• Sales and Selling
• Customer Retention
• Customer Service
• Marketing and Strategy
• Corporate Image Manaement

Following each essay is a Key Point synopsis plus a series of steps for Taking Action to help your organisation continue on the path to market leadership and greater profitability.

Table of Contents

Consultative Selling Traits


In today’s markets, customers are looking to sales people to provide advice, guidance, and information about the organisation’s products and services.

As a result, sales people and sales managers need to take a longer-term perspective of the sales cycle so that the selling process develops customer loyalty and enhances customer relationships.

Sales people today have to be advisors, counselors, problem solvers, and consultants.
Consultative selling combines the sales person’s personality traits and selling skills with their interpersonal and relationship building skills. This attractive package increases the probability that customers will want to buy from this person, and reduces the amount of time that sales people spend with those less likely to buy. As mentioned in Succeeding in Sales, customers also have to believe that the sales person (and the organisation behind them) is honest, trustworthy, knowledgeable, professional and reliable.

In other words, the sales person needs to become a resource for the customer – a resource that can be relied upon, and called upon, whenever the customer needs information, help, guidance, advice, or simply mere confirmation that they are doing the right thing.


The key traits for becoming successful in consultative selling include:

• 1. Belief –
  it is not good enough just to believe that your products or services are the best, or the best suited, for a particular prospect or customer. The consultative sales person has to be willing to personally recommend a solution to the customer’s specific needs, wants, or desires. And they have to stick by their recommendation. From the customer’s perspective, they are dealing with the individual first, and the organisation second. Hence, they are looking for clues that the sales person truly believes in the recommended solution and are willing to put their credibility on the line for it.
  
  
• 2. Listening –
  ‘God gave us two ears and one mouth, and a successful sales person should use these in that proportion.’ In other words, a good consultative selling person will listen to the customer twice as much as they talk. You cannot give good advice if you have not asked the right questions, listened fully to the responses to those questions, and conducted the proper follow-up questioning that gets to the depth of the customer’s particular situation.
  
  
• 3. Responsibility –
  One of the first things I learned in my first job out of college was ‘If it touches you, it’s your responsibility.’ Customers want partners in developing unique solutions for each situation who will take personal ownership in ensuring that their end of the transaction is delivered fully as promised. Order-takers fill out sales forms and submit these into the organisation for someone else to fulfill. Consultative sales people close deals with customers and then monitor (or become involved in) the fulfillment process so that all promises made to the customer are fulfilled 100 per cent of the time, on time.
  
  
• 4. Understanding the buying process –
  A good consultative sales person understands that while they are going through their own selling process, their prospect is going through their own buying process. Hence, it is critical to understand what role or roles the prospect is playing (initiator, influencer, decider, buyer, user), and who the other players in the buying process might be. Each of these roles is likely to have different buying criteria, and thus the consultative selling person must be able to identify all the criteria and all the people involved in the buying decision making process.
  
  
• 5. Understanding the customer’s objective –
  Not just the ‘big’ objective being sought, but also the objective of each and every meeting or phone call. Knowing where the customer is in the buying cycle (information search, short listing, evaluating, deciding, purchasing) allows the consultative sales person to focus on the customer’s specific needs at each point of contact, and also to avoid the mistake of trying to close the sale at the wrong time.
  
  
• 6. Understanding the customer’s prior experiences –
  With your organisation, with competitor products, with yourself. These experiences form the foundation for how the customer views this series of interactions.
  
  
• 7. Helping –
  In consultative selling, we are aiming to help solve the problems of others, or to help them capture opportunities available to them. A good consultative selling person will have a strong desire to help others. He or she will be focused on the customer’s situation, and in developing solutions that are tailored for that person or organisation. The focus will be on the customer, not on one’s own products or services.
  
  
• 8. Creativity –
  Particularly in problem solving and developing unique solutions to each situation. Creativity differentiates the successful sales person from all others.
  
  
• 9. Being a value-adder –
  By delivering information, offering guidance, providing reassurance, being a sounding board, and in all other aspects of the relationship with the customer. There is no ‘beyond the call of duty’ in consultative selling. It is your duty to ensure that both you and the organisation that you represent meet all needs of the customer. Nothing is ‘outside the scope’ of the consultative sales person’s job description. If you bring value to the prospect/customer, particularly value that will help them translate this into additional business or profits for themselves, then you are providing a winning service.
  
