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What Customer Relationship?
By Scott Hornstein
Saturday, 10th February 2007
 
The rubric of "customer relationship management" offers two promises: The first is to enable marketers to find those who are ready to buy right now and close the sale quickly; the second is to create a repurchase preference. The bottom line: It's more profitable to have happy customers who stay longer and buy more.

The majority of marketing strategy and investment is solidly behind promise No. 1. Should we pick the low hanging fruit? Absolutely. If we don't, someone else will. It also seems that most companies have yet to warm up to promise No. 2. Do companies bombard their customers with ongoing repurchase solicitations? Absolutely. Are these finely targeted? Not usually. Look in your mailbox—are companies targeting you or trolling?

Instead of a commitment to the individual, companies turn the numbers. Why should we pay attention to one customer when we can broadcast to millions? Why else would we be satisfied when less than 1 percent of our universe buys, and 99 percent throws us in the trash? Send it to everyone—just one more sale will pay for everything. Such shortsightedness generates customer displeasure, which is a precursor to disgust—counterproductive to the creation of repurchase preference.

When a customer purchases your product or service, they go away for a while. They use your stuff and it satisfies them or it doesn't. Perhaps they have a question or a problem. I call this period "change." Many companies call it "annoying." In fact, some even banish existing customers to the other side of the world.

That's where these companies are missing the boat. They've paid to acquire the relationship, but they're not amortizing the investment. Many companies are obsessed with the short-term to the detriment of the long-term. What we sold today is the only thing that counts, so we manufacture drive-by relationships.

Here's an example: I have been a Mac customer since my first computer. I am networked from my home office to the kids' computers, to my laptop and my wife's laptop. While far from perfect, Apple's commitment to nurturing long-term customer relationships is visible and meaningful. Should I call with a question, its database has my entire configuration. The direction the company gives me is real-world.

In fact, it even has a local presence where I can talk to a real person, or perhaps learn new computer skills for my personal or business advancement. Do I pay extra for this value? Absolutely. Is it worth it? Definitely. Value figures strongly in my own repurchase decisions.

Customers seem to like the second promise of customer relationship management—that a company would value their business and invest in a "relationship." They are vocal in their displeasure when the promise is hollow. They are loyal—and profitable— when the promise is kept.

Hornstein Associates, founded in 1985, has developed successful customer-focused marketing programs for customers

www.hornsteinassociates.com

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