Understanding your customers is becoming
a complex task for most organisations in the 21st Century; not just because
market segments have become a highly complex multi-dimensional matrix of
customer types – but because most organisations no longer see customer service
as a primary factor in organizational growth – more as a minimalistic
requirement in their quest for profit maximization.
This approach to customer service has
been developing since the 1980’s – when organisations started to take advantage
of ‘customer loyalty’ built up since the end of the Second World War. Once an
organization has a loyal customer base – it’s easy to see how some high ranking
individual with dollar signs in their eyes – could see this group of people as
easy prey for making a quick buck – and hence the slide in customer service
began.
Of course the customers partly
encouraged this behavior because, even when they suspected the world might have
changed and that they were now being fleeced for their money, they still kept
loyal to the brand. Some customers might send letters to the CEO expressing
their dissatisfaction – but as long as they received some potentially
believable apology, they would quickly forgive and continue their loyalty –
because for years prior to this they had received great service and quality, so
how could this have changed.
Customers just didn’t see the complete
change in business and the associated ethics and didn’t realize that the quest
for long term sustainable success and growth through dedicated customer care
was a business school theory rarely practiced in the ‘new world.’
Generationally this had a huge impact on
differing customer views to purchasing and the concept of loyalty. The young
generation – not used to doing deals on a hand-shake and the concept of
customer loyalty – entered the world of consumption like a duck to water, not
expecting good customer service and quality products, and just looking for the
best deal. They knew how to use ‘new’ technology to find that best deal and
simply felt this was how business is done, and how it should be done.
The slightly older generations – those
now in their 50’s and above – still remember a time when being someone’s
customer actually meant something and hence many of these customers still long
for those good old days – and in a way, with today’s seemingly constant market
volatility – so should today’s organisations.
Customers are your business – they
define your growth, your profitability and your sustainability – everything
else is developed around them. This current short term view to business –
brought about in no small measure by greedy shareholders has not helped anybody
– and definitely not the average shareholder, looking to make money over the
long-term not the short. In fact the only people this new approach to treating
customers has helped is the institutional investors who don’t give a damn about
anything more than making more money today than they did yesterday – regardless
of whose expense that comes at. It’s not that they just don’t care about
organisations, they don’t care about their employees or their customers – they
just care about making an extra buck – whatever the cost of that buck might be
to ‘normal people’ through their long term savings or pension schemes.
In this global business environment what
today’s organisations need, as well as the countries they service in terms of
taxes and employment, is sustainability (it doesn’t even need to be sustainable
growth). To have sustainability you do have to have the right product at the
right price, and to be innovative in your offerings, in terms of future needs –
but what you should also want is a loyal, ‘sustainable’ customer, who will stay
with you on your journey and during that journey help attract new customers to
your products and brand – offering a win-win for everyone involved in the
business process.
Michael Porter wrote about competitive
advantage in his book of the same name – but few organisations consider
competitive advantage any more when it comes to their strategic thinking around
customers and customer service. Maybe it’s the fault of their boards or their
advisors, but industries with high churn rates, like telecoms, energy and even
gym membership – seem to be significantly more focused on short-term profit
maximization that long term sustainability – much more than creating that
elusive concept loyal customer in the 21st Century.
Organisations through their CRM
strategies have turned today’s customers into what they are – it’s not the
customers fault – they are what business have made them to be.