  
• 10. Making the customer a winner –
  Ensuring that the customer wins, at least in their mind. Your success comes in winning an order or, hopefully, in developing a customer for life. Understanding the buying process, and the customer’s objectives (points 4 and 5 above), will allow the consultative sales person to also understand how the customer will determine and evaluate victory. Help them achieve this ‘victory’ and the sale will be yours.

As before, these ten traits are not the be all and end all of successful consultative selling – but they are a good place to start.

Good luck, and good selling.

KEY POINT:
Sales people today have to be advisors, counselors, problem solvers, and consultants.

TAKING ACTION:
What can you do on a regular basis to upgrade your selling skills?

Are your sales people ready and willing to put their own reputations on the line when recommending your products and services? Why or why not?

How well do you understand the buying process of your prospects and customers? What steps are needed to make improvements in this area?

Where can the selling process (which is the buying process from the customer’s perspective) add value to the customer? Are you placing enough emphasis and resources in this area?

BACK TO TOP

Tell Me More

When you ask a customer or client a question, there’s a tendency to take the response at face value and assume that the answer is full and complete.

Many times this assumption is simply not true.

Customer responses are a bit like bikinis. What they reveal is most interesting. What they keep covered, however, is vital.

Few customers are going to tell you everything about how they feel and think, or everything about their needs, wants, and desires. It’s up to the inquiring professional sales person to dig deeper into customer responses by probing and follow-up questioning.

Good sales people are like journalists chasing a good story. You do not just want the facts. You want to know the who, what, why, where, when, and how that gives you the story behind the story, or the deeper answers behind the stated responses.

Or, to use a metaphor from my favorite pastime (scuba diving), you cannot understand the whole structure of a coral reef just by snorkeling around the top. To see its beauty and full composition, you have to dive a bit deeper.

The same is true with customer situations. To ensure you fully understand the customer’s situation, and all of the factors affecting that situation, you need to dive a little deeper through your questioning tactics.

Of course, you do not want to be seen as an inquisitor, or a busybody, when having a discussion with a customer. That’s why the direct approach to asking questions does not often work well.

Instead, try the indirect route. Just say simply, ‘Tell me more.’

This signals to the customer not only that I’m listening, but also that I’m interested in what they have to say.

Being interested in what the customer has to say, of course, is an extremely valuable way of building credibility, trust, and confidence. After all, it’s human nature to want to be listened to.

Sales people tend to jump into the conversation, and often rush to present solutions and ideas before the real needs of the customer have surfaced. This common mistake often results in the customer walking away saying that they are not ready to buy yet (when what they really mean is that they haven’t found someone who has listened thoroughly enough to understand their problem or situation).

It takes discipline to hold off presenting solutions and continue probing. But this will lead to better understanding of customer needs, and higher successful closing rates.

Three simple words: tell me more. That’s all it takes to be a good journalist, or a good sales person.

Good luck, and good selling.

KEY POINT:
Being interested in what the customer has to say, by asking good follow up questions, is an extremely valuable way of building credibility, trust, and confidence with a customer or prospect.

TAKING ACTION:
What other phrases can you use to get customers to tell you more about their wants, needs, and desires?

Evaluate the probing skills of your sales staff. Where are there areas for improvement? Who is in the best position to coach them on probing skills?

Are your sales people capable of being the advisors, counselors, problem solvers, and consultants that is required for consultative selling? Why or why not?

BACK TO TOP

Loyal Employees Create Loyal Customers

I frequently work with clients to develop programs that will build, earn, reward, and keep customer loyalty.

Loyal customers stay longer, cost less to service, and provide higher margins. Most importantly, loyal customers will often work with us to define value, and they provide an early indication of future business performance.

And we’ve all seen the various statistics that say it takes five to ten times more to win a new customer than it does to keep a current customer.

Now there’s a new factor that we need to take into consideration, based on research conducted by Frederick F. Reichheld, of Bain & Company and author of the book The Loyalty Effect: The Hidden Force Behind Growth, Profits, and Lasting Value.

This new factor is simply Employee Loyalty.

Writing in the Harvard Business Review, Reichheld says: ‘There is a clear connection between a company’s treatment of its partners, above all its employees, and its attitude toward its customers.’

He adds, ‘Customer and employee loyalty spring from the same root: principled leadership.’

