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TFI Daily News

World News for World Changers

Feb 28

Do Your Customers Think You’re Incompetent?

By Don Peppers, February 26, 2013
Fairfield, Connecticut is a classic bedroom community, with a large concentration of business people who commute five days a week into New York City. On Saturdays, however, downtown Fairfield is very crowded with shoppers, and it’s often difficult to find a parking spot. So a few years ago a local bank began offering free parking. Just come into the bank for any transaction on Saturday morning and you can park in the bank’s lot for two hours without charge.

One Saturday an executive parked in the bank’s lot, ran a couple of errands and did a bit of shopping, then 90 minutes later brought his parking stub into the bank and handed it to a teller to have it validated. “Yes sir,” the teller said, “I’d be happy to validate your parking, but first can you just tell me what transaction you did with us today?”

"Actually," the executive said, "my wife came in yesterday, put some checks in the account, and got some cash, so I didn’t really need to do anything more today."

"I’m sorry, sir, but I can’t validate the ticket unless you actually do a transaction today…"

You can probably see where this discussion was headed. Perhaps you’ve been the customer in similar discussions. An argument ensued between the teller and this customer, but eventually the customer relented, and agreed to complete a transaction just to have his parking stub validated. The customer was the CEO of a Fortune 100 company, and the transaction he chose to undertake involved removing more than a hundred thousand dollars of his personal funds from the bank and transferring it to another bank, leaving $200 in a savings account so he could continue to park free in the bank’s lot on Saturdays. (Then, of course, the teller validated his parking stub.)

What’s ironic about the bank’s story above is that while their intentions were generally good (they were just trying to provide a new service to customers), they were clearly not competent enough to know that holding rigidly to the transaction-required rule, at least with respect to this extremely valuable customer, was not a very good idea.

A business’s competence can be broken down into “product” competence and “customer” competence. And while product competence is at a high level in most economically developed regions of the world, the vast majority of businesses today still aren’t very customer-competent at all, even with all the computer power and automation available to them. You might be surprised how incompetent most businesses are in the eyes of their customers—even (perhaps) your own business.

Two hundred years ago, before assembly lines and mass production, virtually all commercial activities involved face-to-face interactions between customers and the individual merchants or craftsmen who sold to them. The most successful sellers maintained strong relationships with their customers, remembering personal specifications and carefully attending to the different needs of different customers.

Computers have made it possible once again to provide personalized service like this. We can call it customer relationship management (CRM), or one-to-one marketing, or customer experience management, or customer centricity—but no matter what we call it, the fact is that the cutting edge of business competition today involves customer competence, and what’s amazing is how few businesses have really mastered the task.

If you want to be customer-competent enough so that your customers find you trustable, then at a minimum you need to know how your customers are different, and be willing to treat different customers differently. And before you conclude that your business is customer-competent, ask yourself these questions:

•Can you recognize your customers individually, from one transaction to the next?

•Rather than focusing on one product at a time and trying to find customers for that product, do you focus on one customer at a time and try to find products for that customer?

•Do you have marketing and communications programs in place that are designed to steadily enrich the context of each customer’s relationship over time?