Dear Chris,

Welcome to the August issue of perspectives 

Thank you to everyone who commented on last month’s article about Strategising, Organising and Leadership – I was pleased that it prompted some thoughts, and that people found it of value. Please keep the comments coming – stimulating ideas and discussion is the aim!

Of course feel free to forward this to colleagues, or suggest that they subscribe directly themselves (the link is at the end of this newsletter).

This month I’m writing about customer relationships, and how little it takes to break them!


David Booth



Customer relationships - a matter of trust?

I’m angry.

No doubt in an hour or two I shall be my usual phlegmatic self again, but for the moment I’m spurred to action by an incident this morning. And I’m angry not so much because of what happened, but because unfortunately it’s yet another example of just how easy it is to weaken a customer relationship, often unknowingly.

What happened was very trivial. I went into my favourite local bakery shop to buy a scone. Cost: 35p - but all I had was a £5 note. At which the usually friendly assistant quietly tutted and pulled a face, and grudgingly gave me my change. So, transaction completed, desired outcomes achieved for both parties (the scone was enjoyable!). But…I will think twice before using that shop again. Why? The scones may still be great, but the relationship is damaged.

Some more examples:

  • Early morning, York station. Wanting a cup of coffee before boarding the 6.00 train. The only place open prepared my drink, but then didn’t have any change, so refused to complete the transaction – the person serving me put the cup of coffee to one side, to go to waste. Had he offered it me anyway, I’d have gone out of my way to pay him (in coins) on my next visit to the station. Instead, I will never use that kiosk again. (And in this instance I don’t blame the server – why on earth had the kiosk no change?)

  • Whilst working with a client in Manchester, many mornings I’d call in at an excellent individual café en route from the train station (quite a coffee theme running through this!). We’d developed a good relationship, until one cold and wet morning I arrived 5 minutes before they opened – and they wouldn’t open the door and let me in to shelter and wait. Not that the person getting the place ready saw it like that – but even though I was a frequent customer (of over 80 visits), procedures took precedence over simple courtesy.

  • A bank. No word about an urgent transaction that Vanessa (my wife) had requested in writing. I phoned to find out whether there were any procedural problems – perhaps we had not sent the right documents, for example – but the bank cited Data Protection policies and refused even to tell me whether the instructing letter had been received.

  • ·A respected coach had to cancel a session near the end of our work together, and promised to e-mail me with a rearranged date. She didn’t.   

All very minor. In some cases the actions were understandable, even logically justifiable, or perhaps ‘following company policy’. Yet…something important was broken, and in every case I’ve chosen not to deal with any of them since.

In every customer interaction, there are three levels:

  • product or service

  • transaction

  • relationship

The product might be fine, and the transaction carried out efficiently, or any issues resolved satisfactorily – but if the personal relationship is jeopardised in any way, if trust is dented, then these can count for nothing.

I might be missing something, but I struggle to understand the strategy of those organisations who seek to attract new customers with prices and deals that are much better than those they offer to their existing customers. What message does that convey about the value these organisations put on the relationships with their current customers? They might have invested significant resources to win their business, only to then risk undermining these relationships.

Financial institutions do not have good reputations for how they treat their customers (but they are not alone!). Three years ago in a joint initiative with another consultancy, Differentiate, we conducted some research into the attitudes of Building Society customers  - although some were interested in just the best deals, for many it was trust that determined whether they stayed. They wanted to see their loyalty rewarded, not taken advantage of.  The quality of the relationship mattered.

Creating and sustaining a culture where customers matter as people can be challenging for any organisation – yet arguably such an attitude is at the heart of a successful business. When mistakes are made – in the product, during a transaction, or even with the relationship – how the organisation responds demonstrates whether or not such values are truly embedded. So, in the personal examples above, to repair the relationship all that was needed was some acknowledgement and a simple apology – it would have made all the difference!


For further exploration….

  • Tony Cram, of Ashridge Business School, has written an excellent and very accessible book, ‘Customers that Count’ (Financial Times Prentice Hall 2001). The subtitle is ‘how to build living relationships with your most valuable customers’ - Tony is passionate about achieving a genuine and deep focus on customers. I worked with Tony at Grand Met several years ago, and he has much to offer (see also www.tonycram.com).

  • The culture of an organisation is critical. People need to be encouraged, empowered and trusted to do the right thing for customers. Nigel F Piercy, in his book ‘Market-led Strategic Change’ (Elsevier Butterworth-Heinemann 2002) quotes an example where managers did not trust staff to give refunds because they’d ‘give the store away’. However, that changed after a test was set up and it was found that managers gave away more refunds or product replacements than the front-line operatives.  

  • For further details of our research with Building Society members, download my paper ‘Making the difference – what really matters to customers’ from the ixq website.

So, what do you think?

Organisations which genuinely care about customer relationships, and show consistently by their actions that this is a core value - are they really the exception?  And why is it seemingly so difficult to achieve this?

All views and examples (good and bad) welcome!