Customer Relationships Are Dying and Profit Is the Killer

I was thrilled to see a recent NYTimes article from their recent Business Roundtable stating that CEO’s of major companies such as Apple and JPMorgan Chase Bank are seeing the need to deliver more than shareholder value. These CEO’s say that their businesses must also invest in employees, deliver more environmental sustainability, and deliver greater customer value. Amen.

Recently, I had the need to open a new business checking account. I went to the bank I’ve happily been with for the past 7 years expecting a smooth transaction.

What I experienced was an imposing inquiry of my business, customers, suppliers, and investments with the clear objective of selling me additional services.

I didn’t believe explanations that the bank was just trying to help make my business easier and more efficient. The promises of benefit felt completely hollow against the blatant zeal in presenting new products.

At the end of the nearly 90 minute session, I left with a business checking account and the thought that I would be looking for a new banking partner.

It is great that the uppermost level of corporate leaders are starting to rebel against profit as the sole measure of business success. When profit is the only goal, the customer loses.

As with any business trend, it will take time for this new philosophy to trickle through the ranks. But there is hope on the horizon.

In the meantime, I’ll be looking for a new bank.

Skunks Don't Like Light

My dog was skunked. If you have a dog, you understand the drama this creates. If not, you can imagine.  Frantic dog bathing in a special solution and loads of laundry.  It’s a brutal assault on basic living. Oh, well, things happen, right? But then, my poor dog was skunked again the next night. Clearly I had a skunk problem.  

I learned that skunks – night dwellers - don’t like light. There are other safeguards, but I have lights, so that became my go-to solution. A combination of flood and motion-activated lights have helped – so far.  

Our routine had to change. I now go out first alone with a flashlight to chase any skunks away.  Only then can my dogs come out. I stay with them in the yard, vigilant and constantly scanning with the flashlight.  We’ve lost a freedom.

I’m struck by a parallel between my skunk issue and what’s happening in our relationships with brands. We feel a greater need for vigilance and caution.  We’re losing trust in almost every level of brand engagement.

In a great series on trust, the Harvard Business Review states what we know is true, “Businesses that build trust among their customers are rewarded with greater loyalty and higher sales.”  .

How do businesses build trust? Kellogg School of Management Professor Niko Matouschek states in his excellent video series that “transparency is important. It’s important that customers are able to observe how I’ve treated other customers in the past.” D!gitalist recently published SAP CEO Bill McDermott’s solution to rebuilding trust. His first point? 100% transparency. 

Here is the parallel: Skunks don’t like light. Businesses engaging in unfair or deceptive practices don’t like transparency.  

Businesses are finding transparency isn’t a static state. Acceptable transparency levels are evolving. Trade secrets have been the engine of competitive advantage. The secret formula of Coke.  KFC’s secret blend of herbs and spices. Today, such secrets are no longer easily accepted.

Food labeling is evolving as consumers demand no secrets in foods.  Google has been pulled into ongoing dialog with the U.S. Congress to openly explore its business building algorithm. And, Facebook…well, you know. Consumers weary of hidden secrets are demanding expanded levels of transparency.

Online reviews, once considered the answer to product and service transparency, are losing trust. Businesses and consumers learned how to game the review system. As noted in a recent NY Times article on growing reviews,  “the tactics to make this happen often lead to rendering the star-rating scale useless.” What once brought trust now brings suspicion. This cycle will repeat as technology and trends evolve.

Brands can earn trust. Act with integrity. Do not deceive. Do not place profit above all else. Understand that a customer relationship is a relationship, not a profit opportunity.  And if you make a mistake, admit it and make it right. Stay current with your customer’s transparency expectations. Easy to say. Harder to do.

Are there aspects of your brand, product or service that your customers wouldn’t like if they knew?  Get your flashlight and chase away your skunks. 

Practice Saying "Yes"

The word “yes” is empowering.  It opens new opportunities.  It beckons innovation.  It delivers the most successful business programs and products. It can even make history.

Gil Amelio, the Apple CEO who would be succeeded by a returning Steve Jobs in 1997, cited Apple’s “undisciplined corporate culture” as a key problem.  Steve Jobs said, “You have to be run by ideas, not hierarchy. The best ideas have to win.”  Who do you think was guided by “no” and who was guided by “yes”?

“Yes” is so powerful that businesses put multiple safeguards in place to keep it in check. Almost every decision has to go through an approval process. Have you ever ordered lunch for a meeting and been reprimanded for not having approval to do so?  ”Yes” is corporate nitroglycerin.  ”No” is the corporate after-dinner mint.

To be fair, effective organizations have to align key functions around a “yes”. If funds aren’t available, if there are legal ramifications, if production isn’t available – any of these or a multitude of other factors can cripple an idea and thrust a company into trouble.

The problem is that business tries very hard to push most decisions to “no”.  Search “saying yes” on the Harvard Business Review website.  Three articles – all centered around the theme of saying “yes” to saying “no”.  Not really a “yes” at all.  

Saying “yes” to new ideas requires Informed Optimism.  If your outlook isn’t positive, no idea will resonate or take shape.  Dr. Richard C Senelick says, “Optimism is the inclination toward hope, and it determines how we come to terms with our present, future and past events.”  In other words, an optimist is more willing to envision the success and rewards of a new idea than to focus on the potential of failure.

Blind optimism is a road to disaster because it lacks grounding.  You must understand  your environment and the factors that create success.  Practical experience reduces evaluation time and provides greater confidence in decisions.  Add healthy optimism to that mix and you have a recipe for innovation and success.

Think of proposals or other new ideas you’re been asked to review.   Did you reject most outright?  Did you approve some only after significant revision?  Did you accept any outright?   What was your “no/yes” ratio?

Practice saying “yes”.  Listen to proposals with informed optimism.  Consider the good that can come of a “yes”.  Step towards risk within your information comfort zone.  Keep moving towards the edge with your “yes” decisions.  Find that perfect balance of informed optimism and you will begin to enjoy more notable success and greater personal satisfaction.