In what one might consider a virtuous cycle, Reichheld theorizes that:

• leaders who are dedicated to treating people right drive themselves to deliver superior value to customers,
• this in turn allows such leaders and companies to attract and retain the best employees,
• because stellar service attracts a happier and more satisfied clientele, such companies achieve higher profits from customer retention. These higher profits can therefore be used to attract and reward high performing employees, and
• providing excellent customer service and value generates pride and a sense of purpose among these employees, thus helping to reduce employee attrition while preventing customer attrition. Employee pride also results in the desire to continue delivering excellent customer service, thus creating the virtuous cycle.

The virtuous cycle results in what Reichheld says are ‘dedicated employees who put customers’ needs ahead of their own short-term interests’, and this helps to ‘reinforce the organisation’s capacity to generate superior results.’

An organisation’s human resource policies, as well as the leader’s principles and attitudes towards staff, have a direct impact on the key marketing issue of customer retention.

When it comes to developing strategies for increasing customer retention, the wise organisation does not forget to consider strategies for increasing employee loyalty as well.

After all, your employees are the faces of your organisation.

And loyal customers don’t deal with a faceless organisation. They deal with the faces of your organisation.

To keep customers loyal, you also need to maintain employee loyalty.

Starting today.

KEY POINT:
Your employee loyalty has a direct bearing on your customer loyalty levels.

TAKING ACTION:
How loyal are your employees? Why are they or aren’t they loyal?

Does your organisation deserve loyalty from your employees? Why or why not?

What steps could be taken to increase employee loyalty?

Do you have a department, branch, or geographic division of your company that has both great customer loyalty and solid employee loyalty? What lessons from there can be applied elsewhere in the organisation?

BACK TO TOP

Customer Retention: Don’t Be Afraid To Ask Lost Customers

I had a phone conversation with the Managing Director of a service company last week whose business has taken a sudden turn for the worse over the past few weeks. To say that he was in panic mode would be putting it mildly!

Only a few weeks ago, I had met with him and his board in Singapore to begin mapping out business and marketing strategies for the next three years. In the interim, his business had all but fallen off the table, and the need now was for immediate short-term survival tactics, without which there would be no need for long-term strategies.

We discussed the re-launch of a customer loyalty program that he had been working on and, in passing, he mentioned that he hardly saw many of his previously most loyal customers any more.

I suggested that he spend the first two days this week calling as many of his formerly loyal customers and ask them three questions:

• 1) have they experienced any problems or disappointments with the quality of the product delivered?
• 2) have they experienced any problems or disappointments with the service delivery?
• 3) what would it take to get them to return with their patronage?

Lastly, he should thank them for their past business and for their frank answers to these three questions.

At first, he said that there was no real need to do this, as he hadn’t heard many quality or service delivery complaints in recent months. How many had he heard in the past month, I asked? ‘About 4 or 5’, he replied.

‘Well, that means you probably had somewhere between 80 and 100 service quality issues in the past month,’ I told him. Which, for a business that probably handles less than 400 customers a month, means over 20 per cent of his customers were experiencing a service-related problem when interacting with his company.

This shocked him.

So I explained that customer research surveys show that only 50 per cent of all customers complain about service problems. Ninety per cent of these complaints are made just to the front-line person serving them, or perhaps to their immediate supervisor. Only 10 per cent of the complaints are given directly to senior management.

Hence, top management typically hears only about 5 per cent of all customer service issues! So in a typical organization, such as this client’s, the true customer service problem situation can be 20 times greater than senior management thinks.

Very few organisations ever call former customers to ask why they have taken their business elsewhere. Most are either too afraid to ask or are too hurt that customers have actually left.

I say don’t be afraid to ask. If you don’t ask, you’ll never know the true reasons for customer attrition.

First, you may find a common cause or problem that can be fixed, or you may uncover a customer need that your product and/or service can meet with some minor modifications.

Second, almost everyone likes to have their ideas solicited. The reason for asking customers what it would take to have them return to your business is to give your customers an open opportunity to express their ideas, opinions, or comments.

Listening to your former customers, and seeking their inputs, is the first step in winning them back.

KEY POINT:
The true customer service problem situation in the typical organization can be 20 times greater than senior management thinks.

TAKING ACTION:
When was the last time senior managers took a day away from their daily routine to concentrate on nothing other than calling former and current customers? What could possibly be more important than doing this at least once a quarter?

What percentage of customer problems is your senior management aware of? Should this be increased? How could it be increased?

