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The first key to creating successful long-term customer relationships is to understand your customer’s business before you sell to them. We really have to understand what the client’s overall customer strategy is, where the risks to their customer base are, and what the best possible outcome or the worst possible outcome for their current customers is depending on the business decisions and customer strategy, and the best possible outcome and worst possible outcome for new customers. Once we understand all of those existing pain points and opportunity points, then we can go back in and suggest the set of solutions and technologies and processes that we can apply to take advantage of those opportunities or fix those pain points. Sometimes, it may not be a technology at all; it may be a process issue that has to be fixed inside the company.

We don’t start by trying to sell our customers a piece of technology. We have a documented process within our sales organization that says, “Let’s understand all of your customer interaction points. Let’s understand your processes. Let’s understand your pain points. Let’s understand your opportunities.” Once we have understood that, we then go back in and say, “Here is how various pieces of technology can create impact.” It’s an ROI impact in some cases. In others, it’s a business benefit impact. It’s a customer satisfaction improvement impact in some cases. Or it might be any combination of those. By understanding how you interact with your customers and the various organizations and people who interact with your customers, you can see how to tie that knowledge together about how you have interacted with your customers, and how you can make that knowledge available in the right format for all the other people who have to interact with that customer. Most people don’t step back and actually do that or understand that you have your collections people and salespeople calling on the same customer at the same time, and you are sending mixed messages. Most companies don’t think about the fact that it isn’t just the salespeople calling on a particular customer; the finance group and other parts of the business are also calling. How do we tie all of those together so it is one company and one customer rather than appearing to be multiple companies with the same customer? That is where many companies fall short. They don’t understand their customer strategy before they start throwing technology at a customer problem.

The second key is to understand profitability by customer. Profitability by customer isn’t just how much they have bought from you recently; it is what products did they buy, how long is your support agreement, how frequently have they interacted with you on an opportunity or a problem, and have they brought value-add to your business above and beyond? So, for example, in the case of Cox Communications, the idea for the callback product actually came from Cox Communications. That added net value to our relationship. You really have to assess the overall value of a relationship from an economic perspective as well as from a strategic perspective. In the long term there has to be economic value; otherwise, there is no strategic value. You have to be willing to walk away from a situation that looks attractive on paper but the customer isn’t willing to think of it as a long-term relationship. A customer relationship doesn’t mean that you compromise your own profitability to provide every single customer platinum-level care at silver-level cost. It doesn’t mean that you do whatever each individual wants all the time.

Customer focus is a philosophy that drives your product development, support service operations, marketing, and corporate culture. It is not a reengineering of all your processes, and it is not an introduction of all new technology all at once. In simple terms, it is really that you are clear, fair, and easy to do business with. You set expectations clearly, and you meet them. You constantly get input, and you sort out the useful and valuable input to quickly address the processes that frustrate customers. If you are committed to being a customer-focused business, then the strategies and the business decisions for R&D, marketing, operations, sales, and so forth will align with that key objective of being a customerfocused business. As a CEO, this gives me a very easy guideline for making the big decisions and the hard decisions that only the CEO is in the position to make. Finally, keep in mind that customer-focus does not mean increasing costs. There is a great deal you can do to be customerfocused. It doesn’t have to cost any more in terms of labor, processes, or technology than not being customer-focused. The key point is that in the mid- to long-term, not being customer-focused enough will cost you dearly – far more than any incremental expense. It’s really about an overall attitude that drives the strategy and decisions.

Let me illustrate the point with an example. Being customer-focused helped one of our valued long-term customers reduce costs and make their customers much happier at the same time. Shop at Home is one of the top home-shopping networks in the country and one of the most customer-focused businesses you can find. Customer focus drives every decision from what products they are going to offer, to when they are going to air them, to what technology they are going to use to service their customers. For example, they conduct real-time monitoring of customer response to offerings and make immediate decisions to extend the airtime of a certain popular offering or pull it off the air faster because customers aren’t responding. By focusing on and knowing their customers, they have experienced approximately 40 percent revenue growth in 5 out of the past 6 years. They accomplished that because customer-focus drives their strategy. Here’s what they did:

They learned that their existing customers were somewhat frustrated about waiting even a short time for a live representative and they did not want to be treated like a new customer each time they called to place an order. They preferred an automated system that would allow them to call, enter an order and quickly get off the phone or the Internet. Our society is at the stage that when automated service is easy to-use and accessible whenever we want it, we often prefer it to live service. Customers expect 24/7 service and don’t mind good fast, self-service. Shop at Home very quickly deployed Aspect’s self-service technology and within a week was not only saving on toll charges and overtime staff compensation but was experiencing more satisfied customers – new customers were delighted to have virtually no hold time and existing customers were delighted to have no hold-time and 24-hour access to a self-service system if they chose it over the live service. Employees could really focus on the customers that chose live service.

Exactly how did customer focus pay off? Let’s look at their results.

• Increased Sales: Shop At Home recognized an immediate $30,000 increase in sales the first afternoon the Aspect system was turned on. Within 2 days, a $50,000 increase per day was recorded.

• Reduced Costs: The Aspect application handles a transaction in 1.57 minutes rather than the 4.04 minutes it takes to have an agent handle a transaction. With an average transaction of $200, each additional transaction handled adds greatly to the bottom line.

• Reduced Abandon Rate: By combining our solution with some other applications, Shop At Home has reduced its customer call abandonment rate down to just about 3 percent or so. That is stunning! That means that most of the callers who used to change their minds, decided to call later or for whatever reason abandoned the call, no longer did so because with the new system they got immediate, focused attention and didn’t have enough reason to do so anymore. Understand that such a low abandonment rate is a highly sought after metric by many businesses but to achieve it, you have to focus the way Shop at Home did.

Now, many companies could be doing the same thing that Shop at Home was brilliant enough to do. The difference is that many companies do NOT have customer-focus as THE driving force behind decisions and strategy.

Do not underestimate loyalty, and do not think that spending a fortune is what it takes to create loyal customers – just think of Shop at Home – their small investment in our technology paid for itself within a week and their customers are happier for it. In closing, let me again emphasize that customer-focus as the driving force behind your business strategy will help you win every time