Small Business

Customer Development Strategies


By Don Peppers and Martha Rogers The following excerpt is taken from Chapter 2 - The Real Economy

As the terms "one-to-one" and "CRM" enter the popular lexicon, we hear more and more people saying, "I get it." When gently pressed to explain exactly what it is about building one-to-one customer relationships that they "get," however, these folks often start talking about database marketing, call centers, Web sites or e-commerce. The fact is, a one-to-one customer relationship program might include some, all, or none of those features. And while one-to-one customer relationships are enabled by technology, the enabling technology should be viewed as the means to an end, not the end itself.

So how do we define "one-to-one"?

Martha Rogers

You are engaged in a one-to-one customer relationship whenever a customer tells you something about how he or she wants to be served, and you change your behavior, with respect to this individual customer based on that interaction.

This probably sounds like a commonplace business activity, especially for a B2B firm, and it is. But for most firms, including B2Bs, adjusting the company's customer-specific behavior to individual customer specifications is not a well-organized activity. It is carried out on an ad hoc basis, usually at the insistence of the account team or the sales organization, and the more specifications to be accommodated, the more cumbersome and manually patched together the whole process will be. So before you jump to the conclusion that "we already do this stuff," let's pursue the true implications of this kind of activity a bit further.

The idea of treating different customers differently implies that a longer-term relationship, based on previous interactions, is now possible. After all, if you treat every customer the same, then there is clearly no point to developing a relationship with any single customer. What can any customer possibly get out of uniform treatment that he couldn't also get without a relationship?

Don Peppers

If, on the other hand, you have the capability to incorporate a customer's own input into how you treat that customer in today's transaction, then you can also remember that input for the future. And the more input the customer gives you, the more intricate a relationship you can develop.

The essence of any relationship is that it is an interactive, adaptive, ongoing process. The more the customer tells you, the more tailored your behavior can be toward that customer. Did you like it like that? You want it more this way, next time? How about this, is that better? With every interaction you get more input from this customer, and you tailor your behavior a little more, and a little more, and a little more. With time, the customer will have invested a some effort in teaching you how he wants to be treated. Now, even if your competitor is doing business the same way you are, your customer will want to remain loyal to you, because he won't want to go to the trouble of re-teaching your competitor what he's already taught you. Because you know more about your customer than your competitor, you can serve your customer in ways that your competitor literally cannot, unless the customer starts the long process of teaching all over again.

When an architectural design firm gives Bentley Systems the information needed to manage its blueprints and diagrams, and to make them available securely to the vendors they've identified, they're not going to be eager to engage another firm to do this. When a multi-division corporation teaches Dell how to configure the hardware and software for its executives' computers, for various levels, departments, functions, and locations, they're not going to want to take the time and effort to teach someone else, unless they really have to. The more I teach you about my needs -- provided that you continue to adapt your service or product to meet my evolving specifications -- the less willing I will be to give up my relationship, at least partly because it will mean starting all over with someone else.

This is the essence of what we call a "Learning Relationship" -- a relationship with a customer that gets "smarter and smarter" with every interaction. Martha RogersDon PeppersExcerpted from One to One, B2B, Customer Development Strategies for the Business-to-Business World, by Don Peppers and Martha Rogers, PhD. Copyright 2001 by Peppers and Rogers Group. [www.1to1.com] Reprinted with permission of the publisher Doubleday, a division of Random House Inc.


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