Do you have a formal process for soliciting feedback from customers and former customers? How well is this working? How could this be improved? Are the inputs received worthwhile? How could these be made more worthwhile to your organization?

BACK TO TOP

USP Times Two

One of the fundamental concepts taught in all marketing programs is the premise of the USP – Unique Selling Proposition. While this concept has served marketers well in the past, it’s time to expand the meaning, and use, of the USP acronym.

In order to gain a competitive marketing advantage, you now need to have two USPs: a Unique Selling Proposition and a Unique Service Proposition, one that clearly sets you apart from competitors and provides you with a clear point of differentiation.

Examples might be:

• faster
• more efficient
• sweeter
• more stylish
• friendlier
• willingness to customize
• ability to be flexible in your manufacturing and/or delivery processes
• ability to incorporate self-service features into your product/service offering
• ability to incorporate auto-service features into your product/service offering

Your unique service proposition should be built around an area of core competency that your staff can deliver consistently and reliably. It also has to be supported by an on-going investment in infrastructure, processes, policies, and monitoring systems that help ensure the consistent and reliable delivery of your unique service proposition. Additionally, your service-related USP has to be instilled into your employees, both front-line and back-office staff, with an appropriate set of measurement and rewards systems installed and used.

Citibank in the early 1990s built a unique service proposition around the concept of CPT – Competence, Problem-free, Timely service.

Its entire internal infrastructure was designed to deliver CPT to customers on a consistent and reliable basis. Its training programs were designed to increase the knowledge and skill levels of the front-line staff. Its rewards system was crafted to reward employees, teams, and departments that eliminated or prevented problems from happening to customers. Its capital budgets were ranked in terms of which items would improve the timeliness of service and product delivery. Using these steps these steps the bank was able to reduce the time it took to issue ATM cards to new account holders from ten days to less than three days, including mailing time).

In the airline industry, the unique service proposition of SIA is not just its friendly and efficient cabin crew, but also its highly efficient ground handling staff and process. SIA gets its passengers’ luggage off the plane and onto the baggage carousel faster and more efficiently than any other airline.

Qantas, on the other hand, is notoriously awful at getting the luggage up onto the baggage belts quickly. Often, ‘priority tagged’ bags appear on the carousel after the economy class bags. On the other hand, Qantas has one of the most efficient and friendliest reservations teams I’ve ever dealt with. It’s a pleasure to call the Qantas reservations staff on the phone to make a booking, change a flight, or make a special request. They willingly fax across trip itineraries and the overall trip scheduling process usually goes without a hitch.

Both SIA and Qantas have equally friendly, efficient cabin crew, and the food, entertainment choices, and other amenities on board are on par. They fly the same aircraft and their schedules between Australia and Singapore practically run in parallel.

So there may be little difference in the unique selling proposition between SIA and Qantas. But as you can see, each has it’s own unique service proposition.

As you develop your future marketing strategies, develop and instill both a unique selling proposition and a unique service proposition into your marketing mix.

Think of this as the Power of USP times two. One USP will help you gain new customers, while the other USP will help you build a more loyal customer base.

KEY POINT:
Creating a unique service proposition will enable you to craft a competitive market advantage.

TAKING ACTION:
How does your standard service differ from competitors?

How could you enhance your service to create a strategic competitive advantage?

If you are a manufacturer of products, what would it take to enable you to provide more flexible and customized manufacturing solutions to customers?

If you are a marketer or seller of products/services, what would it take for you to offer self-service options to your customers? What would it take for you to incorporate auto-service features into your products and services?

BACK TO TOP

Customers Are Not Stupid!

Creating customer satisfaction is the best way I know of creating customer loyalty.

The wrong way to go about this is by treating your customers like morons.

Unfortunately, that’s what too many marketers appear to be doing these days, particularly by reducing their service levels or product configurations.

The legendary David Ogilvy once said, ‘The customer’s not stupid, she’s your wife!’ He was referring at the time to how women would view and react to advertising.

I tell you today, ‘The 21st century customer is not stupid, the customer is king.’

And if today’s customers feel they are being cheated, they are very likely to walk away. For there are many choices out there that can satisfy customer needs and rectify customer problems.

Cutting back on what you deliver to customers may help the short-term bottom line, but it’s also likely to have longer-term negative consequences on your revenue line. Too many businesses are cutting short-term costs without realising that when they lose a customer, they are losing long-term revenue.

