Posted by: Iain Lovatt | July 5, 2011

Humans – We’re A Fickle Lot!

“Byrdes of on kynde and color flok and flye allwayes together.”

 

According to William Turner (1545) – humans find some comfort in behaving like sheep.  Nothing wrong with sheep of course!  This behaviour was probably observed many hundreds of years prior to being put into print as a proverb.  Even Plato makes reference to this flock-like tendency in his words of wisdom.  I’m sure that the basis of its origination was more to do with survival rather than opinion but there is no excuse today for always adopting the same flock-like behaviour as everyone else.  The influence others have on our decision making can potentially lead to catastrophic outcomes.  A psychological phenomenon referred to as Groupthink explains why there is a tendency for people to agree with the consensus of the group rather than offer alternatives.  Examples include the Bay of Pigs invasion.

 

Nowadays, we needn’t worry too much about being eaten.  The only predators most of us are likely to encounter are facsimiles of ourselves.  Nevertheless, as a race, we are often more comfortable to follow the path of others.  We are indeed a fickle, cowardly lot sometimes.  We believe we always know best and base our rationale on what has gone before or what other herd-members are doing without questioning why! Only a minority have the courage to challenge the way things are and make appropriate changes.  In business, this collective behaviour is often prevalent, resulting in stifling the progress of customer engagement.  Isn’t it time to question group behaviour – to break away from the flock mentality when you know there’s a better way of doing things?  Let’s look at a classic example – customer engagement.

 

If we take a cross section of customers we will no doubt discover that they differ in many ways.  The relationships, the dependencies, spend and resource requirements to name a few.  This reality is easy enough to acknowledge yet addressing how these customers should be treated is a different matter.  It is an example of the blind leading the blind without questioning the underlying reasons why.  Many will cite ‘the customer is King’ or words to that effect in an attempt to show to the world that all customers are considered equal.  I believe that importance is a relative term.  Let me give you a for instance.  For instance, a customer who demands the lowest prices, plays you off against other suppliers, complains at every opportunity and stretches your resource without leaving you an appreciable profit (if any) may consider they are important to you but a sober analysis may uncover data that suggests otherwise.  And they act as though they are too. So what do you do? Well, predictably many follow their herd instinct and give in; vainly endeavouring to satisfy the customer’s every whim.  Do you recognise this scenario?  I’m not attempting to belittle the effort of companies to build a strong and consistent customer engagement model here – quite the reverse.  This is essential.  What I am challenging is the ‘one size fits all’ approach and why this is fundamentally flawed.  Let me explain why.

 

Very few businesses are able to deliver a consistent customer engagement policy across the board. The more complex the service, the more difficult this can become.  If we attempt to deliver a gold star service to all it will inevitably fail for many.  As a consequence, the overall standard of customer engagement will be compromised and potentially lowered to a silver level.  This can have a negative effect on the company’s perception and even dilute the strength of the brand – the last thing any business wants to experience.  Instead of following the line of least resistance, have the courage to re-evaluate your customer relationships based on what each individual business brings to you.  I would like you to consider becoming a Blue Sheep – bucking the trend and following your own instincts.  But more than this, you need the business intelligence to support your decisions and to revolutionise your customer engagement model.  To do this you will need to understand the value – the real monetary value – of each and every customer relationship you have.  We call this fundamental analysis Money Mapping.  It provides the insight you need to understand to the real cost of customer ownership, who your Treasure accounts are and what makes your Avoid accounts worthy of a fresh look!  This is how it works.

 

By gathering data from various customer touch points and blending this with comprehensive supplementary external data, a profile can be developed for every customer.  This will benefit you in two ways.  Firstly, it creates a historical picture of the profitability of each customer based on the reality of each relationship.  From this, customers can then be segmented accordingly into four groups which range from Treasure Accounts to Avoid accounts.  Treasure accounts will possess the characteristics of an ideal customer, one which warrants a gold service and worthy of going that extra mile to retain.  Conversely, at the other extreme, Avoid accounts are those that, in the current relationship structure, are losing you money, draining your resource and offering very little potential in terms of future revenue.  For these customers, the customer engagement strategy may need reviewing to establish profitability or to develop an exit strategy!  Why not?  Secondly, with a greater insight into what makes a Treasure account, you can now focus business development at those organisations that share similar profiles and synergies.  It’s logical and effective.

 

Customer service for most businesses has to be proportionate to be really effective.  The proportionality, however, needs to be understood in the greater context of the business relationship.  Trying to be all things to all people is laudable but not logical and certainly not necessary in my opinion.  An excellent service can be delivered in a multi-layered approach without the risk of degradation.  In our case the symbol of a Blue Sheep represents breaking away from the flock, looking at better ways of working.

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