What Value Do You Add to Customer Relationships?

By Pierre L. Hulsebus

Finding a book at a local mega book-mart can be overwhelming when thousands of titles are available. Locate a clerk, request a specific title, and the following may occur. After searching his computer, the clerk may say, “We have one in stock; let’s go retrieve it.” Over to the appropriate shelf you go. “Well, it’s supposed to be right here”, he states. It is not. After fifteen minutes of checking various corners in the store, he says, “Let me check with the store across town. They may have it in stock.” Thanks, but not thanks. I’ll check elsewhere. Back at the office, I purchased my book online at Amazon.com and had it delivered to my desk in two days.

We have all been amazed as Amazon.com has become the vendor of choice when purchasing books. This year, Amazon expects sales to grow over 19 percent to $4.7 billion. Left in the wake of this growth are the empty “mom and pop” book stores. Who is the “Amazon” in your industry?

Amazon’s growth is not a fluke of technology, ubiquity, or some technology black magic. The major ingredient to their growth recipe is Customer Relationship Management (CRM) execution. Not only did Amazon have the book I wanted, they pointed me to ten other titles I might also like, two of which I bought. They have systemized the six most profitable words in sales, “Would you like fries with that?” They seem to know customers better than they know themselves, and customers value that input. When buying a book, customers may not know all of their options, but Amazon does. This knowledge of needs is now expected from local book stores.

Leveraging Customer Intelligence to capture customer loyalty is the lynch pin strategy for sales growth. Right now, there may be at least five well-financed companies trying to capture your industry using the Amazon model. Will they successful? Will you or your competitors become victim to this unnamed market gorilla? Will your company survive or will it be left in the wake with others who have fallen prey to this industry consolidation? Most likely it is not a question of “if”. It is a question of “when”.

Now is the time to reorganize your business model and analyze your Customer Intelligence systems. Your strategy should be summed up in two words: ADDING VALUE. Amazon does not add value to their products; their products are simply books. They add value to the customer relationship by greeting customers by name and showing them the books they might be interested in reading. They pay attention to what customers are searching for, and what they have purchased in the past. They listen.

It will be helpful to apply this perspective to your company. How are you adding value to customer relationships? Do your sales people simply offer customers product brochures or the notorious “What do you want/need today?” Simply distributing products to customers offers little or no value in today’s market. Your advantage over the gorilla is customer relationships. Build a knowledge base of how customers use your products, and how it helps make them money. Ask them “What can we do to make your business more profitable?” And then, build a system to capture this information so you can sell to them intelligently.

Customer Relationship Management is a business strategy to identify, obtain and maintain your most profitable customer relationships. What you can do, indeed what you must do, in this age of Empowered Customers, is to develop and execute a CRM strategy that will drive customer loyalty and profitability. Once you illustrate you know your customers better, understand their needs, and how they use your products or services to make money, you are on your way to keeping your customers for life.