I read recently that one of the world’s most famous candy companies has reduced the size of its most popular chocolate bar from 250 to 240 grams, apparently in the hope that customers wouldn’t notice. Similarly, a bread manufacturer in Australia has reduced the size of its standard loaf from 650 to 600 grams. Neither, of course, has reduced the price for its products.

One of my favorite airlines no longer gives toiletry kits to Business Class passengers, even on long haul flights. And their in-flight menus now often comprise less expensive ‘Asian cuisine’ than the four-course elegant western meals that helped build their international reputation.

Do these ‘management geniuses’ really think that customers are so stupid these changes will not be noticed? Sure, these companies are saving money and reducing costs with smaller sizes or reduced choices. And yes, these moves are undoubtedly having short-term positive impacts on their bottom lines.

But, customers are not stupid. They notice these changes. And while they may not vocally complain about these cutbacks and shortfalls, they do make mental notes about them (notes that will be recalled the next time a buying decision needs to be made). And, most importantly, customers talk about these changes to other customers.

What happens when customers move their business, purchases, and loyalty to a competitor? Revenues will decline and the respective companies will be forced to find more ways to cut costs. Only this time, the cuts are going to be more drastic, as the future revenue shortfalls are a result of a reduced customer base.

Managing to the bottom line is important. But so too is increasing customer loyalty by delivering customer satisfaction.
Without increased customer satisfaction, there will be no bottom line to manage in the future.

KEY POINT:
The best way to create customer loyalty is through the creation and delivery of customer satisfaction.

TAKING ACTION:
What alternatives are available to you besides reducing your service levels or product configurations?

How are customers likely to react to any changes (even if small) to your service or product delivery?

How are your competitors likely to react to any changes (even if small) to your service or product delivery?

BACK TO TOP

Nobody Noticed

On a beautiful Sunday afternoon in October, I flew from Melbourne to Singapore. Just another day, another international journey.

Except that it wasn’t just another day. It was my birthday. And nobody noticed!

As a result, the airline and the hotel that I encountered that day missed a huge opportunity to provide this customer with an extraordinary experience.

Instead, I received their ‘ordinary customer experience.’ And yet there was really no excuse for this.

While checking in for my flight, the customer service person at the counter used my passport details to create the ‘Express Lane’ immigration card that they give out to all Business and First Class customers. That card has my birth date details.

This airline is one of my two favorites, and I have already attained Platinum Level status in their frequent flyer program, because of my loyalty and the number of long-haul trips I’ve made between Australia and Asia. Their main competitor on Australia to Asia fights sent me a birthday card that arrived two days before this journey.

Upon arrival in Singapore I proceeded to the well-established, five-star Asian hotel chain where the three-day workshop I was conducting was being held. This time the lady at the check-in counter took my passport and completed the various boxes on the hotel’s registration card. I noticed that she properly recorded both my passport details and my date of birth. Again, there was no recognition of the significance of the date.

On reflection, I saw that the airline and hotel staff were well trained in filling in forms quickly and efficiently. But they take no notice of the information being recorded. I am just another customer to be moved as quickly and efficiently as possible from the check-in desk to the hotel room.

Now I do not expect birthday cakes and birthday songs from either of these organizations.

I do think, however, that they would have systems in place so that a personal greeting could be proffered. On the airline, the chief cabin officer always walks around, introduces himself/herself, and personally welcomes aboard their Frequent Flyer Program customers. I would have been extremely pleased had he quietly added, ‘Oh, Mr. Howard, I see that it is your birthday today. Happy Birthday from all of us at XYZ Airlines.’ Instead, he only checked to see if I needed an immigration form for arrival into Singapore.

At the hotel, why not have a system in place for the general manager to send a short birthday note to the rooms of the guests who are traveling away from home on their special day? I am not suggesting that they need to send flowers or a bottle of wine, but just a personal note (or even better a phone call) would go a long way in telling the guest that they are not just another customer in residence on a typical day.

There was nothing to fault in the normal service delivered by either the airline or the hotel. Both were efficient, friendly, and up to standard.

On any other day, the service delivery would have been proper and sufficient.

But this wasn’t any other day. It was my birthday.

And hence the opportunity for an extraordinary customer experience was missed. By both.

KEY POINT:
A customer’s birthday is a great opportunity to provide an extra-ordinary level of personal attention and/or service.

