Building the Coveted Customer Relationship
Peppers & Rogers lay out strategy to mine "scarcest resource"
Published in CSP Daily News
PHOENIX -- With the economic landscape looking more and more like the moon after an asteroid storm, and customers putting their dollars and cents under their mattresses instead of into the GDP, it has become more necessary than ever to determine what truly creates value. "Companies do not create value unilaterally," Don Peppers told attendees at CSP's 2009 Convenience Retailing Conference in Phoenix last week.
Peppers is a founding partner of the Peppers & Rogers Group, a Norwalk, Conn.-based management and consulting firm that invented the term "1to1 marketing" as a [image-nocss] way of helping retailers treat their customers differently.
"Only customers create value. Only customers pay us money," he said. "If we're going to grow our business, we have to think about how many customers there are and make the most of as many customers as we can."
Easier said than done, especially considering the aforementioned economic minefield. Not so, said the duo: All it takes is a little "relationship management."
"Customers have memories whether you do or not," said Martha Rogers. "But with no customer memory, even good service isn't enough. Remembering [that customer] creates the customer relationship."
The team laid out four additional steps to implementing the valuable customer relationship:
Identify the customer, individually and by name. Differentiate them by value and needs. Interact with them more cost-efficiently and effectively. Customize some aspect of your retailer behavior; make parts of your store better for a particular group of customers. They cautioned against forgetting the customer's perspective and encouraged retailers, and more specifically the employees behind the counters, to walk in the consumer's shoes. "The customer is not interested in your people or your product or even your reputation," Rogers said. "The customer simply wants his needs met. So don't just speak your product language; speak the customer's language."
Another mistake retailers often make, the two said, is falling for the following business myths:
With good marketing, you can always acquire more customers from somewhere. TRUTH: Customers are scarce and should be treated as such. Value is created by offering differentiated products and services. TRUTH: Customers create all value. The most important goal in business is increased sales for this quarter. TRUTH: Long-term value is just as important as current profit. "Every interaction counts," Peppers said. "Why do customers choose you? Trust, confidence, strength of customer relationships."