580 — ‘The efficient relationship and the art of self-denial’. The opinion of Lior Arussy, President of Strativity Group

Mar 24, 2003 | Conteúdos Em Ingles

People and processes represents 90 per cent of the resources related to customers initiatives. However technology which represents only 10 per cent gets the vast majority of the billions of dollars poured into this market. The main reasons for this disproportionate distribution is corporate attempt to avoid the real issues and trying to patch their current operation with the soup de jour technology.

The problem starts with companies unwillingness to stop taking the customer for granted. No relationship can last when one side feels stronger and more powerful than the other. It tends to lead to abuse. Now, I am sure this statement will receive wide acceptance among executives, however very few are ready to restructure their business and operation to adapt to this common sense truth.

Instead, they rush to purchase the latest technology that promise to improve customer relationship and hope that this purchase will buy them more time delaying the inevitable changes.

By doing so companies are avoiding the main problem that is most likely turn their initiative into a failure, they are not facing the fact that customer relationship and corporate efficiency are two conflicting strategies.

The modus operandi in many corporations is treating customers as a destination to be acquired, the moment this goal is achieved the next objective is to maximize profits from the customer while minimizing the costs associated with the customer.

This principle explains very well why companies prefer to have their customer waste their time while working through a maze of call center automated systems instead of simply picking up the phone and talk to them (“it is too expensive…” they say).

Years of engraining the cost conscious strategy which dates way back to Fredrick Winslow Taylor’s Scientific Management theory in companies resulted with a well oiled machine with the proper procedures and principles to ensure than not a single unnecessary cent will be spent on a customer. (Ever considered sending them a bouquet of flowers, just to be nice?).

I always find it amazing that regardless of the number of companies who has my birth date in their database, none of them bother to send me a simple birthday card. (With some of them I spend more than 100,000 miles in the air every year…).

Relationship on the other hand is everything but efficiency. Efficiency is the one strategy you do not apply when you want to obtain a true lasting relationship. None of us will entertain an efficient relationship for too long in our own life, and the same is true with customers.

When rushing to invest in new customer-related technologies while avoiding the need to re-examine their relevant strategic and operational aspects, companies are fooling themselves to believe that the technology will cure everything without their need to face the real challenges. They also, at the same time, write their own guarantee for a failure and a waste of money and resources.

Technology companies are not free of blame either. They have assumed greater causes and made much more outrageous claims regarding their technologies’ capabilities, than what their technologies can actually deliver.

Technology can never deliver an excellent service to customers. Only people do. Waiving some fancy ROI analysis in front of the customers, technology companies rushed customers to close on the basis of reaping great measurable benefits fast.

While busy signing the contract, they were already busy with the next client leaving their existing clients to figure out on their own what they have just got themselves into.

As one customer told me once, “technology is a tool and even a fool with a tool is just a fool” I would dare to rephrase it by saying “a fool with a tool is even greater fool and a more dangerous one”. He believes that he possesses the solution and rush to implement it while neglecting to face the real challenges; changing people and processes.

Smart in hindsight, companies now point out to the need for executive sponsorship (which project in the company does not require executive sponsorship anyway?) and ensuring multi-departmental buy-in for these project (did you ever implement a successful project without one?) before making the investment.

But these suggestions are stopping short of the necessary activities. Without careful planning and change management, these initiatives will continue to fail. They have never been about successful installations and technical training, they were all about planning and managing the change.

Companies must face several key questions when evaluating a customer-related initiative.

1. What are you trying to achieve with the new initiative? What kind of a relationship are you seeking? Why should the customer connect to your company on that level?

2. What does it really take to build such a relationship? Are you ready for the long-term investment you need to make to obtain the long-term loyalty?

3. What efficiency-based strategies in your company would you need to change to accommodate the new relationship initiative?

4. Are you ready to give those efficiencies up?

5. What is the cost of giving up these efficiencies? How does it measure against the potential rewards?

6. How would it affect your recruiting, training, performance evaluation and compensation of your people?

7. What kind of new training would your people need?

8. In what realistic timeframe can you achieve such a change?

9. What kind of activities required to sustain and re-energise the relationship initiative?

These questions are all internal and must be faced internally before rushing to buy a technology. The technology, as it was said before, it merely a tool. It is easy to rush to purchase a well defined product which claims to deliver the goods, only to have a vendor to be blamed for your own mistakes.

It always amazed me to see corporations spends millions on customer related technology and not even 5 per cent of the technology cost on managing the people and processes changes associated with the same exact initiatives.

Efficiency based strategies are legitimate and usually result with a price conscious-customer. Relationship based strategies are legitimate and have proven to result with lasting, profitable loyalty.

Forcing however a relationship-based strategy on an efficiency-based company is a recipe for disaster and at best will result with self-denial if not with customer cynicism (a.k.a. growing lack of trust and fast diminishing loyalty).

Companies must face the true consequences of their initiatives and plan accordingly. It is only then that the technology tools can assist in implementing the intended relationship-strategy. Relationship is more about people and processes than anything else. The numbers speaks for themselves.

Lior Arussy
[email protected]

Lior Arussy is the President of Strativity Group, Inc. and author of The Experience! How to Wow Your Customers and Create a Passionate Workplace (CMPBooks 2002).

Strativity Group delivers Customer Experience Management (CEM ) consulting services that allow organisations to develop customer experience strategies and deploy them across their operation.

Em Foco – Opinião