Are your customers commodities?


As a customer, you can tell when a business begins to think of you as a commodity. All of a sudden, you are in and out - less talk, less transaction time. What does this mean? What should you do?

A friend of mine told me of a favorite vacation spot that his family had visited many times over the years. He had become friends with the owners. During his last visit, he noticed the customer service just wasn't what it had been in the past. He felt rushed and neglected. When he expressed his concern, the response was, "You've been here before. It's not like this is something new to you."  

When loyal customers begin to have this experience, it means the business has entered a transition point. We know this because what we are doing is getting harder, or our results are not what they were. A transition point can be good or problematic. It can have internal or external reasons. Whatever it is, you must understand it and act. Whether, it marks a decline or new opportunities, you must act.

The choice is not between changing or not changing. The only choice is what kind of changes do I make?

Change is necessary to sustain the loyalty and good will that long term customers have for a business. 

When your customers become commodities, as a number lacking any history or distinctive relationship to the company, just the next transaction, you have determined a new course for your business.

You may think that this is a rational business decision. It is also a decision to change the value structure of your business.

Long term customers don't bring their business to you because you have the lowest prices, unless that is your business. They come because you stand for something that is validated every time they encounter you. It doesn't really matter what those values are. It does matter that you know what they are, and that they matter to you.

Losing loyal customers marks a transition point. It is a change that matters. What are the implications?

In the past, you may have been able to charge a premium for your services because of your relationship to the customer adds value to the produce or service. Now, you are transitioning into the commodity business. You have to lower your fees to find customers. And those customers are not like your loyal ones. They are only interested in price and availability.

  Transition Point - without Title

This is what happens at transition points. We make some seemingly innocent, rational decision, and do not see the unintended consequences.

Dealing with change is rarely rational and orderly. It is disruptive and disorienting. We have to learn how to see the tell-tale signs of transition and act to either reverse the trend or capitalize on it.

For my friend, he may return to this vacation spot one more time, giving his owner friend a second chance to show that he values his friendship and loyalty over the years. He'll go with a critical eye to see how he is treated. And there if has been no improvement, he may just move on to a new vacation spot next year.

No one wants to be treated as a commodity.

Real Life Leadership: To keep your customers happy, it is important to treat them like guests

This week's Real Life Leadership - To keep your customers happy, it is important to treat them like guests - is online.

In this column, I return to the theme Hostmanship that I wrote a lot on last year. Through this link, you can find all the various pieces, including a link to my review of Jan Gunnarsson and Olle Blohm's great little book, Hostmanship: the art of making people feel welcome.

Seems fitting that on the week when my Johnny Bunko Challenge 7th lesson - Say, Thanks, every day - is announced as a finalist in the contest, that I'm also writing about Hostmanship.

The underlying purpose of the column is to introduce our local writers to Bill Kelley who heads the talent devleopment operation at the Grove Park Inn Resort and Spa.  Bill is one of our Lessons In Leadership workshop presenters on January 20.  Bill spoke at last January's event. He's smart about how leaders develop their employees to understand how to act as host to the Inn's guests. When he first heard about Hostmanship last year in my columns, he found an idea that he was already employing in his work for the Grove Park Inn.  If you are close by Asheville on January 20, register for our leadership event. It is going to be quite special.

One additional word about making people feel welcome. I believe this is a game-changing mindset during hard economic times. Hardship is an emotional experience. It is disorienting, frustrating, scary and very possibly isolating. To know that this person or that company understands can make the difference between survival now and thriving in the future. 

Let me suggest that you download the free review of Hostmanship that I did, and read it.  Pass it around the office. Schedule a lunch together, order in, and talk about how this idea could impact your business.

 It could be said that Hostmanship begins in the home, or at least the office. If we treat one another as guests, then our business' guests will find a welcoming, distinctive place to bring their business.

Thanks for reading.You can download a hard copy of the column here. Thanks.

Building Deep, Lasting Client Friendships

Spike at Brains On Fire writes about the differences in relationships online and offline as it relates to brands and social network sites. He's pointing to a report from England that shows that personal interaction, face-to-face, is the way to develop real friendships.

From my experience this is correct.  It is difficult to manage more than a hand-full of close relationships. At some point, the relationship becomes an acquaintance focused on one area of intense interest and multiple side ones.

Spike has a couple points to make that are worth hearing.

