Structured Customer Relationship Management

 

I must give credit where it is due: this management generation’s push towards enhancing and managing the organization’s relationship with its customer base was spurred forward – if not out-and-out originated – with the work of Professor Tom Peters, author of many works, In Search of Excellence being perhaps the most widely recognized. Now, if Professor Peters knows about me at all, he probably loathes me, since I’ve penned a couple of pieces that had some fun at his expense. My problem with his writings, though, remains: although he rightly chides management to exert more energy and expertise towards satisfying customer needs, I've never read where he provides a structure that would enable a sense of proportion or perspective on this increased emphasis.  When I summarized Peters’ work as, essentially, “give all of your assets over to anyone who even faintly resembles a customer,” I was, of course, engaging in hyperbole, but not that much, really. I have not seen any attempt from Professor Peters to offer guidance on what should be the upper boundary on such efforts.

What’s needed is a basic structure, a guide that will help the prescient manager approach the issues associated with managing the customer relationship. Allow me to propose this one:

In a perfect marketplace, our customers would pay us for the work we do, and not pay for work we did not do, plain and simple. Ah, but there’s the rub – so much of what happens in the marketplace is far from being that plain or simple. So, what is going on when we venture outside the green boxes? Much, and those things have major implications for the future of your project team or organization.

Let’s tackle the (4) cell first – your organization is receiving revenue for work it did not perform. I freely admit, this is an attractive quadrant – otherwise, how do those lottery jackpots get so big? What were those ancient alchemists trying to do, really? From whence came the capital that built Las Vegas, Atlantic City, and Monte Carlo? Getting something for nothing has such a powerful appeal that entire governments are elected and emplaced based on this notion, so it’s certainly not so far-fetched to assume that at least some taint of it has seeped into many business models. Think about the asset managers’ main axiom, that the point of all management is to “maximize shareholder wealth.” Blind adherence to this so-called rule would pull the macro organization towards which of these quadrants? Of course, it’s never articulated as such – just the opposite. How many organizations’ mission statements include some boilerplate stuff about making sure the customer receives every bit of value that they have coming?

Indeed, the entire warranty, guarantee, return policy, and quality industries are based on the fact that the organization that is even widely perceived to be in the (4) quadrant will be out of business, and soon. So, while the magnetic pull of the (4) quadrant is powerful, it’s generally acknowledged that it is fatal to be caught there.

What of the (1) quadrant? Taken to its extreme, it is slavery, which is highly repugnant to most everybody. Still, isn’t this quadrant consistent with the essence of what Tom Peters is saying, that it’s better to be at least a little bit in this quadrant than in (4), or even in (3)? Consider what your competition is doing – given a chance, virtually every new entrepreneur (or organizations on fire to acquire new customers) dive head-long into quadrant (1), eager to convince the world that they are much more comfortable there than in the lower quadrants. Once these have attained a loyal customer base, the move towards quadrant (2) will occur, but not too soon. Ironically, they want to convince their potential customers that they can get something, if not for (next to) nothing, then more economically than the competition can provide.

Of course, a more sophisticated structure is detailed in my must-have second book, but this basic one will do for now. And, based on this simple structure, I would like to leave my readers with a simple question:

What role do the risk managers have in any of this?