way of viewing the world: how to get what we want out of our customers. Rare is an organisation where the Tops make the same investment in figuring out how to deal with the customer’s hassle, pain and cost. For example Telco’s have the information needed to put each customer on the best plan for him/her. Nonetheless, this not done. Why? The short-term loss – revenues, profit margins, profits – is sitting right there in the room; the longer term benefit in terms of customer loyalty is uncertain – a promise, a ghost. Put differently, the Tops are not willing to invest in their customers.
Do all organisations behave this way? No. Do many or even most organisations think and act this way? Yes. Nonetheless, we should not be too harsh or cynical about organisations speaking about ‘relationships’ yet failing to treat their customers well. For many organisations that has never been in the game plan – that is simply not what they mean by ‘relationship; many Tops simply do not have the luxury of moving from a short-term orientation to a long-term orientation – only owners of private companies have that luxury.
Organisations and Tops would serve their interests best if they simple did not use the word ‘relationship’. By using this word organisations are setting expectations that they are not up for delivering and will not deliver. And they are leaving themselves open to charges of spin, of misrepresentation, of dishonesty – from customers, from employees, from the media. Furthermore, they are setting the stage for ever greater customer dissatisfaction: some customers take ‘relationship’ to mean that they will be treated better, that they can expect the organisation to listen to them and to change its behaviour to accommodate their needs.
My advice is this: if you are serious about doing better by your customers then focus on creating value for customers. Talk about what customers can expect from you not about ‘relationship’, set service standards in customer terms, offer guarantees and live by your word – honour your promises. One example that comes to mind is the guarantee that Hyundai made in the US market when the car market was in a dive and customers were anxious about their financial prospects.