What I learned from my ‘relationship’ with Virgin

I did business with some folks from Virgin several years ago.  They were looking to redesign their brand (group) website, the company that I worked for (Blast Radius) won the business and as the Client Services Director for the UK, I became their account manager.  As a result of working with Virgin, I have become fond of Virgin,  I associate it with the following qualities: fun, warmth, friendliness, sense of humour, intelligence, straight talking, caring, humanity, hard work and professionalism. I stopped working with Virgin back in 2007.

Now how is it that I ended up associating these qualities with Virgin?  Is it because of their marketing communications? No.  Is it because of my experience as a customer?  No.  I did do business with Virgin, they had an ISP who I signed up with for broadband.  I found their welcome pack easy to understand and useful.  Yet, I did not develop a relationship with Virgin ISP nor the brand.  When the 12 month contract was up, I switched to another small and friendly ISP.  In my customer satisfaction did not lead to renewing the contract and thus being a ‘loyal customer’.

This weekend I was delighted to reconnect with a lady I hold in high regard.  Her name is Pooja Tanna and she was one of the three people that were my customers at Virgin.  I had been looking to reconnect with her for several years – in fact since she moved to M+S.  I had continued to make efforts to reconnect up with her, despite the fact that I had made several efforts over the last two years and had heard nothing back from her. Why did I not give up when I got no response from Pooja?

When I think of Pooja I think of fun, warmth, friendliness, sense of humour, intelligence, straight talking, caring, humanity, hard work and professionalism.  In short, it is the values that Pooja lived whilst I was  ‘her Client Services Director’ (her words) that I associate with Virgin. These values and behaviour are meaningful – attractive – in my world.

What I take away from this is that the personal – the human interaction – matters a great deal.  It is the human interaction that is the basis of relationship and the source of bonding and loyalty;  the role of technology is to play a supporting role – to enable great human interactions.  And any company that wants to create loyalty needs to make sure that they have great people like Pooja:  the front line staff are the brand ambassadors in the eyes of many customers.

The word ‘relationship’ has no place in the business world, let’s drop it

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.

On why organisations are reluctant to open up to customers

I read an article in the Telegraph today by the chaps who wrote the delightful Yes Minister and Yes Prime Minister tv series.  One part of the article – Yes Minister Sir Humphrey has all the solutions –  struck me as being highly relevant to the topic of opening up the enterprise to customers.  Here it is:

“From: Sir Humphrey Appleby

To: Bernard Woolley

Subject: Transparency

I understand your anxiety about the new government’s fixation on ”transparency’’, but you are distressing yourself unnecessarily. It afflicts all incoming administrations. It used to be called ”open government’’, and reflects the frustrations they felt when they were in opposition and could not find out what was going on, combined with an eagerness to discover and publicise the deception, distortions and disasters of their predecessors.

But it does not last beyond the first few months. As time passes they realise they have more to lose than to gain from public knowledge of what they are up to. Each month increases their tally of catastrophic misjudgments, pathetic deceptions, humiliating retreats and squalid compromises. They very soon come to understand that sound and effective government is only possible if people do not know what you are doing. The Freedom of Information Act was the greatest blow to firm and decisive administration since the execution of King Charles I. Quite soon our new masters will realise that secrecy may be the enemy of democracy, but it is the foundation of government.”

From the customer perspective transparency is great, for organisational leaders it does not look that attractive.  We all want to look good and avoid looking bad.

Every Customer Experience / CRM change agent should read this book

Any and every person involved in organisational life can benefit from reading this book.  It is a must read for anyone who is a change agent.  Everyone working on getting a better alignment between the customer and the organisation will benefit from reading and applying the insights of the book.

The book is written by Barry Oshry and it is called “Seeing Systems: unlocking the mysteries of organizatonal life“.

If all the people working on / impacted by Customer initiatives – Strategy, Insight, Experience, Engagement, CRM – read and applied the insights then I am confident that their organisation can save a lot to money, time, effort and heartache.

Incidentally Barry also has a blog: The Seeing Systems Blog

The critical flaw at the heart of modern customer relationship thinking

When I was working as a Senior Consultant with The Peppers & Rogers Group the customer paradigm was explained through the analogy of a small grocer (or florist) serving his/her local community.  The thrust of it was that the grocer got to know the customer- the person, his circumstances, his shopping history, his attitude, his values, his beliefs, his preferences – and used this knowledge to offer him the right products, at the right time, at the right price in the right way.  The end point – this is important – we have the technology to recreate that kind of business relationship with our customers.

