A customer is delighted to discover a new grocery delivery startup. He sends in suggestions he hopes will improve the service. In return he receives a stream of promotional emails. The customer feels ignored and cuts his order.
Despite an $11bn annual spend on customer relationship management (CRM) technology, businesses continue to alienate customers by failing to meet their needs and expectations, Jill Avery, Susan Fournier and John Wittenbraker write for Harvard Business Review.
The solution? Learn to categorise the relationships your customers are looking for, then give them exactly what they want.
LANGUAGE OF INTIMACY
Best friends, buddies, master-slave – the language of intimacy sounds strange when used to describe your company’s interactions with its customers. But understanding them in these terms is vital. Customers are long-term assets; overlook relational intelligence and you will alienate them and lose revenue.
From haircare to airlines, cars to the media, the authors analysed customer relationships across 200 brands spanning 11 industries in the US, China, Germany and Spain. They found 29 different types of customer relationship and believe you should build your business around them.
Customer relationships exist on a spectrum, with one-off interactions at one end and long-standing relationships at the other.
- Fling. Customer is looking for excitement and novelty. He or she is experimenting and wants a passionate interaction.
- Master-slave. Customer expects their every need to be met. This relationship is centred on the client’s sense of self-worth.
- Basic exchange. Loyal customer wants a good product at a reasonable price.
- Business partners. Customer wants to contribute ideas and suggestions to improve service and solve problems.
- Buddies. Customer wants a long-term relationship, but not an intimate one.
- Best friends. Customer expects a two-way conversation and a close, emotionally supportive relationship. Trust is important.
Harley Davidson is “best friends” with its customers. To nurture the relationship, the firm sends its own motorcycle enthusiasts out on the road for 280 days a year. Ambassadors and troubleshooters for the brand, they engage with the biking community through the Harley Owners’ Club. It’s a strategy that has seen the firm achieve double-digit growth every year for 20 years.
The watchmaker Swatch entices customers to enjoy a “fling” with its brand. In a strategy that turns traditional watch marketing on its head, the company’s design lab generates exciting, bold designs that change twice each year.
Different relationships deliver different revenue profiles. Harley Davidson’s best friends approach contributes to market share, but takes time and resources to build. Swatch’s “flings” are intense, fleeting interactions. They offer the opportunity for price premiums, but produce erratic returns and can be expensive to orchestrate.
The words people use when they talk about your brand are the big data source at the heart of your CRM strategy. Words like “love” and “loyal” indicate a marriage relationship; “addicted” or “obsessed” point to a dealer-addict dependency.
The stream of data that flows through your business in the form of customer emails, online chat sessions and phone conversations is one half of your data set; the other is social media.
Web crawling, data mining and the services of social media listening companies can help you capture and analyse the vocabulary people use to describe your brand.
Bring in the right staff to analyse CRM databases. Your company’s CRM strategy should be a “relational radar” calibrated to detect the different types of relationships your customers want to engage in. People with a background in psychology are better placed to extract the gold from the data than IT personnel or outside consultants.
The ability to identify negative interactions with customers is just as important as recognising patterns of positive engagement. Identify problem relationships (e.g. ex-friends, enemies, love-hate) and work to fix them.
GIVE CUSTOMERS WHAT THEY WANT
The grocery-delivery-service customer wanted to be a business partner, but the company treated him as though all he needed was a basic exchange or buddy relationship. It got the relationship wrong and suffered as a result.
Discover the kind of interaction your customers want and tailor your engagement to suit. In the above case the customer offers his services as an unpaid troubleshooter. That’s great news for any company because it helps improve services and profitability. If customers show they want to help, reward their input by offering them special status.
In the United States, TD Bank decided to re-engineer its service to recognise its customers as friends. Gone was the strict 5pm closing time and bolting the pens to tables.
Nurture relationships by making sure you meet your customers’ needs at every level, right through your organisation. Whether your customer wants to be treated like a best friend, is looking for a simple exchange relationship or wants you to meet their every desire, find the right degree of intimacy and watch your brand thrive.