Treating Customers Like Investors

March 14, 2009 on 2:15 pm | In Customer Service | Comments Off

I was listening to something recently and cannot presently recall exactly what, when, or where, but the words that stuck with me were that you did not want to treat customers like investors. The premise was that among your stakeholders, there are very different interests and you have to treat each stakeholder in a unique fashion. It stuck with me because I was pretty certain I did not agree. So I’ve taken some time to think about it and have come to the conclusion that I absolutely do NOT agree.

I can see that SOME investors may be differently motivated than SOME customers, and I would further agree that this can vary greatly depending on your industry and market. Even though I am the owner of a small business, I am also a consummate customer. I know how I like to be treated, and I can easily identify when I have not been treated in a manner that I would expect. There are certain customer service absolutes that many marketers still violate constantly, such as using an auto dialer so that there is no one on the calling end of the line when the recipient answers their phone, or having customers press one for English. When I think of customers, however, I have constantly used the ROTten principle (See my articles for a fuller description of this concept, borrowed from Bob Lewis at IT Solutions) in marketing which means, simply, Relationships Over Transactions. I don’t want to just “sell” you something. I want to become part of your business, understand your business, and share in your success. I want to build a relationship of trust. If I treat you solely as a revenue stream, or an interference with my day, then I am not building that relationship.

Relationships are funny things and come in all shapes and sizes – just like customers. Jeffrey Gitomer will tell you that you want to develop customers who will sing your praises. This goes beyond loyalty. What I have found about relationships, however, is that they are unquestionably an investment. It is not an investment of money, necessarily, but it is an emotional investment. You invite your customers to become emotionally involved in your success, just as you are in theirs. For many people, emotional investments are far more valuable than financial investments, and given today’s economy, might be the only currency they have left to invest. They are not looking for fair-weather friends. They are investors, and they have invested their most precious commodity with you. Not cash. Not money. Not even time. They have invested emotionally.

How have you treated these emotionally invested clients? Have you respected their investment? Have you treated as if it were your own? Have you tried to multiply that investment and show them a return on it? If not, I suggest that you are not treating your customers as you should. Re-think some of your policies, practices, or sales documents. How can you modify them to show more respect for their investment? I can assure you, it will pay handsome dividends.

Business Models in Today’s Economy

March 14, 2009 on 2:07 pm | In Getting Started | Comments Off

A business minded friend of mine and I had a discussion about a year or two ago concerning business plans. We both supported rationality in business planning, but we also admitted that sometimes the craziest of ideas works for a few. For example, we posited, if someone had come along a while back proposing to open a coffee shop on every conceivable corner of America, as well as every grocery store, Target store, book store, and about two dozen other store types, and…oh yeah….was going to charge $4.00 for a cup of coffee, we both would have kicked them out of our office and told them to get a brain before trying any business at all.

In that discussion we also talked about the dot com bubble that burst. What were these people thinking? How can you have a market cap in the billions when your own plan says that you will never make a dime? How can you continue selling vaporware to investors and not end up as Madoff’s cellmate? Who would pump millions into a black hole of zero assets? Ahh – the new market! Just wait and see.

And we have seen Starbucks, Amazon, EBay, and a very few others make many legitimate millionaires. But it seems to me that we are on the dawn of a new era. People aren’t paying $4.00 for that cup of coffee, or $6.00 for a few ounces of Cold Stone Creamery product. The businesses that cater to the elite are tanking fast. There are no more elite, it seems.

This suggests to me that my friend and I were right. You can ride a wave until it reaches shore, but they ALL reach shore eventually. There is really only one business model that works – one that uses assets to produce something of greater value. Whether it is a product or a service, you have no sustainability without some measurable value added. Fads must be capitalized on quickly. And you have to plan for the ultimate bust. They guy who developed the pet rock got rich. The guy who developed the hula hoop also got rich. And then it was over. When something seems too good to be true, it is said, it most certainly is. Sure, if you have “gotten in on the ground floor” you might have a 10% chance of hitting the wave at the right point in the curl. But you can’t bet the farm. And you have to plan for the next big wave. It seems to me that even among that 10% who make it by capitalizing on such a fad, eventually most (if not all) go bust for violating basic rules of business. And rule number one is, you can’t spend more than you make, which includes creating a massive infrastructure that cannot be sustained in down times. Ask the folks at Krispy Kremes. Or most anyone still left in Silicon Valley. Or read the so-called stimulus bill. Seems to me to be the same principle. Only a free market can reallocate assets sensibly. Central planners have failed every time they’ve tried. It’s not clear to me how this one is any different. I’m going to stick with the basics.

What do you think?

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