Many believe customer loyalty is dead. Many also feel sustainable profits and growth is extremely difficult. Most businesses are chasing short-term profits in an ever-tightening spiral of cutthroat competition. Companies buy their customer’s business through pricing, incentives, or convenience, promising more for less, faster and with less involvement. This further motivates customers shop on price and shop around. In a world of abundance, overwhelming choice, and access to vast amounts of information the customer goes with the best deal available. Are we doomed, as some have suggested, to a world where businesses battle for an elusive customer and customers shop only on price and convenience?
  
   We don’t think so. As businesses squeeze every ounce of efficiency out of their operations customers get more for their buck. The WalMarts of the world service this market and many shop there. Yet customers aren’t thrilled with this situation. The costs of low prices for the customer are substantial-long lines at checkout, employees with minimal knowledge of the product, difficulty finding help when in the store, restricted choice of products, no option to customize your purchase, and no store service of products. By all accounts this is a negative experience for the customer. They will go there but they don’t like it.
  
   Customers want a positive, meaningful experience as much as or more than they want a product. And they are willing to pay for it! They will scrimp in less meaningful areas (shop at WalMart) so they can splurge on this positive experience. They will pay and pay well for a meaningful experience. What’s more, they become loyal evangelists of that company. Where do you want to be? In cutthroat competition with WalMart or servicing a loyal and expanding customer base.
  
   A growing number of highly successful companies have figured this out and are leading the transformation to business models based on customer experience. Starbucks, Patagonia, The Container Store are but a few examples. Starbucks, where I am writing this and drinking my Café Americano, built a global business selling a positive experience. Customers line up out the door to spend upwards of four dollars for a coffee drink. And they do so happily. Compare the atmosphere of a line in Starbucks with a line in WalMart. Anticipation (Starbucks) verses resignation (WalMart). And yes, Starbucks are found in lower income neighborhoods, evidence that people scrimp to splurge.

   Is it possible to build authentic, trusting relationships that both simplify and enrich life in an increasingly complex and cold world? You bet! However, companies must transform they way they handle their most critical asset - their employees. The customer experience occurs when the customer interfaces with the company. How meaningful and positive this experience will be depends on interactions with employees. The customer experience goes through the employee. This is why, for example, the Container Store invests in ten times as much employee training as typical companies. And, it is why Samsung forgoes the efficiency of a menu driven call center to have the customer service phone answered by a person.

   Just as customers are looking for meaningful experiences, employees want their work to be meaningful and engaging. Thus, the truly customer-centric company must seek to build a Win-Win-Win Business Relationship. They must build an environment where the end-games of each of the constituents-company, customer, and employee-are met.
  
   What does this mean? When customers derive emotionally and psychologically gratifying consumer experiences they become emotionally loyal to the company and strong advocates-true lifelong customers. When employees derive value from being emotionally and mentally involved in their work they build psychological equity in their jobs. They become engaged. They are interested, excited and passionate about their jobs and this created the positive experience customers are seeking. When companies deliver a desirable customer experience, giving customers what they really value, they get committed customers willing to get involved with the company on broader issues and willing to pay for the experience.
  
   We believe we have an effective strategy for companies wanting to shift to the new paradigm. Our expertise is in the psychology of the customer experience and the engaged employee and we have put these principles into action. We help companies find sustainable profits by redirecting their relationship with customers and employees. Our business, The Whetstone Edge (www.TheWhetstoneEdge.com), helps companies learn these new insights, strategies, and methodologies and apply them in their own companies.
  
   If this sounds interesting to you stay tuned to our blogs (www.OnCustomers.com and www.EngagedEmployee.com)
and be sure to visit our website, www.TheWhestoneEdge.com.

Posted by John Todor on Wednesday, July 12th, 2006 at 2:18 pm.