How do you keep moving forward in a confrontational and ever changing environment? in this article ShopAbility discuss the importance of managing your Customer Relationships and ways of developing this capability across your business.
By Peter Huskins for Retail World Magazine.
Rather than write about the theories and well trodden path of Relationships in general, I’d like to frame this article more about challenging you to identify what capabilities and competencies matter to you and your business when you are managing your Customer relationships NOW. We all know, and have been trained in our careers, about Customer management and how to influence the sale. We know we need a win/ win relationship, good networks across our Customer’s business and a reputation for trust, confidentiality and achievement.
But how do you measure how good you really are, and how good you want to be?
In our last article on Scorecarding Your Business, Norrelle mentioned the importance of key factors in building and using a Scorecard. One specific area of competence that was identified was Customer Engagement – read Relationship Management.
But what does it mean in a Scorecard context and then in an application context? Measuring and assessing performance on a Company or Individual level is one thing, but the ability to transform a relationship into a powerful partnership focussed on joint growth and profitability is quite another challenge.
Being able to adequately assess the capability of your business (and of individuals) to manage Customer Engagement, in other words Relationship Management, is a critical first step in understanding if it is a core strength that can be leveraged, or an underlying weakness that needs development. A thoughtfully developed Scorecard also allows for future re-assessment that enables progress to be measured and fine tuning to take place.
So let’s look at the basic framework around Customer Engagement and the possible criteria to look at if want to apply a specific lens to this fundamental discipline, what we call
The 5 R’s of a Relationship
Relevant – Rigorous – Respect – Resourceful – Right Time
We believe these are the key competencies and capabilities that Customer facing people need to have and use when they engage with their Customer. They also apply to functions that may not have direct day to day responsibility for Relationship Management but in many instances their decisions or actions have a direct impact on a Customer…and someone else has to sort out the mess.
The next time a Brand decision is taken in apparent isolation to the Sales function, and to the bewilderment of a Retail Customer, will not be the last! Likewise the next time a promotional price point is promoted to the bewilderment of both Sales and Marketing will not be the last! These are the day to day challenges of managing a Relationship, both external and internal.
Now let’s expand on these 5 R words, using other words that hopefully will strike a chord and assist in building your own Scorecard and identifying areas of improvement for your Customer Relationships:
- Relevant – how appropriate and significant you and your Company are in your dealings with your Customer. Words like current knowledge (of the Category), product and competitors, store conscious, future focussed, clear and concise, objective, informative, KPI driven, cost conscious or low cost come to mind
- Rigorous - how thorough and accurate you are in managing your Customer’s business. Focussed, applied, consistent, curious, speedy, interested, targeted, well planned, analytical and diagnostic are good descriptors
- Respect – is there a high mutual admiration and opinion of each other? Committed to the Retailer, single minded focus internally, your Customer’s champion, loyal, flexible,
- Resourceful – how practical yet creative you are? Being different, exclusive, innovative, imaginative, knowledgeable, strategic, whole of business,
- Right time – balancing a sense of urgency with timeliness and applicability
Urgent, available, timely, opportune, sensible and appropriate.
Now it should be a fairly simple exercise to identify the words you would like to use to fashion into this table featuring the 5 x R’s (or another set of key words/ titles that you would like to use to benchmark your business)
There is a level of complexity and thought that needs to be applied to develop a ‘fair’ scaling methodology to the Scorecard. By scaling, I mean what does good – better – best look like for Relationship Management? The words and phrases must describe exactly what you mean for each level of Relationship Management, and these may vary by Company based on the emphasis you place on these from a strategic sense as well as an application sense.
The best and most engaging way to do it is to develop what you believe best describes each scale for the Scorecard and then distribute the draft around to key people in the business asking for their input and amendments.
Sometimes you hear that it is an easy solution to “ask your Retail Customer” however in reality it is a lot more difficult than that. Different Buyers in different categories within the same Retail company have different hot buttons. Some KPI’s and business strategies will be the same however each Category (read Buyers) is unique. Also the ability to be able to benchmark against your peers is beneficial as strategic and tactical opportunities are frequently highlighted.
Everyone has days where everything just seems to go wrong – think about asking a Buyer to candidly rate your business the day after a particularly heavy negotiation session over Trading Terms or a competitor’s hot promotional price point, note the word ‘candidly’. Of course they will be distracted, the outcome of your business rating will be dependent on the success (or not) of the previous day.
Strategically some companies also wish to excel in some areas and not in others, much like the alternatives offered in The Discipline of Market Leaders (Treacy & Wiersema) where one of either Operational Excellence, Product Leadership or Customer Intimacy are selected as the core strategic Company capability. Your chosen discipline is the driver for your business, one that you master vs your Competitors, however the model requires at least normal/ average capability in the other two disciplines in order for the chosen model to succeed.
If you do wish to pursue the Customer Intimacy model, the key indicators are:
- Deliver to specific Customer needs, not broad market requirements
- Know the people you sell to & exactly what products & services they need
- Continually tailor products & services at reasonable prices
- Customer loyalty is a key asset; cultivate Relationships rather than pursue transactions
- Give the Customer more than they expect, constantly upgrading offerings
- Consider Customers a lifetime value, not just profit & loss on a few transactions
- Tailored mix of services or customized products; using 3rd parties to supplement internal activities
- Obsession with solution development, results management, and relationship management
The above descriptors also provide a neat alternative to use in the Customer Relationship Scorecard as well.
The overall message here is do not try to be all things to all people, select your Customer Relationship criteria and scaling methodology and then strongly measure and apply it, as the capabilities and competencies you design for your business must become a key strength in your relationship with your Retail Customer.
Relationship management is not all one sided, although it may definitely appear to be the case sometimes. The ability to see over the seemingly large immediate issues and then be able to contextualise for the benefit of a sound on-going relationship is the key – and that works both ways!