Now let me take it one step further and apply this to brands getting involved in online social networking sites. For a lot of them, it’s a numbers game. “How many people can we get to be “fans” on our Facebook page or friends on our MySpace page?” But these are mere acquaintances with the hope of maybe, somehow driving transactions. There’s no intent for a real, deep, relationship.
Now I’m not saying in any way that you shouldn’t be concerned with an online strategy. But what you should be concerned with is how that online strategy can drive OFFline conversations. OFFline gatherings. OFFline relationships with employees and fans. Online fundamentally needs to support OFFline and offline needs to support online. They work together. And any company that tells you to put all your eggs in the online basket will get you plenty of acquaintances. But not many meaningful relationships.

I totally agree. However, let's put this in the context that I'm hearing about everyday.

How does this matter when the economy is in the tank and no one is doing business? 

Everyday I'm hearing people talk to me about how their business is off, way off in some cases. One friend told me he knows he'll get through, but what about his team?  How can he hold onto them if there is so little work?

What we will find during this recession is that the strength of our client base is determined by the strength of our client relationships.

Today, we have to make a clear commitment to our clients. It has to be demonstrated in action, not simply in words or comments on Facebook.

Here's a simple example.  Yesterday, over lunch I learned that a program at a university in another state where I've done some work is facing, like the rest of the institution, the possibility of a very serious round of budget cuts.  I decided listening to my friend that I had to demonstrate my commitment to the program, its director, to the community board that works with her, and to the university by sending them a financial donation. Do I have a lot of discretionary cash lying around? No. And the contribution wasn't large, either. But I am committed to this program, and this is one way I can demonstrate it.

How do we demonstrate our commitment to clients and customers when things are hard for them?

Sacrificial commitment is a core element of every deep and lasting friendship. There is virtually no sacrificial commitment that happens online. It is more than a question of trust.  It is a question of commitment.

Do my clients, present and past, know that I'm committed to doing whatever I can to help them through difficult times. Or, do they think I'm there just to deliver services and pick up a check?

Spike writes,

A real relationship is about personal investment and sacrifice. To you, the individual, I ask how many companies that you have a relationship with will really be there for you when you need them. And for you, the brands, I ask, how many fans do you have that will do the same?

Yes, this is what a real relationship is about. It isn't primarily about what you share in common, but rather what you are willing to give up in order to sustain the friendship.

Right now, today, is the best time I know to demonstrate the value of our products and services. We do it by demonstrating our commitment to them as their client or customer. If they see our actions as a sales tactic, then we've not shown them our genuine commitment. And it could well be because we are not really that committed to them.

Here's what you can do today. Prepare a list of your clients from the past two years.  As in my case, there are clients who have not heard from me in several months because our projects finished.  Get back in touch with them, just to see how they are doing. If they are local, take them to lunch. Talk about how each other are dealing with the current business climate. It can be an important first step toward deepening a client relationships that can last a long time.

Customer Relationships in Hard Times


How are you handling your interactions with clients / customers?

Right now you are demonstrating to them the reason why they buy from you. You are earning their loyalty and continued business.

However, if you are captured by your own fear of the future, whether it is fear of not being able to pay bills, not having a job, or not being able hold onto your employees, you have to manage your fear so that it does not become the central feature of your relationship with customers.

Now is the time to go further with them than you ordinarily would. Treat your customers as friends. What do you do when a friend is in trouble? You pitch in and help him or her out.

Even if your business is suffering, you cannot entertain the notion that you are a victim of bad times. You have to discipline yourself to believe and help your customers to believe that your future is dependent upon what you will do today. Build strength in those relationships, and when we come out of this mess, the relationship that you have with those customers will be there.

Don't let fear be your primary emotion. Turn off the TV if you have to do so. Reread books that inspired you to become the person you are today. Do whatever it takes to elevate your daily performance to counter the challenges that you are facing. Do so, and your customers will find you the strength in the storm that they need.

Real Life Leadership: The first rule of training is to be a good example

My latest Real Life Leadership column - The first rule of training is to be a good example - is online.  The question comes from Pete Gonzalez who wrote me about the training he does. Having done training of the sort that he is doing, I understand the challenges that he has.

Pete wants to help his co-workers improve their relationships with one another. Especially in the inter-3DMissionValuesVisionpersonal dimension of an organization, we have to look at the larger picture to understand what we need to do. I told Pete in an email response that the issue isn't how to train them to treat one another as Customer #1, but rather leadership. I touch on this in the column.

Here's more of what I see.

Leadership is a function of the three dimensions of Ideas, Relationships and Organizational Structure. This is a global view of leadership. The larger picture that shows the broad categories that every leader must address if they are going to be effective.

What I find is that each dimension may be addressed by leaders, but not in a coordinate way. Taking Pete's question that I wrote about in the column, let's see how this works.

