Write back to Jack & Suzy Welch at editor@businessandeconomy.org
Que: At my old company, we did everything to retain customers: built
dedicated facilities, designed innovative packaging, offered aggressive pricing and delivered quality second-to-none. Still, a few major accounts dumped us. Is costumer loyalty dead? (Carl Warren, Ridgefield, Conn.) Ans: Not dead, but different. Time was, you could “earn” a customer’s loyalty with tickets to a big game, a Disney World vacation or even a nice dinner a few times a year. And you could pretty much keep that loyalty with what used to be called belly-to-belly selling, or put less graphically, relationship building.
You’d listen to your customers’ dreams and worries, visit them to see how your product fit their needs and trouble-shoot their problems. In more competitive situations, you’d add the sort of extra services you mention in your letter. And, usually, this was enough. Price did matter, sometimes a lot. We’re only talking about, say, 10 years ago. But it never mattered like it matters in today’s fierce economy. Internet, in particular, has made pricing transparent & purchasing global, & it’s increasingly becoming a buyer’s world.
But we’re not ready to bury customer loyalty, only to redefine it from a transaction to a two-way street which means you and your customers don’t have a deal as much as you have mutual dedication. Because you, the seller, are not delivering on just price, quality and service. You are demonstrating intense loyalty to your customer by giving him a comprehensive, inimitable way to win. Better productivity. Faster throughput. Lower inventory. More innovative products. You are delivering something – anything – that makes you indispensable to your customer’s success in the marketplace. Then, and only then, will you get complete loyalty in return. Now, you may be thinking, “We did that! We built dedicated plants. We designed special packaging.”
Que: At my old company, we did everything to retain customers: built
dedicated facilities, designed innovative packaging, offered aggressive pricing and delivered quality second-to-none. Still, a few major accounts dumped us. Is costumer loyalty dead? (Carl Warren, Ridgefield, Conn.) Ans: Not dead, but different. Time was, you could “earn” a customer’s loyalty with tickets to a big game, a Disney World vacation or even a nice dinner a few times a year. And you could pretty much keep that loyalty with what used to be called belly-to-belly selling, or put less graphically, relationship building.You’d listen to your customers’ dreams and worries, visit them to see how your product fit their needs and trouble-shoot their problems. In more competitive situations, you’d add the sort of extra services you mention in your letter. And, usually, this was enough. Price did matter, sometimes a lot. We’re only talking about, say, 10 years ago. But it never mattered like it matters in today’s fierce economy. Internet, in particular, has made pricing transparent & purchasing global, & it’s increasingly becoming a buyer’s world.
But we’re not ready to bury customer loyalty, only to redefine it from a transaction to a two-way street which means you and your customers don’t have a deal as much as you have mutual dedication. Because you, the seller, are not delivering on just price, quality and service. You are demonstrating intense loyalty to your customer by giving him a comprehensive, inimitable way to win. Better productivity. Faster throughput. Lower inventory. More innovative products. You are delivering something – anything – that makes you indispensable to your customer’s success in the marketplace. Then, and only then, will you get complete loyalty in return. Now, you may be thinking, “We did that! We built dedicated plants. We designed special packaging.”
To which we’d ask: But did those services – no doubt costly to you – fundamentally change the game for your customers? Did they allow your customers, for instance, to expand into profitable new markets or catapult old competitors? It seems unlikely; how could they have walked away? They couldn’t have.
Modern loyalty, then, ultimately comes down to that old saying: “What goes around comes around.” The more fervently committed you are to making your customers win big in the long haul – not just meeting their immediate demands – the more fervently committed they will be to you. That’s a hard order, of course, but the only road to take in today’s world.
Que: What are the characteristics of a good company “university?” (Vladamir Glazunov, Moscow)
Ans: Your question, of course, mainly applies to large companies, as most other organisations do not have luxury of affording an in-house learning center. And what a luxury it is too, as effective management development programs can provide a real competitive advantage. Note the word “effective,” however. Because corporate universities too often are not. The most common reason is that companies bring in outside “actors” to do the teaching – typically B-school professors and consultants. Talk about undermining the process.
You want your own managers in front of every class, demonstrating for employees what “success” thinks and acts like in your organisation. That’s motivating – and it can also provide a heck of a lot of growth (not to mention fun) for the managers temporarily donning professorial robes. In-house universities also fail for a second, more insidious reason: They become warehouses – a polite word for “dumping grounds” – for employees who can be spared for a few weeks.
Companies must ensure managers understand, and abide by the fact, that the in-house development program is a reward for superior performance. Only the best get selected. In-house universities are pretty rare, and well-run ones don’t come easy. But when done right, they can be a potent force for change.
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
Modern loyalty, then, ultimately comes down to that old saying: “What goes around comes around.” The more fervently committed you are to making your customers win big in the long haul – not just meeting their immediate demands – the more fervently committed they will be to you. That’s a hard order, of course, but the only road to take in today’s world.
Que: What are the characteristics of a good company “university?” (Vladamir Glazunov, Moscow)
Ans: Your question, of course, mainly applies to large companies, as most other organisations do not have luxury of affording an in-house learning center. And what a luxury it is too, as effective management development programs can provide a real competitive advantage. Note the word “effective,” however. Because corporate universities too often are not. The most common reason is that companies bring in outside “actors” to do the teaching – typically B-school professors and consultants. Talk about undermining the process.
You want your own managers in front of every class, demonstrating for employees what “success” thinks and acts like in your organisation. That’s motivating – and it can also provide a heck of a lot of growth (not to mention fun) for the managers temporarily donning professorial robes. In-house universities also fail for a second, more insidious reason: They become warehouses – a polite word for “dumping grounds” – for employees who can be spared for a few weeks.
Companies must ensure managers understand, and abide by the fact, that the in-house development program is a reward for superior performance. Only the best get selected. In-house universities are pretty rare, and well-run ones don’t come easy. But when done right, they can be a potent force for change.
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
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