TAKING ACTION:
Are you capturing data about customers that could be put to better use?

Are your people good at completing forms, yet take no notice of the information being collected?

Are you collecting unnecessary or useless information?

What important events in your customers’ lives are you overlooking?

BACK TO TOP

It’s Your Customers, Stupid

Many political pundits cite the phrase, ‘It’s the economy, stupid’ for the demise of the first Bush administration and the subsequent loss of the White House by #41 to the team of Bill Clinton and Al Gore.

In a similar fashion, the death knell for many CEOs will come when their boards finally stand up and collectively shout, ‘It’s your customers, stupid!’

Managers have focused for most of the past decade on increasing shareholder value through mergers, acquisitions, cost and staff reductions, and a whole host of financial gimmickry. Senior management has focused more on the share price than on customer share. In a typical MBA program, there are more courses on financial management than on marketing. Even the so-called CRM (customer relationship management) movement has been preoccupied with selling more to customers than in determining how to truly develop and deepen relationships with customers.

A headline in The Australian in mid 2001 neatly sums up the situation: ‘The pursuit of profits over customers has left Coles Myer in trouble.’ The article highlights how this major supermarket and department store chain in Australia has lost its customer focus, lost its loyal customer base, and has now lost its profitability.

This famed Australian institution (the other headline of the story reads ‘The retailer’s grand old dame falls from grace’) has apparently lost its way. According to the article, ‘It was just about a year ago that senior managers could be heard boasting how they had successfully cut costs to the bone by reducing staff and service levels.’

Like most customers, I wouldn’t want to shop where staff and service levels have been cut to the bone. Apparently, many Australians feel as I do, hence the problems for Coles Myer as cited in the article.

As an investor, I wouldn’t invest in a company that is reducing service levels to its customers. I would suggest that nor should you.

A report by PriceWaterhouseCoopers clearly stated, ‘A single-minded focus that seeks only to satisfy shareholders may ultimately lead to crises and erosion of shareholder value. It seems to me that the Board and senior management of Coles Myer, and many other Boards and senior management teams as well, would greatly benefit shareholders if they understood this concept better.

In another example of why a focus on the customer is so important, the cover story in The Economist (July 14-20, 2001) was titled Keeping The Customer Satisfied and looked at trends in mass customization. The editorial read:

‘In the end, durable customer relations are only partly about clever technology, however imaginatively used. Mainly, they require relentless attention to detail: good products, prompt service, well-trained staff with the power to do a little extra when they judge it right to do so. No wonder firms that send you away with a smile on your face are so rare.’

As my personal marketing philosophy attests, ‘If it touches the customer, it’s a marketing issue™.’ The true purpose of business is to create and keep customers. That’s the best way to create shareholder value. Especially long-term shareholder value.

KEY POINT: Creating customer loyalty requires attention to detail, good products, prompt service, and well-trained, empowered staff.

TAKING ACTION: What is the focus of your management meetings – financial reviews or customer needs/market reviews?

Does your organisation treat customer requests as a ‘pain in the neck’ or as an opportunity to deepen your understanding of how to satisfy customer problems?

Are you reducing or increasing service levels to customers? How can you further increase the level of service being delivered today?

BACK TO TOP

The Cancellation Department

While in Singapore last week, I called American Express to cancel my wife’s supplemental card.

No, I wasn’t angry at her – it’s just that she uses the card only three or four times a year, which is really not enough to justify the $110 annual fee. (And no, I don’t want to encourage her to use it more often just to justify the annual fee!)

After spending ages entering information into Amex’s arduous and tedious automated voice response system (press ‘1’ for this, enter card number for that, etc.), I finally got through to a real, live customer service officer.

She was quite perky and friendly, and when I told her I wanted to cancel my wife’s supplemental card because of the annual fee, she happily said, ‘Oh, in that case let me put you through to our Cancellation Department.’

The Cancellation Department!

My first thought was that there must be so many people canceling their American Express cards in Singapore that the company has had to establish an entire department just to fulfill these requests.

The lady in the Cancellation Department was also perky and friendly. When I again explained my reason for canceling the card was due to the annual fee, she promptly offered to waive the fee for the coming year and credit my account for the charge that had been posted on the current statement.

Naturally I accepted this offer. After all, not only did I save on the fee, but also I wouldn’t have to explain to my wife why I had cancelled her card!