There are several ideas floating around the customer service world that are really not about customer service, but about the Relationship dimension. Let's say that in theory, customer service is meeting the needs and expectations of the customer. If my need is to have my watch battery replaced, I want my battery replaced. As the customer, this is what customer service exists to provide me. However, if I'm treated like I don't matter, the customer service "relationship" has hurt the company's ability to provide good customer service.

I am making a distinction between customer service and the relationship that customers have with the service provider. 

The service operation to the customer is a function of the Organizational Structure. It is a set of business processes that the company organizes to achieve a specific purpose to fulfill its mission. For many companies that service is accomplished without a personal relationship. For example, when I buy a book from, I never "interact" with a real person. It is all an online software application function.

I make this distinction between the service provided and the relationship because it allows for specific ways for improving both.  This is something leaders need to understand. Now back to Pete's problem.

In his email to me he makes the comment that in his company people treat one another with disdain. Pretty strong words. As a customer service trainer, Pete is thinking how within his specific area of responsibility can he make a difference.

Pete, and others, this is precisely the kind of leadership thinking we need in business. You are not treating customer service as simply a function of the organizational structure. You are seeking to integrate that organizational function with the relationship dimension. This strengthens the value of what you do for the company. If you are able to improve the collaborative interaction of co-workers, it does flow out to your company's customers. The question comes back to how do I do this so they "get it."

Smart customer service providers understand that you have to discern what exactly the customer wants.  This discernment is a function of good communication skills. I view communication as a part of the Ideas dimension. In our interactions with people, we send all sorts of signals to one another. Some are clear - "I need a watch battery." Others are not, "I'm in a hurry."  A good customer service provider will discern the context that the customer is in.  It is an intuitive ability that comes from good training, good listening and interaction skills and a clear understanding of the goal of customer service. This goal is a function of the mission of the company which is derived from the Ideas dimension.

My question to Pete is whether there is clarity in the link between the customer service function of the organizational structure, the relationship dimension and the mission of the company. 

Is customer service clearly linked to the mission of the company?  In the diagram above, you'll see that Mission is the linkage between the Ideas dimension and the Organizational Structure. A mission is simply an idea until it becomes tangibly organized as a structure of business processes.

Is there a clear link between the mission of the company and its people. As the diagram shows, the values of the company are what connect the mission of the company to the people and their interactions with one another and customers.

As a result, a Vision that links all this together is an understanding of the Impact that "these people working in collaborative interaction" can have working within "this specific organizational structure" to achieve "the company's mission."

In Pete's situation, the key is for the leadership of the company to understand that the functioning of their business is not simply a matter of business processes and profit & loss figures. It is understanding that when human interaction is healthy, business processes that serve the customer will function at a higher level of performance. 

Leadership is not easy work. It is harder work when leaders fail to understand that they have to see the big picture of the Three Dimensions of Leadership in dynamic interaction all the time. This is the challenge we all have, regardless of the role we have, in creating leadership impact.

You can download a hard copy of the column here.

Real Life Leadership: Hostmanship is more of an attitude than a sales technique, and it works

My latest Real Life Leadership column - Hostmanship is more of an attitude than a sales technique, and it works - is online.

Back in May, when I wrote a review of Jan Gunarsson and Olle Blohm's book Hostmanship, and then wrote a column on it, little did I know that it would lead to another column , and finally to today's column

Tom Taylor at BB Barns was so effusive about the effect that the idea has had at the shop. One of my sons works there. We've known the family of one of the owners through our kids for years.  So,  it is no surprise that  the idea of hostmanship works at  BB Barns. Hostmanship describes how they have been treating their customers all along.

The real question is whether a leopard can change its spots.  Can a company not known for the care of their customers turn it around.  Is Hostmanship a powerful enough idea that employed with determination and commitment that it will work like it works at BB Barns?

Read the book first, and then you decide.   The change that is necessary doesn't begin with the business, but with the leaders of the business. So, when Jan and Olle write that Hostmanship is an attitude, it simply means your personal attitude about the people who walk through the door.

Little Things Matter

David Gaddy at Imagine Art pointed me to a Tom Peters piece on the importance of the little things in customer service.

How do we know what the little things are?  We watch, listen, observe, adapt, adjust, change, revolutionize, revamp, reorganize, move, and do it all over again.

The hard part is building the relationship, not managing the transaction.

How many clients or customers do you have that are not interested in the higher level performance you desire to provide?  What do you do then?

You do your best.  Learn from the experience. And when the next project or opportunity comes along, you factor in the discrepancy between provider and customer expectations. 

In this sense, it is therefore more important that your agreements be clear and specific, especially about outcomes, and in particular the implications of outcomes.

