However, there is another side to the customer-centric approach. One customer that my company dealt with was pretty small, but very vocal with its demands. After numerous discussions we agreed to do some development work for the owner free of charge. Although the code was applicable to a number of customers the development was triggered by his loud posturing.
We spent a long time forming a close relationship with him, fundamentally at our cost. However despite this, recently the customer discovered a new supplier that he liked, and did his best to influence other users to defect. It seemed that the more we gave, the more he demanded and the less loyal he became.
The conclusion that I've come to is that the key to this whole area is setting expectations. The only expectation that we should set with customers must be the quality of service that we will consistently deliver to everyone. This must be a level that is profitable for us, and that we are able to maintain. We probably want to go further with some customers, but these should be the ones with most potential, not the most demanding. When people threaten to go elsewhere, they should be gently encouraged to do so. Business either has to be done on a basis that works for both parties, or not at all. Your competitors will find it just as hard to make money from these customers.
None of this should distract us from the very necessary need to deliver good service and listen to customers in order to understand and improve. It's just about managing the relationship in a way that works for both parties. In the case of the car dealer, it exceeded my expectations and I became ultra loyal. If my original view was that it should work for nothing, I would have been a nightmare and the company would have gained nothing from its exceptional service. So expectations make a vital difference to profitability. It's a subject that should be studied more.
By Chris Barling, CEO, Sellerdeck. Originally published on BusinessZone.co.uk