Today we will look at reasons why companies fail to achieve intimacy in their relationship with customers.
Treating all Customers as Equal
All human beings are created equal, but all customers are not. Achieving intimacy lies in the ability of an entrepreneur to differentiate its customer segment based on the level of service required. An attempt to generalize the requirement of service means ignoring the most valuable and profitable customers. Understanding the value every customer brings to your business, helps you develop an emotional relationship with them. Intimacy is a matter of “knowledge” that accumulates. When you know more about the top 20% of customers that bring in 80% of the value to your business and you treat them well, you get rewarded.
Don’t treat ‘cash cow’ customers the same way you treat the ‘problem child’ customers.
Focusing on one-time transaction instead of life-time value
There is a difference between benefits on a single transaction and benefits over the lifetime of customer-business relationship. As an entrepreneur, your target should be to determine the economic value a customer brings over their “lifetime” with the business. You must recognize that a customer does not represent a single transaction but a relationship that is far more valuable than any one-time exchange.
When you pay too much attention on a one-time transaction, you lose the opportunity to get intimate with customers and the economic value they bring.
Knowing the worth of every customer helps you know what it cost to get and maintain one.
Wrong Understanding of Customers’ Value
If you can’t define value as your customers do, you will never achieve intimacy with them. Every customer has a criteria for determining value, and value is not based on quality and price anymore, but on convenience of purchase, after sales service, lifestyle etc. These values may not be mentioned by customers, but they crave for it and only a close relationship will reveal what they define as value to you.
In every customer segment, there are complex and simple customers; some are more valuable to your business, while others are costly to satisfy. Getting intimate with customers helps you understand the differences in the level of service required by each.