We serve out clients best when we do our best. Doing our best means taking care of the little things.  When we develop the relationship with our client for the long haul, we are able to more easily align expectations for both parties responsibilities and performance.

Enterprise Rental Car's Eight Critical Customer Service Skills

John Moore blogs on Enterprise Rental Car's Eight Critical Customer Service Skills.

They are:

1. A passion for taking care of customers.
2. A willingness to be flexible.
3. A work ethic based on dedication to the company and its mission.
4. An eagerness to learn a new business and work their way up.
5. Self-motivation and goal-orientation.
6. Persuasive sales skills.
7. Excellent communication skills.
8. Leadership ability.

Now these look good on paper, however as an Enterprise customer, I have to say that these are pretty accurate.

What has impressed me more than anything about Enterprise has been the quality of employees.  They are smart, eager to please and very congenial to deal with.

A year ago December, our family went to the Gulf coast of Mississippi to put on a party for the kids from the second grade of a school who had lost their homes in Hurricane Katrina. I told that story here

We rented this huge 15 passenger Chevy van from Enterprise.  When I went in to our local Enterprise office, I told them the story, and without any prompting, the salesperson, Candace, gave us a 50% discount.  That reduced the cost of the trip dramatically. 

The lesson here is that you can have the best principles on earth, but if you have lousy employees, those principles won't make any difference.

It is a question of talent. And Enterprise, in my estimation, does a great job in hiring great talent.

Real Life Leadership: Positive interactions build vital relationships, trust with customers

Happy New Year!  My first column of the New Year is online - Positive interactions build vital relationships, trust with customers.

I have a Rule of Thumb, a guide for understanding relationships with people.  I've concluded that people want two things. They want their experiences to be Personally Meaningful and Socially Fulfilling.  Here's how I break this down.

Personally Meaningful is an affirmation of the values that a person finds important for their life.  If you've read Jim Collins work (Built To Last and Good To Great) you'll understand what I mean by values.  These are guiding principles that form the foundation of a person's life. Sounds deep doesn't it.  Well, it is.  And it cuts both ways.

If you lack any clear values, then you may lack focus. You may not really understand the impact that you are to have through your business.  If business is simply an activity to make money, then your customers will know, and treat your business as a commodity.  And commodities are bought and sold primarily based on price.  If that is what you want, you'll spend most of your time finding new customers rather than building from a sustainable base of customers.  Its cheaper to keep them, than to continually find new ones.

If your customers lack any clear values, then they will treat you as a commodity.  You can only appeal to them based on price.  And any repeat business is based on price, not the customer relationship.

So, if you want to create a sustainable customer base, then you have to address the issue of establishing some common ground of personal values that are meaningful to both you as a businessperson and to your customers.

Socially Fulfilling is different than Personally Meaningful, but builds upon it.  Regardless of this over-played myth of the rugged individualist, most people aren't that individualistic. They are quite social, and enjoy their Personally Meaningful experiences in life to be social ones.  Your customers who lack a clear set of values, who treat you as nothing more than a commodity, at the same time will party with their friends.  They value the social aspects of life.

What this means is that we need to understand how the social dimension functions in the life of people, and then create customer experiences that support it. For example, in a social environment where peer pressure and consumerist values are high, then it is difficult to divide an individual off from their tight, closed social group.  Part of their group identity is sharing the same brands.

Therefore, as a business person, you try to appeal to the whole group.  Give them incentives to bring their friends.  If you pay attention to cell phone pitches to young people, there is a clear recognition of the importance of the peer group.  "Free calls to friends" is a recognition that some consumer choices are not individual ones, but by a social group.  How can your business tap into the social peer pressure so that you get the whole group as a customer instead of just one.

What this leads to is the recognition that businesses want their customers to feel like they are part of a social group as their customers.  This is fundamental to the customer evangelist idea.  "Hey, bring your business here because these people are great." 

Managing the social dimension of your customer relationships takes more effort than simply being good at the point-of-sale transaction.  It requires some thought about the experience that you want people to have when they encounter your business.

Okay, so where do you begin if this is really an alien perspective for you.

Do two things.
1. Ask questions. Ask your customers about their experience. Talk with them. Find out what is important to them.  And then respond to them with your own thoughts. Create a conversation with them that is ongoing.  Make it personal. Remember their names.  Treat them with respect.

2. Observe. Look at what happens in your interactions with other businesses.  What are they doing that makes you feel more attached to them as a business?  What don't you like.  For example, I really like my bank, and am very unhappy with the cable company that provides my internet service.  It isn't the quality of the product.  It is the treatment of me as a person and a customer. 

