EXPERT RESPONSE
That's a great question and that perfectly captures the dilemma that most businesses have between maximizing short-term sales and maximizing long-term customer value, because both forms of value are important to the company. It's important to generate sales today, but it's also important to preserve the productive capacity of your customer base, not to oversell. It's sort of like farming. If you planted the richest cash crop on every acre of your land every year, pretty soon you'd burn your land out and you'd have to find new land. Well, you can think of your customer like a farmer thinks of his land. Instead of doing that, practice conservation. Reinvest in the land. Rotate the crops. That's what a farmer would do.
For a business person, what you have to do is balance the long-term value of the customer against the short-term sales. What Martha and I suggest is that if you have the analytics to measure customer lifetime value, then one of the things you really need to do is to try to get a handle on what the leading indicators of lifetime value change are. So if customer satisfaction goes up a point, how much is that worth in terms of lifetime value? And that way you can tell what value you actually create from some measured improvement in customer satisfaction. However, in most businesses, that level of analytics is very difficult to achieve, and in any case, it's kind of hard to use that as a tool in the ranks of the call center rep or sales person.
So we have a shortcut. And the shortcut is: always try to earn the trust of the customer. Ask yourself, what would you like if you were the customer? Obviously you're not going to give the product away at a loss, and as a customer you wouldn't reasonably expect a company to do that. Still, what would you consider to be fair if you were the customer? So that's what you do. If a customer is willing to buy something, but you, being a little more expert in the area, know that it's not really right for the customer, even though he's willing to buy it, talk to him about it, and counsel him about what his best interests are, and how his best interests are served. This is a very important point. By doing this, you would be giving up a short-term opportunity to take the customer's money, but you would be earning something of great value in the form of his trust in your advice and judgment. He'll come back! Not only that, he'll recommend friends and colleagues to you as well.
That's exactly the way United Services Automobile Association (USAA) has created the most respected and trusted brand in financial services in the United States. And USAA is the most trusted brand in financial servcies not just by a small margin, but by a BIG margin. USAA members can tell stories about how they were ready to buy more insurance than they needed when the rep said "you know you don't really need that much" or some similar story. USAA operates by the mantra among its employees: "Treat the customer the way you'd like to be treated if you were the customer." That is something that in philosophy is called the principle of reciprocity. In Christianity it's the golden rule. Every major religion has some form of the principle of reciprocity at work. And it is the ultimate in you-orientation instead of me-orientation. It is, also, the most efficient way to earn another person's trust.
Now, if a customer trusts you more and more, he's going to want to buy from you more. If he always thinks that when he deals with you, you're acting in his interests, he's going to want to deal with you more. Forrester did a survey in the financial services area of 6,000 North American households and found that this kind of customer advocacy, being seen by the customer as a company that will act in the customer's own interests, is the number one determinate of customers' willingness to buy again or buy more products from the company. And that just makes very logical sense.
In terms of getting customer service and sales to work together, in most businesses we divide those functional areas. Customer service is kind of after sales, and sales is responsible for sort of getting the customer in the door. There's going to be no substitute for a comprehensive culture change at a company so everybody understands that the primary goal of our business is to do what's in the customer's best interest. Whenever you're solving a problem, wrestling with a dilemma, if there's an immediate selling situation with multiple choice options, ask yourself the question, if I were the customer, what would I consider to be the right thing here? What would I want to happen? And if you do that, nine times out of ten, that's going to give you the best combination of both short-term sales and long-term value creation for the customer.
Hear more in Creating Customer Value, a SearchCRM.com monthly podcast series with Peppers and Rogers.
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