What the analogy leaves out is the social context.  In days gone by the local grocer (or any other shopkeeper for that matter) was living in the same community as his customers.  He was likely to come across his customers in the social life of the local community.  Some of the customers used to be fellow students at school, others went to the same church, others frequented the same pub, others were friends of friends and so forth.

In short the grocer’s relationship with his customers was much a social one as an economic one; he experienced his customers as rounded multi-dimensional human beings not as one-dimensional economic objects nor as abstractions on a revenue statement. Because of the shared local context the customers also invested in the grocer – they knew the grocer in a rounded context and not just as an economic entity, a grocer.

Furthermore, the owner was also the CEO and the person having the daily contact with customers – listening, talking, interacting, serving customers.

That situation today for Mr Multi-National Enterprise (Mr MNE) is completely the opposite.  There is no social relationship between Mr MNE and the customer – they typically live and move in very different social circles.  The customers do not have to support Mr MNE (like they did with the grocer – else no local grocer) and Mr MNE can find other than local customers – the world is full of potential customers.  And importantly, Mr MNE is completely divorced from the customers – he never has to see, talk with or serve a customer.

So whilst the technology exists to gather information, the all-powerful social context that is necessary for building enduring mutual win-win relationships is absent.  And that is the critical failing at the heart of modern customer relationship thinking.  It misses the fact that relationship are a natural by-product of a social context.  That social context  is missing from the modern corporate world and it cannot be recreated in the typical tenure of the CEO.

Does power lead us to dehumanise our customers?

I read an article on how power leads us to dehumanise others and wondered is it as simple as that:

  • Is that why large organisations can come across as being scornful of their customers?
  • Does that explain the phenomenon of organisations becoming more and more disconnected and less and less respectful of their customers as they succeed and become established in the market place?
  • Does that explain why monopoly suppliers act as they do?

You can read the article here.

Incidentally, an infamous experiment was carried out by Zimbardo and his colleagues at Standford University – The Standford Prison Experiment – which suggested pretty much the same thing. You can find that here.

Why customer efforts tend not to deliver what the customer wants

Many large organisations have been soaked by the waves of CRM and Customer Experience.  Money has been spent on CRM software, teams have been set up to change processes, call centres have been outsourced or brought back in-house, CRM teams have been set up and some organisations even have Directors and VP’s of Customer Experience.

Yet the divide between what customers expect and what they experience when interacting with large organisations continues to be a large – customers are not satisfied.  Churn rates are high in industries where it is easy for customers to change supplier. And many CRM and Customer Experience team leaders are burnt out and/or have become cynical.

This got me thinking on why it is so hard for organisations to become customer centred.  Then I thought about it differently:  why do must CRM and Customer Experience teams struggle to make a significant impact on the quality of the experience that the customer receives? The answer is quite simple if we use a computer analogy.

The possibilities and limits of a computer system, in the final analysis, are set by the operating system; computers are simply pieces of metal or plastic without the operating system.  That means that we cannot take a software application such as Microsoft Word and make it run on a UNIX operating system – they are simply incompatible.  That is what is just so.  Microsoft Word has been designed to work with the Microsoft family of operating systems e.g. XP, Vista, Windows 7.

Now the funny thing is that I have never come across an instance when someone has attempted to run Microsoft Word on a UNIX platform.  Yet that happens all the time in the world of business.  That is what many organisations are doing when they attempt to impose CRM and Customer Experience programmes into / onto the organisation.

Organisations also have an operating system that primarily consists of strategic objectives, executive mindset, culture (what we consider to be important, how we do things around here), organisational structure (typically functional), business processes and the technology infrastructure.

Many, if not most, organisations are running operating systems that are simply incompatible with CRM and Customer Experience programmes.  These operating sytems are used to talking at the customer not listening to the customer; ‘changing/moulding’ the customer to meet the organisation’s needs not changing the organisation to meet the customer’s needs; treating all customers the same not treating different customers differently; focussing resource on conquesting new customers rather than doing the hard work of building sustainable relationships with existing customers and so forth.

Which is why most CRM and Customer Experience teams and initiatives struggle and many fail to deliver.