So the Rule of Thumb is create customer experiences that are Personally Meaningful and Socially Fulfilling.  Use this guide to develop a better customer relations outcome for the coming year.

And have a splendid year with your customers.

Reconnecting with Customers - Mavericks at Work comment #3

This is the third of four commentaries on the new book Mavericks at Work by William C. Taylor and Polly LaBarre.

Reconnecting with Customers

“Three thankless realities define the state of competition in industries from automobiles to airlines, movies to mutual funds: oversupply, overcapacity, and utter sensory overload. Companies are selling too much of everything; they have the wherewithal to make more of what they’re already selling too much of; and they are unleashing too many marketing messages on customers who can’t begin to process all that they’re seeing and hearing.”

What this tells me is that businesses have lost focus. Not just a loss of focus on the customer, but also a loss of focus on what their business is.

Recently, I spoke with a fellow who had just left his corporate sales job to start his own business. One of the reasons he gave was that the business had broaden its marketing scope so wide that it was impossible to continue to service their customers well. It was no longer about servicing their customers, but about selling more and more people more and more products and services. 

Every day I am acquainted with businesses that understand what Taylor and LaBarre describe, and many more that don’t. Why is it that some businesses get it and others don’t? It seems common sense.

I think it goes to a notion that has grown over the past century that business is a scientific enterprise consisting of technical tasks. As a result, my job is to faithfully and efficiently complete those tasks everyday.

The shift that Taylor and LaBarre note, as have many other business writers, is the one to a customer-centric business model. It really is about how relationships form. In this instance, it is between a company and a customer. It is more than an economic exchange, a transaction. Rather it is an experience that envelops the customer in a world that touches their lives.

Taylor and LaBarre offer five principles to consider in reconnecting with customers.

1. There’s always a demand for something distinctive.

How are you distinguishing yourself and your business from your competitors?
How is your business different than it was a decade ago? How do you describe that to people?

2. Not all customers are created equal.

Who is your ideal customer? Who fits your product or service better than anyone else? What can you do to create a stronger bond of experience with them?

3. Brand is culture, culture is brand.

Do you know what your business’s customer experience culture is like? What do your customers experience when they interact with you and your employees?

4. Advertising to customers is not the same as connecting with customers.

How dependent are you on advertising to make each month’s cash flow projections? What does your advertising say about the experience that your customers have with you?

5.When it comes to creating brand value, dollars-and-cents thinking doesn’t always make sense.

How much do you invest in the experience your customers have with you? When they call, do they talk to a real person or an answering machine?

Just as innovation has become an open-source collaborative enterprise, so too, the connection to customers has become a much more open experience of interaction and relationship formation with customers.

Here again it requires leaders to reconsider how they lead. To create a personal experience requires leaders to be a real human being with the customer.

How do you become a real human being?  Sounds silly dosn't it.  Well, it is more than breathing in and breathing out.  It is more than showing up every day.

Here's how?

First of all become absolutely clear that you can't be the answer person for every question.
This means that you firmly grasp in your mind the need for humility.  This doesn't mean you don't have confidence, and you aren't courageous in your performance as a leader.  It means that you don't enter every situation with a preconceived notion that your way has to win, and that you already have the answer that you have to force down everyone's throats.

Second, push as many decisions as far down the organizational chart as possible.
  What's the impact?  Three changes.  One is that many problems will begin to get resolved by the people who understand the problem best, the people responsible.  Two is an environment of team work that elevates people's satisfaction of work.  Three, and this has to be intentional, a higher quality of communication that releases you the leader from the fear and doubt of not knowing what they are doing down there.

Three, change the ideas that you use to understand who you need to be as a leader and a person. This begins with ideas about human nature in the context of business.  Let me suggest three by author and philosopher, Tom Morris - True Success, If Aristotle Ran General Motors, and his latest, If Harry Potter Ran General Electric. Read through these books, and you'll develop a fresh and inspiring persective on what it means to be a leader and a human being.

Lastly, incorporate these changes, using The Circle of Impact, of Ideas and Relationships into the Organizational Structure and operational practices of your business. This is true of all the ideas that you pick up in reading Taylor and LaBarre's book. 

An Idea that does not lead to action is eventually lost. Relationships that lack core values and ideas lose their purpose. Organizational structures without purpose or healthy relationships, decline.  Therefore, whatever idea you recognize as valuable, whether from Mavericks at Work or any of Tom Morris' work, you have to incorporate them into your relationships with other people and into the structure of your organization. 

The principal problem is that virtually no one has every been trained to do this.  So, if you need help just ask.

Read the book.  Put the ideas in action.  Don't wait for a convenient time. Just do it and do it with your people.