Do Your Customers Think You're Incompetent?
Don Peppers
Customer experience expert, keynote speaker, business author, Founder of Peppers & Rogers Group
Fairfield, Connecticut is a classic bedroom community, with a large concentration of business people who commute five days a week into New York City. On Saturdays, however, downtown Fairfield is very crowded with shoppers, and it’s often difficult to find a parking spot. So a few years ago a local bank began offering free parking. Just come into the bank for any transaction on Saturday morning and you can park in the bank’s lot for two hours without charge.
One Saturday an executive parked in the bank’s lot, ran a couple of errands and did a bit of shopping, then 90 minutes later brought his parking stub into the bank and handed it to a teller to have it validated. “Yes sir,” the teller said, “I'd be happy to validate your parking, but first can you just tell me what transaction you did with us today?”
“Actually,” the executive said, “my wife came in yesterday, put some checks in the account, and got some cash, so I didn't really need to do anything more today.”
“I’m sorry, sir, but I can’t validate the ticket unless you actually do a transaction today…”
You can probably see where this discussion was headed. Perhaps you've been the customer in similar discussions. An argument ensued between the teller and this customer, but eventually the customer relented, and agreed to complete a transaction just to have his parking stub validated. The customer was the CEO of a Fortune 100 company, and the transaction he chose to undertake involved removing more than a hundred thousand dollars of his personal funds from the bank and transferring it to another bank, leaving $200 in a savings account so he could continue to for park free in the bank's lot on Saturdays. (Then, of course, the teller validated his parking stub.)
In our book Extreme Trust: Honesty as a Competitive Advantage, Martha Rogers and I suggest that a customer will only trust your business if he or she thinks you have (1) good intentions (i.e., that your actions will be in the customer's own interest), and (2) competence.
What's ironic about the bank's story above is that while their intentions were generally good (they were just trying to provide a new service to customers), they were clearly not competent enough to know that holding rigidly to the transaction-required rule, at least with respect to this extremely valuable customer, was not a very good idea. When you treat all customers special, you're really not treating anyone special.
A business's competence can be broken down into "product" competence and "customer" competence. And while product competence is at a high level in most economically developed regions of the world, the vast majority of businesses today still aren’t very customer-competent at all, even with all the computer power and automation available to them. You might be surprised how incompetent most businesses are in the eyes of their customers -- even (perhaps) your own business.
Two hundred years ago, before assembly lines and mass production, virtually all commercial activities involved face-to-face interactions between customers and the individual merchants or craftsmen who sold to them. The most successful sellers maintained strong relationships with their customers, remembering personal specifications and carefully attending to the different needs of different customers.
Computers have made it possible once again to provide personalized service like this. We can call it customer relationship management (CRM), or one-to-one marketing, or customer experience management, or customer centricity—but no matter what we call it, the fact is that the cutting edge of business competition today involves customer competence, and what's amazing is how few businesses have really mastered the task.
If you want to be customer-competent enough so that your customers find you trustable, then at a minimum you need to know how your customers are different, and be willing to treat different customers differently. And before you conclude that your business is customer-competent, ask yourself these questions:
- Can you recognize your customers individually, from one transaction to the next?
- Rather than focusing on one product at a time and trying to find customers for that product, do you focus on one customer at a time and try to find products for that customer?
- Do you have marketing and communications programs in place that are designed to steadily enrich the context of each customer's relationship over time?
- Does your business use customer-based metrics, including lifetime value, customer profitability, and customer equity, to evaluate the success of your business units and individual employees?
Customer experience expert, keynote speaker, business author, Founder of Peppers & Rogers Group
11 年Hey, Justin, nice to hear from you - and you too, Barry! Two quite different perspectives though, right? You know what's interesting is that the comments on this article are pretty evenly divided between "it's the stupid customer" and "it's the customer, stupid." I began on Barry's side, because I think the bank did a very poor job of (a) communicating to employees the real intent of the policy, and (b) making available to employees information on who the bank's most valuable customers are. But I do see your point, Justin - and this is a point that is usually articulated by European commenters, for some reason. We could elaborate on thi9s story to provide more detail that might push me over to your side, J, but as I presented it here, I am still thinking that it better illustrates poor "customer competence" on the part of a bank.
Proposal Manager at Granicus
11 年I completely fault the customer here. If parking is as you say - then their "free parking" is very limited - and he failed to meet the requirements for parking there. While the end result is them losing a great deal of business from one customer - that doesnt change the fact that this consumer overestimated his privilege. Would this have been an issue if the customer had only had $200 in his account (and few prospects for increasing his wealth and therefore business there)- and would that somehow make it more fair? Also, if this particular customer is so wealthy - why is he wasting what is likely "valuable time" just to save a just a few dollars? Clearly he is not an economist.
Action-oriented communications innovator who solves problems and gets things done.
11 年Hey, Don -- this is a classic case of training the employees on the letter of the law, but not the intent. It's unfortunate that good ideas go awry because of the lack of explanation to those who have to implement them (or, in this case perhaps, lack of good training). It still amazes me that after all the work you, Martha and others have done to sensitize business leaders on the importance of customer centricity, that things like this still happen. Yet nearly every day I'm impressed with front-line employees who do the right thing (and sometimes break the "rules") to retain me as a customer. It gives one hope!
Customer experience expert, keynote speaker, business author, Founder of Peppers & Rogers Group
11 年Madhav Bokil: While you aren't the first commenter to mention "fairness," are you thinking of it just because this is a bank? If you were a very frequent customer at your local pizza parlor or barbershop, would you have the same sensitivity?