The Guiding Assumption
Posted on: August 01, 2012 by: Lior ArussyComments
During a recent conversation with a client, I asked, "Why are your policies so restrictive? It seems as though you don't trust your customers."
"Well, that depends," the client replied.
When I asked him to elaborate, he said, "Let me give you some examples. In 1978, we had a customer who abused our generosity, so we needed to plug that hole. In 1997, we had another customer who took advantage of our return policy, so we made sure that will not happen again."
Put simply, my client's processes and procedures were a reflection of a few abusive customers he encountered as far back as 35 years ago. His organization's approach was that all customers are, in fact, similar to these abusive customers, leading him to the conclusion that all customers are cheaters unless proven otherwise.
This is, unfortunately, not an isolated case. We see a similar attitude at companies worldwide.
Relationships with customers are defined not by advertising campaigns, which are full of emotional images and unrealistic promises, but by the processes and procedures you establish to administer the relationships. These processes will guide your staff in their interactions with your customers. These processes and procedures will determine if you demonstrate trust in your customers. Are you willing to be generous?
If your processes and procedures are determined by the worst customers you have ever encountered, you will design them in a way that will penalize everyone. You are applying collective punishment to all your customers, blaming all for the bad deeds of a few. The guiding assumption to this approach is that all customers will become abusers and cheaters, if only given the opportunity.
Not surprisingly, operating under this assumption will have a detrimental effect on your business. It will not allow you to have long-term relationships with customers. You need to examine the guiding assumption that leads to your processes and procedures to ensure that you are not basing the way you relate to your current customers on negative past experiences. If you can't assume trust in your customers, you have no place serving them.
Do you have customers who abuse your relationship? I am sure you do. Everyone does. The key is to treat them as outliers, not as representatives of your customer base.
There are two ways to view outliers. One option is to look at them as representing a missing component in your value proposition. They are seeking something they need that you are not delivering. In this case, they have just handed you the best idea for innovation. This is an opportunity to fulfill the unmet need and profit from it.
Option two is to take the view that these outliers are simply looking for a free ride. In this case, abusive customers should be sent to the competition. Do not tolerate them and do not allow them to abuse your business. After all, they are stealing from your profitable customers. They are not paying their dues but rather leveraging the profit margins paid by all your good customers. Your good customers should not be penalized for the actions of such outliers, whether the penalty is financial or reputational. Please do not brand all your customers cheaters just because a few are.
This is not a plea for higher morality. Your guiding assumption—what you really think about your customers—can be the biggest obstacle (or catalyst) to your success. In an era when customers are scrutinizing every move you make, you can not afford to assume that they are all not trustworthy.
Trust your customers. And if you don't, find new customers you can. Running a business and establishing a relationship on the conviction that everyone around you is out to get you is not a recipe for business (or personal) success.