Talk about a win–win situation!

So while this incident had a very happy ending for both this customer and Amex (which, after all, didn’t lose a customer), it got me thinking about the use of the name Cancellation Department.

Amex could use a wide range of alternatives for this department, all of which would create a better impression for customers, such as: Customer Retention Department, Customers First Department, Customer Satisfaction Department, Customer Recovery Department, or simply Customer Assistance Department. Any of these would have had positive connotations to customers hearing the name.

Heck, Amex could even have fun with the names, if fun is a part of their corporate culture. Why not call it the Please Don’t Leave Department, or How Can We Make You Stay Department? Or the We Really, Really, Really Want You To Stay Department?

I’d suggest that they call it anything except the Cancellation Department.

On top of the negative connotations given to customers, I also wonder what having a Cancellation Department does for staff attitudes inside Amex? Imagine the rumors that float down the corridors and within e-mail messages when the Cancellation Department increases its staff levels. Would that be the time for the smarter staff to start circulating their CVs in the market? Would this be a leading indicator that staff reductions or budget cuts might be coming in other areas of the business?

As I’ve said many times, ‘If it touches the customer, it’s a marketing issue.?‘ Here, we see where even the simple act of naming an internal department can, and will, have an impact on how your customers perceive your organisation.

Someone in marketing at Amex Singapore needs to urgently convince the bosses there to drop the Cancellation Department nomenclature.

KEY POINT:
Even the simple act of naming an internal department can, and will, have an impact on how customers perceive your organization.

TAKING ACTION:
Do you have any internal department or work group names that might create negative perceptions for your organisation in the minds of your customers, suppliers, partners, or staff?

How could your internal department or work group names be changed to make them more friendly to customers, suppliers, partners, or staff? For instance, could Operations become Customer Support Operations? Could the Research & Development Department become the Innovation Department?

BACK TO TOP

Doing Business the Right Way

Arthur Andersen is no more.

Once a well-respected, professional firm, it has now gone to that great corporate domain in the sky, otherwise known as the Hall of Shame and Failures, joining the likes of Enron, HIH Insurance, One.Tel, and many others.

Sure, business collapses happen all the time. But in the past, such failures were brought on by market rejection of the business model or the product, not by unsavory financial shenanigans.

And it’s not just in the area of financial manipulation that business ethics has gone astray in recent years.

How many people justify guerilla marketing tactics such as releasing highly skewed market share data? Or the buying of market share and then claiming that market share actually grew, as if such growth had been organic? Or how about the stealing of someone else’s idea? Or announcing a future product when it is little more than a concept on the drawing board? The latter has even resulted in new terminology in the IT industry – vaporware.

Unfortunately, as marketers, we are often no less underhand in our shenanigans and tricks than our colleagues in the finance department and the executive suites have been.

Are the dirty tricks of politics now firmly embedded in the business world? Is the business community about to sink to the same level of distrust and disrepute as politicians?

What can you do to ensure that your company, department, or work group abides by the highest business ethics?

If you’re the CEO, Managing Director, or other senior leader, you need to create and manage the right corporate culture (see Corporate Ethics and Corporate Culture).

If you are a department head or work group leader, you need to ‘walk the talk’ – in your personal life as well as your corporate life.

Why?

If you brag about all the copyrighted music you downloaded free from Napster, what message does this send to your subordinates and colleagues?

If you take your spouse or significant other out to dinner and put it on your corporate expenses, what message does this convey?

If you lift materials out of some one else’s presentation, or download data from the Internet without crediting the source, what other actions does this suggest as allowable?

Ethics is not a gray issue.

If you have a single seed of doubt that what you are doing, or planning to do, is wrong, it probably is!

As Dr. Martin Luther King wrote:

‘Cowardice asks the question – is it safe?
Expediency asks the question – is it politic?
Vanity asks the question – is it popular?
But conscience asks the question – is it right?
And there comes a time when one must take a position that is neither safe,
nor politic, nor popular; but one must take it because it is right.’

What does this have to do with marketing?

Everything.

Because: ‘If it touches the customer, it’s a marketing issue. ™’

Your business ethics will eventually be directly reflected in the way you interact and do business with customers, suppliers, channel partners, and others.

Conducting business the right way is the only way. This principle should be the nucleus of your marketing strategy and corporate culture.

As Nelson Mandela said, ‘The time is always right to do right.’

