April 8, 2005

Excerpts: Unstructured Relationship

By: 800-CEO-READ @ 3:19 PM – Filed under: Management & Workplace Culture

Most customer relationships are not structured to continue beyond the initial sale. Its often the case that we have nothing else to sell. Needless to say, this approach is costly, because the total sales revenues compared with the cost of courting new customers makes it highly expensive way to do business. Companies do not structure their relationships with customers for the long run. They treat their customers as a destination and not a journey. Every sale is a one-time accomplishment, instead of a long-term commitment.
In our research, we could not find a single well-documented customer plan detailing a two- to three-year relationshiplet alone a ten-year plan with multiple purchases and further commitments. We found many empty slogans, but no documented plans. Companies often leave that part to luck. Trained to acquire customers, they often puzzle over what to do with them beyond the initial sale. It is always amazing how such a crucial part of the business is left to vague, incidental outcomes and not developed as a wellplanned and carefully executed strategy.
Lack of structured relationships means confusion and inaction. Without a structured customer relationship, companies often default to the bad behavior of chasing new customers and establishing too many short-lived relationships. By doing so, we leave our customers exposed to the assault of our competition.
Structuring relationships is about responding to expectations and ensuring longevity, which leads to greater revenues per customer and higher profitability. Unfortunately, despite the common-sense justifications, most organizations are operating on a whim and not a well-structured relationship plan.