If you don’t, then your organisation could well be on its way to a future induction into the Hall of Shame and Failures.

KEY POINT:
Your business ethics will eventually be directly reflected in the way you interact and do business with customers, suppliers, channel partners, and others.

TAKING ACTION:
Are your staff encouraged to ask ‘Is it right?’ when evaluating options or when making decisions?

What is your corporate policy on ethics? How well is it followed? How well is it communicated? Where can improvements be made?

Do your executives misuse their corporate expense accounts? Does your staff regularly photocopy documents without worrying about the copyright issues? Is all of your software properly licensed?

BACK TO TOP

Reflections on the Corporate Image

A 12-hour journey from Australia to Tokyo provided sufficient time for some reflection, part of which was provoked by the in-flight movie Changing Lanes with Ben Affleck and Samuel L. Jackson (in which the two protagonists face a series of moral dilemmas following a car accident between the two).

Like the two characters in the movie, it appears that many business leaders have been facing a series of moral dilemmas of their own in recent years. And many, such as those who previously led Enron, WorldCom, HIH Insurance, One.Tel, Imclone, and others appear to have failed these tests.

If we have another major corporate ethics scandal or two in the coming months, what will be the impact – not so much on Wall Street and other global share markets (though this is certainly a worry for personal investors), but rather on corporate brands and how consumers and customers will start to relate to corporate brands. Could we be facing a meltdown in how people perceive corporate brands and will this potent marketing weapon be reduced to the historical ammunition depot like the catapults and swords from pre-modern military weaponry?

To head off a crisis in corporate brand devaluation, it is time for leaders of organizations, both big and small, to focus on making their corporate brands better, not just bigger. It is time to fight the Wall Street mentality and its focus on growth, growth, growth, and size, size, size.

There is a need today for a triple bottom line approach: where the organisation is measured on environmental impact and its contributions to society, as well as on its profitability.

We are entering an era where the organization’s contributions to society will not be measuring solely by how much it donates to the local museum or to social charities. In the past, any organization could project a solid corporate citizen image simply by writing large checks to favorite charities and getting free press for doing so. Such corporate financial philanthropy, however, will be only one part of the equation as we evolve into the next chapter of corporate image management. As we now know, the folks at Enron, WorldCom, HIH, and many other now-bankrupt organisations were readily willing to buy their ‘good citizen’ images using checkbook policies. The general populace, and the investment community, is not likely to be fooled by such practices in the future.

If the phrase ‘corporate brand equity’ is going to have any significant meaning in the future, then organisational leaders need to pause today and make a firm commitment to all of the organisation’s important constituents: employees, customers, suppliers, the local community in which it operates, society at large, as well as to shareholders. It is time to end the current focus on placing returns to shareholders as the number one priority for organisational existence.

And please remove ‘returns to shareholders’ from all corporate mission statements. If you’re delivering true triple bottom-line returns, and if you have the right corporate values in place, the returns to shareholders will automatically fall into place. As part of this new chapter on corporate image management, your shareholders are going to want returns in all three areas – environmental impact, contributions to society, and profitability.

PriceWaterhouseCoopers produced a report called Reputation Assurance: The Value of a Good Name stating: ‘A single-minded focus that seeks only to satisfy shareholders may ultimately lead to crises and erosion of shareholder value.’ In many ways, these authors predicted recent events leading to today’s current stock market valuations.

One writer advised corporate leaders that ‘if your organization is doing something that you cannot tell or explain to your grandmother, then perhaps you shouldn’t be doing it.’ Trite? Well, it gets to the heart of the moral dilemma issues facing many organisational leaders.

Bigger is certainly not always better. Better may not always mean best, but it does mean better than before. And better is likely to result in bigger anyway, though like many worthwhile pursuits it may take longer to do it the right way rather than the short-cut way.

Now, more than ever before, is the time for leaders to focus on building and managing the corporate image – by ensuring that their organisations become better instead of just bigger.

KEY POINT:
It is time for leaders of organisations, both big and small, to focus on making their corporate brands better, not just bigger.

TAKING ACTION:
How is your organisation perceived by its different key constituencies? Is there a difference in their respective perceptions? Why?

What is your organisation’s approach to social contributions? How do you contribute to society beyond your daily business activities and corporate philanthropy via the checkbook?

Which aspects of your corporate image – as perceived by your constituents – would you like to see improved?

BACK TO TOP